NFRC said the warranty could replace the need for clients to demand retentions on jobs

Subcontractors could see their cashflow radically improved after a major construction federation brokered an insurance deal that potentially bypasses the need for retentions.

The National Federation of Roofing Contractors (NFRC) said that the 10-year warranty covering defects, facilitated by insurers QANW, could replace the need for clients to demand retentions on jobs.

Ray Horwood, chief executive of the NFRC, said the federation has begun urging its 1,000-plus members to take up the cover, priced at considerably less than the 3-5% typical with retentions.

Horwood said: “We are encouraging members to use this cover and adopt a ‘no retentions’ policy.”

However, Mark Clinton, partner of law firm Thomas Eggar, thought adopting the policy could result in opposition from clients. “A lot of contractors may not welcome it as they like having cashflow [themselves],” he said.

The NFRC is a member of the National Specialist Contractors’ Council, which launched its “No retentions” campaign earlier this year to combat the problem of payment abuse by contractors.

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