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
| Nov 19, 2014
The evolution of airport design and construction [infographic]
Safety, consumer demand, and the new economics of flight are three of the major factors shaping how airlines and airport officials are approaching the need for upgrades and renovations, writes Skanska USA's MacAdam Glinn.
| Nov 19, 2014
Construction unemployment hits eight-year low, some states struggle to find qualified labor
The construction industry, whose workforce was decimated during the last recession, is slowly getting back on its feet. However, in certain markets—especially those where oil drilling and production have been prospering—construction workers can still be scarce.
Sponsored | | Nov 19, 2014
3 technology trends on the horizon
As technology continues to evolve exponentially, construction firms have ongoing opportunities to enhance the quality, speed, and efficiency of building projects and processes. SPONSORED CONTENT
Sponsored | | Nov 19, 2014
Long-life coatings vs. long-life screws
Are you concerned with the long-life protection of your metal building project? SPONSORED CONTENT
Sponsored | | Nov 19, 2014
Build green while you work green
Leading general contractors, including Skanska USA and Turner Construction, are implementing sustainable modular jobsite offices throughout the country. SPONSORED CONTENT
Sponsored | | Nov 19, 2014
Fire resistive, blast-resistant glazing: Where security, safety, and transparency converge
Security, safety and transparency don’t have to be mutually exclusive thanks to new glazing technology designed to support blast and fire-resistant secure buildings. SPONSORED CONTENT
| Nov 19, 2014
Must see: Arup, Damian Rogers propose urban surf park in Melbourne
The surfing pool would offer 98-foot-wide waves that would run the length of the 500-foot-long enclave.
| Nov 18, 2014
Architecture Billings Index dips in October, still shows positive outlook design services
Headed by the continued strength in the multifamily residential market and the emerging growth for institutional projects, demand for design services continues to be healthy, as exhibited in the latest Architecture Billings Index.
| Nov 18, 2014
New tool helps developers, contractors identify geographic risk for construction
The new interactive tool from Aon Risk Solutions provides real-time updates pertaining to the risk climate of municipalities across the U.S.
| Nov 18, 2014
Grimshaw releases newest designs for world’s largest airport
The airport is expected to serve 90 million passengers a year on the opening of the first phase, and more than 150 million annually after project completion in 2018.