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One in five tradespeople and small contractors struggles to pay for supplies as late payment impacts cash flow

    • Late payment is an issue for 41% of tradespeople
    • 37% turn work away from known late payers
    • 19% find that they do not have the cash flow to pay for supplies as a result of late payments
    • 14% have to employ resource just to chase late payment
    • 10% find that they struggle to meet their salary bills due to late payment

In its annual Healthcheck* of the UK’s tradespeople and small contractors, ECIC, the specialist insurer for the construction sector has found that late payment is an issue for 41% of firms, impacting electricians and plumbers the most.


Furthermore, one in five (19%) said they struggle to pay for supplies because their cashflow has been impacted by late payment and 14% have to fund specific resource just to chase outstanding payments.  However, reflecting the high demands on skilled contractors, firms are taking control of the issue where they can, with 37% of the contractors surveyed saying they turn work away from known late payers.


John Flaherty, Business Development Executive for ECIC said: “It’s shocking that despite Government promises of support, late payment is still such an issue for the construction industry – to the extent that it affects contractors’ ability to buy supplies.  This can have a serious knock-on effect for their business, delaying projects and damaging customer relationships. 


The good news is that where they can, firms are being selective about who they will work with, based on the customer’s previous payment performance.  By taking a firm stand in this way, it sends a clear message that late payment won’t be tolerated.” 


The findings of the survey follow the introduction of the Enterprise Act in May bringing changes to the speed of commercial insurance claims payments.


John Flaherty continues: “As part of the Enterprise Act introduced in May, unnecessary delays in claims payments should be a thing of the past, giving tradespeople some much needed certainty when they need to make a claim.   It always helps to work with an insurer or broker who knows your business sector inside out and has a proven track record for claims.  Biggest is not always best and we would urge contractors and tradespeople to seek evidence of claims service before placing cover.”


Ends


*ECIC surveyed 200 roofers, electricians, plumbers, heating and ventilation engineers, joiners, plasterers, decorators and general builders from all parts of the UK about their prospects for the coming year. The survey took place in the first quarter of 2016.

 

ECIC media contacts

For further information please contact the ECIC Press Office at HSL:  Alison Reeson/Clare Watson.  0208 977 9132.  ECIC@harrisonsadler.com



ECIC has a Best's Credit Rating of A- effective as of September 2016. For the latest rating, access www.ambest.com               

 

EC Insurance Company Limited (ECIC) is part of the Markel group.  Markel Corporation is the ultimate holding company for ECIC and Markel International Insurance Company Limited. EC Insurance Company Limited (ECIC) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. (Financial Services Register No.: 202123). Registered Office: 20 Fenchurch Street, London EC3M 3AZ. Company Number: 01266206. Markel International Insurance Company Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (Financial Services Register No.: 202570). Registered Office: 20 Fenchurch Street, London EC3M 3AZ. Company Number: 00966670. Please note that telephone calls may be recorded for training and monitoring purposes.

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