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A third of electrical contractors struggle to pay for supplies as late payment impacts cashflow

  • Late payment is an issue for 2 in 3 (65%) of electrical contracting businesses
  • 50% of firms are forced to turn work away from known late payers
  • Nearly 1 in 3 (31%) find that they do not have the cash flow to pay for supplies as a result of late payments
  • Almost 1 in 4 (23%) have to employ additional resources just to chase late payment
  • 15% of firms find that they struggle to meet their bills due to late payment

Electrical contracting businesses are being paid late by firms up the supply chain more than any other construction trade sector, according to a new survey of tradespeople by ECIC, the specialist insurer for the construction industry. In its annual Healthcheck*, ECIC found that late payment is an issue for 65% of electrical firms compared to an industry average of 41% for other tier two contracting firms.


Furthermore, close to a third (31%) of electrical contractors said they struggle to pay for supplies because their cashflow has been impacted by late payment, compared to 19% for the construction sector as a whole and almost a quarter have to fund specific resources just to chase outstanding payments.  However, potentially reflecting the high demands on skilled contractors, some firms are now being forced to turn work away from known late payers, despite the likely loss of income.


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 electrical contractors. This can have a serious knock-on effect for their business, delaying projects and damaging customer relationships. 


“As a result, some electrical contractors are being forced to turn away work based on the client’s previous payment performance, hindering their bottom line.”


The findings of the survey precede 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 hopefully be a thing of the past, giving electricians 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 is a trading name of Markel International Insurance Company Limited, whose ultimate holding company is Markel Corporation.

                

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. 

 

© 2018 ECIC t: 0330 221 0250 e: ecic@ecinsurance.co.uk