Marsh, a global insurance broker and risk advisor, has partnered with specialist insurer Beazley to incentivise environmental, social, and governance (ESG) excellence in the construction sector.
The collaboration offers construction contractors access to additional professional indemnity (PI) cover based on their Environmental, Social, and Governance (ESG) performance.
The initiative stems from Marsh’s ESG Risk Rating (ERR), an assessment tool launched in March 2022. ERR evaluates organisations’ ESG performance, measuring their sustainability and climate-related risks against more than 10 internationally recognised standards and frameworks.
This tool allows clients to identify opportunities and risks and gain access to additional insurance market capacity.
Construction contractors globally, excluding the United States, can now qualify for additional PI cover based on their ERR score meeting Marsh and Beazley’s threshold.
Contractors scoring six or higher on the ESG Risk Rating are eligible for an extra US$1 million in PI cover, a 20% increase on top of Beazley’s US$5 million maximum line.
Kelly Looney, CEO of UK Construction, Infrastructure & Surety at Marsh Specialty, emphasised the growing importance of ESG in the construction sector.
Looney stated, “ESG concerns are a growing area of scrutiny for the global construction sector, and financial institutions are looking to ESG performance as a marker of sustainable and resilient businesses.”
Andrew James, Focus Group Leader, Large Client Professional Liability at Beazley, highlighted their commitment to supporting construction contractors prioritising ESG.
James noted, “Companies that look after the environment, their communities and have strong governance are also likely to be successful in managing and mitigating their risk landscape.”
“A key role of a specialty insurer is to work with clients as they seek to improve their risk management and we are pleased that for construction contractors that perform well against ESG criteria, we are able to support their efforts by offering them additional capacity.”
