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
| Aug 10, 2016
UNIVERSITY GIANTS: Facing money woes, the nation's colleges double down on innovative ideas
Budget constraints are compelling some public institutions to pursue alternative methods of financing their major building projects.
| Aug 9, 2016
Top 100 University Construction Firms
Turner Construction Co., The Whiting-Turner Contracting Co, and Skanska USA top Building Design+Construction’s annual ranking of the nation’s largest university sector construction and construction management firms, as reported in the 2016 Giants 300 Report.
Building Team | Aug 4, 2016
Thought leaders from architecture, engineering and construction to meet at 2016 Bluebeam eXtreme Conference
Bluebeam users inspire technological change through shared insights and training at three-day event.
| Aug 4, 2016
MULTIFAMILY BUILDING GIANTS: Rental complexes focus on affordability, accessibility, and specialty amenities
To address the affordability problem and attract tenants, owners and developers are experimenting with smaller and smaller units, amenity-rich environments, and “co-living” concepts.
| Aug 4, 2016
Top 80 Multifamily Construction Firms
Lendlease, Suffolk Construction Co., and Clark Group top Building Design+Construction’s annual ranking of the nation’s largest multifamily building sector construction and construction management firms, as reported in the 2016 Giants 300 Report.
| Aug 3, 2016
GREEN BUILDING GIANTS: Sustainability leaders turn to wellness and technology to get an edge
AEC leaders in green building are stepping up to a higher level of innovation and to be a green leader today, you have to dig deeper into data.
| Aug 3, 2016
Top 90 Green Building Construction Firms
Turner Construction Co., Clark Group, and Hensel Phelps top Building Design+Construction’s annual ranking of the nation’s largest green building sector construction and construction management firms, as reported in the 2016 Giants 300 Report.
| Aug 1, 2016
K-12 SCHOOL GIANTS: In a new era of K-12 education, flexibility is crucial to design
Space flexibility is critical to classroom design. Spaces have to be adaptable, even allowing for drastic changes such as a doubling of classroom size.
| Aug 1, 2016
Top 80 K-12 School Construction Firms
Gilbane, Balfour Beatty, and Core Construction head Building Design+Construction’s annual ranking of the nation’s largest K-12 school sector construction and construction management firms, as reported in the 2016 Giants 300 Report.
| Jul 29, 2016
AIRPORT FACILITIES GIANTS: Airports binge on construction during busy year for travel
Terminal construction will grow by nearly $1 billion this year, and it will keep increasing. Airports are expanding and modernizing their facilities to keep passengers moving.
