“Around 30 years ago, I started specialising in broking the UK commercial divers sector. Over the years I have progressed to Director, and I lead a team, the majority of whom have worked with me in this specialism for the last 20 years. I began specialising in commercial divers at the first Lloyd’s broker I worked at as they had an exclusive market facility in place with Lloyd’s security, placing offshore and diving related risks. My team and I still work with the majority of the same insurers today.
The diving and offshore sectors really took off in the mid-70’s/early 80’s because of exploration of oil in the North Sea and the construction of the Thames Barrier. My company placed the insurance for the diving contractor that was involved in the underwater construction phase, which took eight years to complete. We still have contact with the owner, now in his late 80’s, and act as broker to his consultancy company today. This client was instrumental in setting up the Association of Diving Contractors (ADC) in the 90’s and was Chairman for many years. The Underwriting Exchange (TUE) is proud to be the exclusive recommended broker for its members for the last 10 years.
The COVID-19 pandemic impacted the commercial diving sector. Initially, we had our diving contractor clients, like all clients/sectors, worrying that they were going to go out of business however, they were one of the first sectors that were safely able to continue work, being seen as essential workers throughout the lockdowns. Many diving companies actually ended up being far more active and growing post-pandemic because they could travel up and down the country more easily due to minimal traffic on the roads. They were called in to do a lot of work that had been put aside for years, such as environmental work – waterways, utilities, and bridge inspections to name a few.
Across the world, renewable energy is becoming increasingly important, and this has been a huge area for development in the UK commercial diving sector. As it has evolved, we have seen several of the bigger companies we insure move into supporting the renewable energy sector with work on the wind farms (cable laying, tie-ins both offshore and shoreline).
Placing insurance for the commercial divers sector is a deeply specialist area. There are not many brokers that specialise in this complex area, and capacity is limited due to its extremely high risk nature. For example, commercial divers not only work at depths of up to 50 metres where they rely on a topside support team to provide air/communication via an umbilical, they conduct a lot of inspection work in confined spaces, salvage operations with large pieces of unstable debris to remove, and on occasion, they will be involved in removing explosive ordnance. All of these are potentially hazardous activities that require great skill, knowledge and careful planning/risk assessment before the diving contractor undertakes the job.
When the commercial divers sector was first being established, it was understandably difficult for insurers as they had no claims history to go on and therefore, rates in particular on the Employers Liability section started quite high. As years went on and more claims data was gathered rates started to ease, as much as 50% in some areas.
Due to the extensive health and safety regulations/ACOP’s in place for the sector, accidents have proved to be relatively low in comparison to many land construction sectors. However when an accident does occur, it is likely that the injuries sustained will be significant and therefore, claims are often costly. Over the last few years we have sadly had a diver fatality whilst working on a salvage operation, significant life threatening injuries suffered by a diver whilst topside filling an air cylinder that exploded and the recent the storm ‘Babet’ that hit Aberdeen port and harbour leading to significant loss and damage to equipment on site.
When we are looking at the insurance for a commercial diving contractor, we consider the following aspects:
Being an ADC member also makes a business more favourable to insurers, because of the standards and regulations they have to adhere to, to be a member.
Taira Caiton, Secretary of the ADC
We have been operating in a hard market for the past five years. Currently, we think the rates have plateaued but due to the cost of living crisis amongst other factors, there will be pressure for rates to improve, providing recent claims history supports that.
Liability insurance is rated based on a business’s wages and turnover and because everything is increasing in price, from materials to labour, our clients are experiencing increased turnover which would automatically increase the cost of an insurance policy. Despite this, their exposure is not any different, which is becoming an issue that we are discussing at length with insurers. Furthermore, with salaries increasing as a result of the cost of living crisis, there is a potential that Employers Liability claims will be higher as the majority of a claim will be relative to the future loss of earnings.
A lot of commercial diving work is essential, and they play an important role in maintaining our infrastructure and keeping the world running, which is often unnoticed. To ensure we are supporting clients through this economically challenging period, we are working tirelessly on their behalf to secure the most competitive terms we can.
At TUE, we have fantastic relationships with our panel of insurers and this helps us secure competitive rates for our clients. As their trusted insurance advisors, it is our role to fight their corner to ensure they feel as minimal impact to their insurance premiums as possible, now more than ever.
Taira Caiton, Secretary of the ADC, commented:
“The ADC and its members have worked with TUE for a number of years now. We have always been impressed with the transparency and effort from Cliff and his team. They are incredibly knowledgeable of the commercial diving sector which is hugely important when working with ADC and its members in what is a very diverse industry.”
I really enjoy being a specialist in this unique sector, dealing both directly with clients and acting as a specialist wholesale Lloyd’s broker.”