U.S. construction firms on average paid more for their insurance in the first half of 2013 as underwriters continue to seek price increases across the breadth of their contractor portfolios, according to a report published by Marsh.
Pricing for contractors general liability, project-specific general liability, umbrella and excess liability, workers’ compensation, and residential construction insurance was up between 3% and 7% on average during the first half of the year, according to Marsh’s Construction Market Update—First Half 2013. Construction firms with poor loss histories were more likely in general to have seen double-digit rate increases.
Pricing for non-residential construction, and contractors and architects and engineers professional liability insurance also was up on average during the first half of the year, but to a lesser degree.
“US construction firms are grappling with a firming insurance market, especially when it comes to liability insurance where underwriters continue to tighten coverage terms and seek rate increases to make up for reduced investment income,” said Michael Anderson, leader of Marsh’s US Construction Practice. “With a zero interest rate environment, there is no cushion against a poor underwriting decision.”
According to Marsh’s report, not all construction lines are experiencing rate increases. Premium rates for builders risk insurance generally remained flat during the first half of the year despite more demand for coverage. Similarly, contractors pollution liability rates remained generally flat to down 5%.
“While underwriters are attempting to gain rate increases, the market is awash in capital and new entrants are helping to maintain competition. The good news for well-managed construction firms is they can still generally find competitive pricing and terms,” Mr. Anderson said.
About Marsh
Marsh, a global leader in insurance broking and risk management, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has approximately 26,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With over 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; Mercer, a global leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a global leader in management consulting. Follow Marsh on Twitter @Marsh_Inc.
Related Stories
Contractors | Oct 1, 2020
Molly McShane named CEO of The McShane Companies
Molly McShane named CEO of The McShane Companies
Coronavirus | Sep 28, 2020
Evaluating and investing resources to navigate past the COVID-19 pandemic
As AEC firm leaders consider worst-case scenarios and explore possible solutions to surmount them, they learn to become nimble, quick, and ready to pivot as circumstances demand.
Coronavirus | Sep 24, 2020
The Weekly show: Building optimization tech, the future of smart cities, and storm shelter design
The September 24 episode of BD+C's "The Weekly" is available for viewing on demand.
Products and Materials | Sep 23, 2020
A new portable restroom is designed for mobility
Lendlease invented the H3 Wellness Hub, which can include natural lighting and UV bacteria control.
Healthcare Facilities | Sep 10, 2020
Easing the oncology journey: The role of urgent care
Oncology patients are better served when they’re connected to the right staff.
Airports | Sep 10, 2020
The Weekly show: Curtis Fentress, FAIA, on airport design, and how P3s are keeping university projects alive
The September 10 episode of BD+C's "The Weekly" is available for viewing on demand.
Contractors | Sep 1, 2020
Construction spending dips 1.2% in July 2020; most building sectors see decline
Of the 16 nonresidential subcategories, 10 were down on a monthly basis.
Contractors | Sep 1, 2020
Maryland County to build six schools in P3 arrangement
Prince George’s County, Md., is the first jurisdiction in the nation to use public-private partnership for school construction.
Contractors | Aug 31, 2020
Officials to release new data showing the impacts of the coronavirus on the United States’ construction workforce
Data will be revealed during virtual media event on Wednesday, September 2 at 1 P.M. EDT.
Giants 400 | Aug 28, 2020
2020 Giants 400 Report: Ranking the nation's largest architecture, engineering, and construction firms
The 2020 Giants 400 Report features more than 130 rankings across 25 building sectors and specialty categories.