Navigating strata insurance challenges: how Sedgwick empowers owners and managers for building resilience

March 13, 2024

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Strata insurance plays a crucial role in safeguarding the interests of property owners within a shared building or complex. As the complexities of property ownership increase, so do the challenges faced by owners and strata managers in ensuring adequate insurance coverage. In this blog, we delve into some of the biggest concerns that owners and strata managers encounter regarding strata insurance and explore how Sedgwick is actively addressing these concerns to support the strata community.

The rising cost of strata insurance

One of the primary concerns for owners and strata managers is the rising cost of strata insurance. In recent years, the insurance landscape has undergone significant changes, leading to increased premiums and, in some cases, reduced coverage or no coverage. The challenge lies in finding comprehensive insurance solutions that are both cost-effective and provide adequate protection for the diverse needs of a strata community. Sedgwick understands this challenge and works closely with strata managers to identify tailored insurance options that strike the right balance between coverage and affordability.

The complex nature of strata insurance

Another pressing issue is the complexity of strata insurance policies. Owners and strata managers often grapple with the intricacies of these policies, which can be filled with jargon and technical terms. Understanding the scope of coverage, exclusions, and limitations is crucial for making informed decisions. We simplify the process by providing clear and concise information, guiding owners and strata managers through the claims management process and ensuring they understand policy applications and the underlying decisions relating to policy response. This transparency fosters trust and empowers the strata community to make informed choices regarding their insurance needs.

The unfortunate rise in underinsurance

The risk of underinsurance is a persistent concern in the strata community. Owners and strata managers need to understand the value of their property to ensure it is adequately insured for the correct value. Although it isn’t the owners and strata managers who determine the value, they can decide how much to insure their property for based on the recommendation and valuation of a qualified and reputable expert. Underinsurance occurs when the valuation of the property is incorrect and is lower than its actual market value leading to inadequate coverage in the event of a claim. We address this issue by conducting thorough property valuations and risk assessments. By accurately assessing the replacement cost of buildings and common areas, we help ensure that strata communities are adequately insured, mitigating the risk of financial loss in the event of a covered incident.

Navigating policy and regulatory changes

Strata communities are also grappling with the challenge of navigating the evolving regulatory landscape. Changes in legislation and insurance regulations can have a significant impact on strata insurance requirements. Owners and strata managers may find it challenging to stay abreast of these changes and ensure compliance. We remain proactive in monitoring regulatory developments, providing timely updates, and guiding strata communities through any necessary adjustments to their insurance policies. This proactive approach ensures that strata communities remain in compliance with the latest legal requirements.

The looming threat of natural disasters

Natural disasters and climate-related events pose a heightened risk to buildings and structures, making resilience a top priority. Owners and strata managers are increasingly concerned about the potential impact of extreme weather events on the properties they own or manage, which is why we collaborate with strata communities to implement risk mitigation strategies, such as property retrofitting and disaster preparedness plans. By taking a proactive stance on risk management, we help ensure strata communities enhance their resilience to potential hazards.

The claims process can be a source of anxiety for owners and strata managers. In the aftermath of an incident, the timely and efficient processing of insurance claims is crucial for restoring normalcy. We pride ourselves on our streamlined claims management processes, leveraging technology to expedite the assessment and settlement of claims along with minimising the disruption for strata communities, allowing them to recover and rebuild promptly.

In addition to these concerns, the strata community often faces challenges related to building maintenance and repairs. We recognise the importance of preventive measures in reducing the frequency and severity of claims and by partnering with strata communities to implement robust maintenance programs, we help enhance the longevity and durability of buildings, ultimately reducing the risk profile for insurers.

Our support to the strata community

Our commitment to the strata community extends beyond insurance services. We actively engage in educational initiatives, providing resources and training to strata managers and owners. By fostering a culture of awareness and preparedness, we empower the strata community to navigate the complexities of property ownership with confidence.

Strata insurance is a critical component of protecting the interests of owners and strata managers in shared properties. Sedgwick addresses the biggest concerns of the strata community by offering tailored insurance solutions, simplifying policy complexities, preventing underinsurance, staying abreast of regulatory changes, enhancing resilience to natural disasters, streamlining the claims process, and supporting proactive building maintenance. Through its comprehensive approach, we play a pivotal role in helping the strata community navigate their building concerns, fostering a secure and resilient environment for property owners.

Learn more > explore how Sedgwick is helping the strata community navigate their building concerns here.

Edwina Feilen, Manager, Business solutions, Australia

Managing a large and complex property fire claim

March 1, 2024

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This blog is the first installment in a series where our property experts highlight recent claims. In part one, we discuss our response to a devastating fire. Stay tuned for the second blog focused on a flood catastrophe, which is coming soon.

Claim details

On 3 January 2018, a devastating fire erupted at a prominent meat processing and export building . The fire inflicted extensive damage to the property, halting all production. The disruption to the business was anticipated to extend up to two years, invoking the maximum indemnity period (MIP) stipulated under the business interruption (BI) insurance coverage. The incident presented numerous challenges, including the need for heavy mechanical equipment to excavate debris and perform partial demolition, and work stoppages due to scorching temperatures exceeding 40 degrees Celsius.

Responding to the challenges

In response to this dire situation, Sedgwick swiftly mobilised a multidisciplinary team of experts. The team comprised experienced quantity surveyors, design and project management engineers with specialised knowledge of the meat production industry, and in-house forensic accounting specialists. Notably, both Sedgwick’s experts and the insured’s appointed advisors collaborated closely to ensure a unified approach — fostering transparency and expeditious progress.

Sedgwick’s forensic accounting specialists played a pivotal role in analysing the business interruption component of the loss. They projected the best-case costs and compared them to potential outcomes if the claim were allowed to run its course. This data — coupled with comprehensive pricing for material damage costs — enabled constructive discussions regarding the reinstatement options for a greenfield site with the insured and their advisors.

Meaningful outcomes

Throughout the process, a collaborative approach resulted in a proposal to settle the claim at an early stage. Doing so offered a substantial discount compared to the projected cost if the claim were fully pursued. This arrangement provided several advantages for the insured, including immediate peace of mind, increased flexibility in allocating proceeds, and the ability to focus on managing their business rather than dealing with protracted insurance claim procedures.

For insurers, this approach allowed them to cap the claim at a level well below its potential magnitude, thus avoiding significant ongoing costs associated with managing and adjusting such a highly complex claim. The successful resolution of this case demonstrated the immense value of a dedicated team of more than 20 major loss and forensic accounting specialists working collaboratively throughout the entire claim process.

Moreover, insurers’ prompt and effective support enabled the insured to concentrate on proactive measures aimed at mitigating their losses. Remarkably, this claim, one of the largest and most complex property fire claims in Australia’s history — involving a consortium of Australian and London market insurers — reached an amicable and appropriate settlement in just under seven months. This outcome benefited all stakeholders, including the insured, their insurers, and the broader local community.

This case study example underscores the importance of a coordinated, expert-led response to large and complex property fire claims. It showcases how collaboration, transparency, and early settlement discussions can lead to favourable outcomes, even in the face of substantial challenges. 

Stay tuned for the second blog in this series where our experts will highlight a recent flood catastrophe. 

Tony Morgan – National executive loss adjuster 

Sedgwick appoints Kimberly George as Global Chief Brand Officer

January 22, 2024

Kimberly George
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MEMPHIS, Tenn., Jan. 22, 2024 — Sedgwick, a leading global provider of claims management, loss adjusting and technology-enabled business solutions, has announced the appointment of Kimberly George as its new Global Chief Brand Officer (CBO).

George will serve as a member of the company’s marketing and communications leadership team and a global ambassador for the Sedgwick brand. She will support Sedgwick’s client engagement, thought leadership and industry collaboration programs and work across the business to promote Sedgwick, ensuring that the fulfillment of clients’ needs remains at the forefront.

“Kimberly brings to this new role the right combination of business acumen and understanding of Sedgwick’s breadth and depth of solutions,” said Mike Arbour, Sedgwick CEO. “Her passion and enthusiasm for our values, culture of caring and growth mindset are unparalleled, and her wealth of experience gives her a unique vantage point on our company and the industry at-large.”

With 22 years of tenure at Sedgwick, George has held operational, innovation and product development positions and is a well-known thought leader in the claims space and popular conference and webinar presenter. She is president of the Alliance of Women in Workers’ Compensation and co-hosts Out Front Ideas.

“Since I joined Sedgwick more than two decades ago, we have exponentially expanded our reach in many business lines and international markets,” George said. “I am honored to be appointed the company’s first Global CBO and entrusted with sharing the best of Sedgwick with our clients, colleagues, business partners and stakeholders around the world.” 

About Sedgwick
Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. 

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Connect 2024: Sedgwick highlights industry trends for year ahead

January 17, 2024

Connect 2024
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MEMPHIS, Tenn., Jan. 17, 2024 — Sedgwick, a global leader in claims management and loss adjusting solutions, has published “Connect 2024,” which highlights major industry trends and issues that employers, carriers, brokers and risk management and human resources professionals should watch throughout the coming year.

“As we support our clients in navigating the ever-present and evolving challenges in store for 2024, our analysis pinpoints opportunities for collaboration across a variety of industries,” said Scott Rogers, Sedgwick’s Chief Client Officer. “Our vision is to overcome obstacles through a forward-thinking approach based in connectedness and unlocking new potential.”

Sedgwick’s experts and thought leaders gathered research, listened to clients, and identified notable trends related to people, property, brands and performance that will impact the industry in the coming year. They will continue to monitor these issues throughout 2024. Connected conversations will center around:

  • Helping people: The workforce is not just changing; it has been transformed. The dynamic work environment is being shaped by labor and economic challenges, along with shifting workplace priorities as people expect elevated experiences in the office and in everyday interactions. Key conversations will revolve around the workforceconsumer experience and health and well-being, most notably including:
    • Career development
    • Enhanced benefits for overall well-being
    • Incentives to make the workplace more appealing
    • Cost management
    • Outsourcing versus insourcing considerations
  • Restoring property: Insurers and policyholders have been faced with increasing claims volumes stemming from natural disasters, civil unrest and geopolitical developments. The insurance industry will focus on environmental impactscoverage shifts and evolving risks such as:
    • Comprehensive disaster preparation and recovery 
    • Secondary losses
    • Infrastructure vulnerabilities
    • Risk engineering and alternative risk strategies
  • Preserving brands: Organizations across all industries continue to face shifts in the global economy, market conditions and regulatory requirements. In the current market, organizations are considering not just compliance factors, but also brand and reputational challenges. Brands will focus on strategies related to regulationreadiness and reputation while preparing for:
    • Complexities of the recall landscape
    • Cyber readiness
    • Fraud and financial stewardship
    • Risks of next-gen technology
    • Climate-related risks and disclosures
  • Empowering performance: The combination of artificial intelligence (AI) and integrated data has had a profound influence across industries and will continue to make waves as it reshapes work dynamics, interpersonal interactions and cognitive processes. Organizations will adapt as economic and geopolitical developments affect global risks, alliances and trade. Conversations will surround topics related to technologyproductivity and partnership, covering:
    • The ethical use of AI 
    • Support for and empowering humans, rather than replacing them 
    • Geopolitical risks
    • Concerns around recession and uncertainties in job markets

“The past several years have changed the way we connect with one another and, consequently, the way we view our impact,” said Jim Ryan, Sedgwick’s Chief Operating Officer. “As Sedgwick uncovers trends in supporting people, property, brands and performance, we hope industry professionals will join the conversation. Together, we can help translate knowledge into experience and turn ideas into action.”

The insights highlighted in Connect 2024 are part of a larger campaign spanning blogs, events and articles on the importance of connection in effective claims management. For more on Connect 2024, visit the Sedgwick website here. Users can bookmark the link for easy access to frequent insights from Sedgwick’s thought leaders on the latest industry developments.

About Sedgwick

Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders.

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Delivering flood resilience: minimising the impact of flood claims

January 15, 2024

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One billion people globally are at risk of experiencing a flood. In the UK alone, an estimated 5.2 million homes and businesses are at risk. And the probability of flooding is increasing with climate change. Increased winter rainfall — projected to increase 35% by 2070 — and more severe weather events will exacerbate an already untenable set of circumstances.

The impact of flood risk on businesses is also troubling. In the UK, once a flood hits and affects a business, only 60% of them ever re-open their doors. And for businesses that do, each flood claim entails, on average, 50 lost days of business. Meanwhile, government strategy is shifting, with a newfound acceptance that ‘we can only reduce the risk in some places,’ rather than eliminate the risk altogether.

Now, more than ever, we must harness solutions to proactively mitigate flood risks wherever possible.

Do you know the flood risk for your assets?

Investing in flood resilience is driven by an awareness of the flood risk by the key stakeholders (e.g. building owner / occupier / insurer / lender). For property owners, that means assessing a wide range of factors.

What sources of flooding are in the vicinity of the building? What are the flow routes and hazards i.e., how would the water flow to reach the building or asset you’re trying to protect? What’s the history of flooding at the property? Would potential floodwater likely be contaminated i.e., is a water source nearby fresh, or contaminated with sewage or farm waste? What’s the estimated frequency, duration and depth of potential floods specific to the property?

The basics of flooding

Each type of flooding has unique implications. Pluvial, or surface water flooding, occurs when the ground can’t absorb the water fast enough, so it runs over the surface. Fluvial, on the other hand, occurs when streams, rivers or small ditches overflow. Groundwater flooding occurs when the ground is completely saturated with water, and the water has nowhere to go. Finally, tidal flooding is the temporary inundation of coastal areas or areas around rivers during exceptionally high-tide events. An area not often considered is the risk of sewage backflow into a property when the combined foul and surface water system is overwhelmed. Compound flooding is a combination of any of the above flood types.

It may be counterintuitive, but more properties are at risk from surface water flooding than that flowing from a river or sea. If rainfall is prolonged or intense enough, and the ground can’t absorb the water it will flow over the surface and may flood properties which are often thought to be at low flood risk. 

Property flood resilience in practice

Property flood resilience (PFR) is a broad term capturing measures which minimise the impact of flood water on a property or asset — these can be both permanent measures built into the property or temporary measures deployed in a flood. 

PFR is two-fold: resistance measures, or those that reduce the amount of water entering a building (e.g. flood doors/barriers/automatic air bricks), or recoverability measures that limit the damage caused if water does enter a building (e.g. kitchens / floor and wall finishes not damaged when they get wet). The trick is in balancing both measures, and determining which are most effective and timely for a specific property.

When delivering flood resilience, there’s an important and clear methodology UK professionals follow: the code of practice (CoP) for property flood resilience (C790F), published by the Construction Industry Research and Information Association (CIRIA), an independent not-for-profit organisation.

The CoP lays out a six-stage approach that qualified surveyors should follow for effective delivery.

  • Flood hazard assessment – an assessment that reviews flood risk for the property; determines likely frequency, depth, severity and overall susceptibility to flood.
  • Property survey – a property survey and assessment of existing resilience (conducted by a qualified skilled surveyor).
  • Options development – deciding on PFR strategy and creating associated, detailed flood resilient design.
  • Construction – installing PFR products by appropriately skilled contractors or specialists.
  • Commissioning and handover – a post-installation audit conducted by an independent third-party surveyor confirming that measures operate effectively.
  • Maintenance – assigning responsibility for ongoing operation and explaining to customers how to maintain measures.

A separate document, ‘making your property more flood resilient’ (CIRIA C70C) is a helpful resource for home owners or business owners interested in at-home flood resilience guidance.

The importance of winning over customers

Much of the at-risk population in the UK doesn’t actively adopt mitigation measures even when they’ve been impacted by multiple flood events. Recent research found there are several psycho-behavioural barriers that subconsciously influence a person’s likelihood to pursue flood risk mitigation.

According to research commissioned by the Environment Agency, there’s a widespread lack of awareness among the public of the true extent of risk facing their properties. 

Many participants view themselves as being insufficiently at risk to justify any sort of flood mitigation investment. To that end, many misunderstand risk rates entirely. If a surveyor identifies a 1 in 33 annual flood probability, for example, many assume this means the property will experience a flood once in every 33 years on average. It actually means there’s a 3.3% chance of flooding each year — revealing the true risk to be much higher than perceived. This is made worse by homeowners and businesses not wanting to accept that there’s an ongoing risk.

Additionally, most participants didn’t feel empowered to act and had poor knowledge of which PFR measures were available to install. Self-efficacy also proved important in participant decision-making; those who felt confident in their ability to carry out PFR measures were more likely to do so. 

It’s critical to help customers understand their risk and further establish their appetite for risk. Customers must be able to understand the cost-benefit analysis of how much risk they might be willing to accept, and how much they’re willing to invest to protect their property. We must collectively distance ourselves from the belief that only properties near a river, or only properties in certain environments are at risk. All properties can be at risk — and the time to mitigate, using a holistic and strategic approach, is now.

Some of these concepts were previously shared in a recent webinar presented by Ian Gibbs.

Sedgwick announces new executive leadership appointments in Asia

January 9, 2024

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SINGAPORE, 11 January 2024 — Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, has named Veronica Grigg its Chief Executive Officer in Asia along with key executive appointments of Stephen Kerr as Chief Operating Officer and Simon Kay as Director of Executive Services.

“Veronica’s appointment as CEO, along with Stephen’s transition into the role of COO and Simon’s appointment as Director, reflect our continued investment in supporting Asia and reaffirm our focus to realize future business growth,” says Paul White, Regional CEO, International. “With decades of experience in the industry, each appointment builds a high calibre of leadership for Sedgwick in Asia, further strengthening the work for our clients.”

Grigg brings over 25 years of solid industry experience. She is a foremost expert in the insurance and carrier market with leadership expertise focused on business strategy and developing key relationships throughout Asia. She is a visionary executive and one of the most respected leaders in Asia, combining significant skill in transforming the claims and loss adjusting process with a global perspective. She will be responsible for overseeing the strategic direction and growth of Sedgwick in Asia. 

“I am honored to step into the role as the new CEO for Sedgwick in Asia,” said Grigg. “With the region’s growing demand for innovative claims and risk management solutions, Sedgwick is well-positioned to meet and exceed the service expectations of our clients. We will continue to elevate our commitment to our clients with the talented colleagues that help drive our business forward.”

Kerr is moving into the role of COO in Asia. With over 33 years of experience in the claims and loss adjusting industry he has managed major loss claims, high net worth, special investigations and building consultancy businesses. Kerr, who has been with the business since 1995, has been instrumental in driving the delivery of exceptional customer service. He will continue to play a pivotal role in ensuring operational efficiency across Asia.

Supporting the business in driving operational change and success in Asia will be Simon Kay as Director of Executive Services. Kay has more than 30 years’ experience in the loss adjusting industry as an operational leader and adjuster handling large property major and complex losses along with significant corporate nominations and key client relationships. He will be a driving force in projects and vital initiatives across the region.

About Sedgwick

Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. 

Use of vetted network contractors has material impact

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Unvetted contractors may offer to complete a property repair or restoration job for less money, but enlisting tradespeople without the trusted oversight of a repair network brings additional risks — and possibly higher costs in the long run. That first installment in our blog series highlighted some of the human risk factors; here, we will focus on risks related to the construction materials used. 

Quality and sourcing

The tragic Grenfell Tower fire of 2017, in which 72 Londoners lost their lives and hundreds more were injured, highlighted the potentially dire consequences of using inappropriate or inferior building materials. Subsequent investigations into the mass casualty event revealed that the low-cost materials used in the tower’s cladding did not comply with regulatory requirements and significantly contributed to the fire’s rapid spread. Better oversight of the construction process and selection of the building materials would likely have limited the scope of the fire damage. 

That kind of quality oversight is a major advantage of working with contractors vetted by an insurance repair network. Management has strong professional backgrounds in construction and works to ensure tradespeople do not cut corners when it comes to the safety and durability of materials — both to prevent future losses and to protect human welfare. 

Another critical aspect of materials that vetted networks oversee is sourcing. Network management protects against the purchase of building materials through black or grey markets, where quality and reliability are difficult to verify. Further, many networks require that contractors’ materials be ethically sourced — manufactured in environments that uphold human rights, provide safe and healthy working conditions, pay fair wages, and practice sound business ethics. Repair networks’ efforts to ensure proper quality and sourcing may mean somewhat higher materials costs on the front end, but the possible human cost of neglecting these protections is far greater.

Environmental footprint

According to the UK Green Building Council, construction is responsible for 25% of the country’s carbon emissions. The industry is under pressure to increase its commitment to sustainability. Additionally, many corporations — including insurance companies — are heavily focused on environmental, social and governance initiatives to build brand goodwill and put their values into practice for the good of humanity and the planet. Oftentimes, these ESG efforts involve setting organisational targets for carbon-footprint reduction, and a range of stakeholders — regulators, boards, investors, employees, job candidates and the public at large — are holding companies accountable.

Building contractors may be well-intentioned in doing their part to promote sustainability, but many are small entities without ample resources to tackle this complex challenge. They don’t have the know-how to identify feasible greener-alternative building materials or the buying power to procure them for reasonable rates. The centralised resources of a managed network can offer a particular strategic advantage here. Leading networks have sustainability experts and resources to support contractors and insurers in reducing the environmental impact of repair jobs and property claims and pursuing their emissions goals. 

By way of example, Sedgwick’s UK repair solutions recently introduced a carbon value calculator that quantifies the emissions of building repairs on property damage claims. The tool applies CO2 emissions values to materials, labour and plant on a per-line basis, helping insurers understand not just the financial cost of each repair, but also its environmental impact. The calculated data simplifies offsetting strategies and is designed to help customers evaluate the impact of opting for greener alternatives in pursuit of their net-zero goals. This is the type of innovative resource to which independent contractors (and many insurers) wouldn’t have access without utilisation of a managed repair network. (For more on reducing the environmental impact of property claims, see our colleagues’ earlier post on the blog.)

An additional environmental concern is the troubling practice known as “fly-tipping,” or the illegal dumping of waste materials on land or in water not licenced to accept it. Regrettably, some contractors inappropriately dispose of construction waste this way to save the time and costs associated with safe and proper disposal. Managed repair networks work to ensure their contractors do not engage in fly-tipping — instead building in adequate costs to allow for proper waste disposal.

Providing true value

Price is, of course, an important factor in selecting a contractor partner for a repair job, but it is not the only factor worth considering. With rising labour and materials costs, a repair estimate that’s significantly below the current market rate is probably too good to be true. 

Insurers and property owners must use further discretion in identifying partners that align with their values and will use quality materials to complete quality work. Turning to vetted contractors that belong to well-managed networks offers the highest likelihood of the job getting done right, for a fair price and in a way that protects both human and natural resources.

Learn more — read about Sedgwick’s commercial repair solutions (which use only licensed and vetted contractors) for the UK and U.S. markets