Wates leads the way in risk management

Wates is the first UK company to use innovative risk management insurance – Subguard.  Wates is piloting the use of Subguard, which is widely used in the US, to give customers and the supply chain greater protection and security in response to challenging market conditions.

Wates is working with Zurich Global Corporate UK (Zurich) and Jardine Lloyd Thompson Ltd (JLT) to lead the way in risk management in the construction sector.  The goal of this new risk management product is to protect clients against major subcontractor default, which could lead to a significant delay or extra cost on projects. 

Andrew Laird, Group Commercial Director for Wates, said:  “We already have extremely robust controls in place and have every confidence in our supply chain.  With the current economic climate, we see an opportunity to provide our clients with even greater peace of mind that they are protected in the extreme event of a key subcontractor failing on their commitment on a project.  Subguard provides an innovative and cost effective way for us to mitigate this risk.

“One of the reasons our clients choose to work with us time and again is our excellent financial standing. We have a robust balance sheet, no reliance on external funding and no toxic assets.  Providing extra financial protection for our clients makes good business sense.”

Wates has worked with Zurich and insurance brokers JLT, to develop Subguard specifically for the UK construction market. David Cahill, Partner, JLT commented: “Wates is leading the way in risk management through implementing Subguard in their business.  The work we have done with Wates, particularly in terms of our involvement with Zurich’s due diligence of Wates’ rigorous subcontractor selection process, has provided JLT with an important insight into Subguard for use in the UK and European construction markets.”

Subguard protected over US$35 billion of subcontract works in the US in 2007 and Zurich expects the take-up of this product to grow in the UK over the next 12-18 months.

Categories: supply chain

Tags: risk management, Subguard