In the construction industry, no two years are the same. Turnover can fluctuate, projects scale up or down, and labour levels change throughout the year. That’s why many construction insurance policies are based on estimated figures, with a year-end adjustment to reflect what actually happened.

This process is known as a year-end declaration—and understanding how it works can help you avoid unexpected costs and stay properly protected.

Why are construction policies based on estimates?

When your insurance is arranged, your insurer will calculate your premium based on projected figures such as:

• Annual turnover
• Wage roll / PAYE labour
• Use of subcontractors

These estimates allow your policy to be set up quickly so you can get on site with the right cover in place.

What happens at the end of the policy year?

At renewal, you’ll be asked to provide your actual figures for the previous 12 months.

This allows the insurer to check whether the premium you paid accurately reflected the level of work and risk over the year.

• If your business has been busier than expected, you may have an additional premium to pay
• If things were quieter, there is usually no refund, as most policies operate on a Minimum and Deposit basis

Why don’t insurers refund premiums?

Construction is considered a higher-risk industry, and insurers price policies with a minimum premium to reflect the fact they’ve been covering you for the full year—regardless of fluctuations in activity.

This also means that if a policy is cancelled mid-term, a return premium is not typically available.

Getting your estimates right matters

In construction, it’s easy for figures to change as projects are won or delayed. However, providing realistic estimates at the start of your policy can make a big difference.

Accurate estimates help:

• Ensure your cover matches your actual level of work
• Reduce the risk of large, unexpected additional premiums
• Give you better control over your insurance costs

How additional premiums are calculated

If an adjustment is needed, it’s calculated using the same rates agreed at the start of your policy. This ensures consistency and fairness—you’re not being re-rated after the fact.

Your broker can also review and negotiate any additional premium with your insurer, particularly where there are changes in business structure or labour mix.

Protection that continues beyond the policy year

For construction businesses, claims don’t always happen straight away. Issues can arise months—or even years—after work has been completed.

That’s why Employers’ Liability and Public Liability policies are designed to cover incidents that occur during the policy period, even if the claim is made later.

In simple terms, if the work was carried out while your policy was active, you remain protected—even if the insurer is no longer on cover today.

Final thoughts

Year-end declarations are a normal part of construction insurance, but they shouldn’t come as a surprise. With the right advice and accurate information, the process is straightforward and ensures your cover keeps pace with your business.

If your turnover, labour, or subcontractor use has changed during the year, it’s always worth discussing this with your broker early—so there are no surprises at renewal.

Need advice?

If you’d like help reviewing your figures or understanding how your policy will be adjusted, get in touch with our team—we’re here to make the process simple and ensure you’re properly protected.