Modular Builder Facing Market Declines

A Queensland-based commercial builder specialising in high-end modular construction reached a critical juncture in their growth strategy. While their business model focused on efficient, high-quality modular office blocks was thriving, they faced a significant hurdle: the insurance market's hesitation toward "non-traditional" construction methods.

The client was moving into a phase of strategic scaling, with projected turnovers reaching the $3M mark. However, they found themselves in a position of uncertainty. Their existing coverage didn't fully account for their dual-role operations, balancing 93% physical construction with 7% critical design advisory, including QBCC code compliance and fixture placement.

They needed to ensure that their professional advice was as protected as their physical builds, but they were met with market declines and a lack of clarity on how to bridge the gap.

Modular construction is often misunderstood by standard insurance markets, leading to broad "blanket" declines or inadequate coverage terms. The client was unsure how to present their unique risk profile, specifically the integration of preliminary design sketches and structural engineering coordination, to underwriters.

Our role was to move beyond the transaction and provide a deep-dive consultation. We stepped in to:

• Deconstruct the Risk: We translated their specialised modular workflow into a language that top-tier underwriters could understand
• Educational Outreach: We worked closely with the client to document their qualifications (Cert IV in Building and Construction) and their 100% QLD-based commercial focus to build a robust risk profile
• Market Navigation: When traditional providers declined cover due to the "modular" nature of the projects, we didn't stop. We advocated for the client, highlighting their low-rise expertise and professional oversight

The primary challenge was the market's broad misunderstanding of modular construction. Many underwriters viewed it as inherently riskier than traditional building methods, despite the client's track record and qualifications.

By workshopping the risk with our specialist underwriting panel, we were able to filter through the market volatility. We successfully pivoted away from restricted providers and negotiated terms with a leading specialist insurer that recognised the quality of the client's operations.

We restructured their protection by securing a comprehensive Professional Indemnity policy that specifically included their design-related activities. Furthermore, we streamlined their transition by identifying and closing gaps between their current Public Liability and the new professional requirements, ensuring a seamless "risk-proof" foundation for their upcoming projects.

The client moved from a state of frustration and potential exposure to a position of absolute operational confidence. They now operate with the certainty that both their physical modular builds and their professional design advice are fortified against the complexities of the modern construction landscape.