Many construction companies are needing to take the risk out of brownfield sites. It is one of the growing challenges they face when tendering for projects. 

More contaminated sites are becoming available as a solution to the UK’s housing shortage. But with the increasing use of brownfield sites, there is an equally increasing risk on construction companies to meet clients’ demands. 

It’s just one of the reasons why construction businesses are becoming more risk averse. Statistics show that an increasing number are wary of tendering for work with a high-risk profile, including contaminated land. 

According to a Gleeds survey, 52 per cent said contracts had an unacceptable risk profile. As a result, many do not tender for work as they don’t want to take the risk. 

Industry bodies such as the Construction Leadership Council have warned about the “unacceptable” practice of clients transferring risk to construction firms. 

Just last year, the CEO of Sisk told Construction News that managing risk was an increasing challenge. Steven McGee said: “The construction industry often struggles with the balance of risk transfer. Contractors are expected to manage risks that aren’t always within their control.” 

So, how do we help our clients? Let’s take a closer look… 

What is environmental risk? 

It is important for construction companies to understand the risks involved in any project. In 2023, a housebuilder was fined £480,000 for failing to prevent multiple pollution incidents in Wales. 

No construction company sets out to create an environmental problem on projects. Most use specialist companies to carry out environmental assessments to identify any contaminants. Once this is carried out, a management plan is put in place to manage the risks.  

Getting environmental risk wrong can be devastating on both the construction business and the local environment. 

The main examples of pollution that create environmental risk are: 

• Historic. These sites are contaminated by previous land uses. This is often land that was used for heavy industry where historic pollution was previously contained. 

• Soil. Soil contamination on a site can be caused from various reasons. These include poor fuel storage or accidents that release hydrocarbons and incorrect waste management. 

• Water. Direct spills or run-off may end up in groundwater or rivers. 

• Air. Contaminated dust can escape, particularly in dry summer months. 

• Odour. Bad smells can be released during construction projects that impact neighbouring residents’ quality of life. 

• Loss of biodiversity. Construction projects may harm plant or animal life by damaging natural habitats. This can include silt running off into watercourses, for example. 

What is environmental liability insurance  

To mitigate these possible outcomes, environmental liability insurance is recommended. This covers the cost of repairing environmental damage caused from both common law claims and those arising from UK and EU legislation. 

In the event of an environmental issue, this specialist insurance policy will cover a range of issues. These can include: 

• Sudden and gradual pollution. 

• First party clean-up costs imposed by regulatory authorities. 

• Third party liability. 

• Legal costs and expenses. 

As with any insurance, it is hoped that there is never an event where it is used. But having environmental liability insurance to cover individual projects means the risk on that site is reduced. This helps increase confidence in construction companies as they are covered for any unforeseen issues. Even the most rigorous remediation plan cannot foresee unknown contaminates. This can help make problematic sites a more viable option. 

Helping clients take risk out of brownfield sites 

No one knows the future. But taking the risk out of brownfield sites can make any contaminated land viable for development. 

ATG Group offers a wide range of sustainable solutions that remediate contaminated sites that meet Environment Agency standards. But even we don’t know what will be identified as a contaminant in the future. 

For example, the “forever chemicals” PFAS were identified as a concern over 40 years ago. But they were not banned in the European Union until 2020 once studies confirmed their toxicity. Since then, sites where PFAS have been identified must be remediated. 

The chemical had many applications, but its biggest threat is on sites where Aqueous Film Forming Foam (firefighting foam) has been used in the past. At the time of use, no one realised they were contaminating the land. But that now must be dealt with if identified on a site that is being developed. 

The PFAS story shows how vital environmental liability insurance is for contaminants that only come to light in later years. And this is where we help our clients who are developing contaminated land. 

Working in conjunction with a specialist environmental insurance company, we can help our clients secure cover for £10 million to £30 million for 10, 20 or 30 years.  Policies are available for projects in the UK and in all EU countries. 

That means our clients have the peace of mind that no matter what future contamination issue is identified, they are covered. It also means that no matter who owns the land in future, that should any issue be identified, there is a substantial pot of cash for dealing with future environmental issues.  

Do you want to take risk out of your brownfield site?

We have worked with clients who have asked us to help them take out the right cover on a range of projects. From harbour sites to large sports sites on previously contaminated land.   

By taking out the risk, it unlocks sites that would often lie empty and helps construction companies tender for sites that they would have previously identified as too risky. 

If you would like to know more about how we can help you, contact us today.