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Arch warns off-site storage risk is rising as equipment is bought early
Arch Insurance International’s Construction Risk Report found 78% of surveyed firms saw more volatility in material sourcing, and 52% cited supply chain disruption as a top risk.
Construction firms are increasingly ordering critical equipment earlier to protect schedules from supply chain disruptions, but the approach shifts more risk to warehouses and other off-site locations before work has progressed, Arch Insurance International warned. Underwriters said brokers will need to address emerging concerns while projects are still being designed, including theft and fire risk, natural catastrophe exposure, equipment maintenance, and the way high-value materials build up during the policy period. Arch added that some specialist components can remain in storage for months, requiring preservation measures if they are not installed and commissioned within their expected timeframe.
Arch’s inaugural Construction Risk Report surveyed 44 property owners, developers, and contractors worldwide. The insurer found 78% reported greater volatility in material sourcing and procurement, 52% named supply chain disruption among their leading risks, and almost one-third had reconsidered or relocated projects due to geopolitical concerns.
Arch’s head of construction, Tim Chapman, said buying materials earlier is a positive step for mitigating supply chain disruption and has become “the norm rather than the exception” as clients work to protect schedules. He said insurers will look closely at security arrangements, off-site storage locations, CAT exposures, and how value accumulates over time, and that placement discussions may need to cover storage site selection, fire and security protections, maintenance arrangements, and potential changes to procurement plans during a project.