Roofing Contractors – Are you Considering Diversification?
As we approach Brexit with no deal in place and companies in all sectors across the UK becoming increasingly nervous about the future and what it holds, many businesses are seeking to diversify in a bid to ensure future prosperity. This is just as true of roofing contracting companies as any other business, with many roofers seeking to broaden their skills base in order to increase their contract opportunities.
With the modern roofing sector comprising a wide range of different disciplines, there is plenty of scope for roofers to diversify in order to develop and grow their businesses. However, diversification may bring with it increasing insurance risks. So, it’s vital to understand the importance of declaring any significant change in the type of contracts being entered into to ensure that your insurance cover is still valid.
Roofing contractors should understand that it’s vital to declare accurately the specific types of risks their business deals with on a daily basis and make sure that they are included in their insurance policies. Using an insurance broker is probably the most efficient way to ensure that all the relevant necessary information has been given so that the insurance contract offers comprehensive cover at all times. This means that if you’re considering diversifying (or have already begun to), you may need to review the disclosure process of your business to make sure that records are available of the Individuals responsible for arranging insurance cover.
An insurance broker will work with you, asking questions based on the information you provide, in order to ensure that you fully understand the risk profile of your business as it diversifies and enters into new contracts for the future or enters into new markets. The broker will provide you with a detailed explanation of potential insurance contracts to make sure you’re aware of all restrictions, exclusions and terms and conditions you need to comply with.
It’s often the case that diversification brings with it new partnerships and other relationships so it’s vital to choose your partners wisely (and inform your insurance broker about these relationships). It’s also much easier to diversify if you have some capital available to make the process easier and more cost-efficient in the long term. You may consider borrowing the funds necessary to diversify and add new services to your current offerings. In this case, it’s vital that you research the market thoroughly before making any commitment to borrowing from banks or other lenders so that you have a clear idea of the amount of new work you’re likely to gain from diversifying.
Try to test the market slowly at first, launching too many new services at once means that you may risk doing none of these well. Start off by adding one or two new services, make sure you’ve mastered them comprehensively and then, perhaps, consider adding more if the first round has been successful. It’s likely to be a bit of a learning curve for most roofing contractors who decide to diversify, so consolidate what you learn before going on to expand even more.