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
| Jun 18, 2013
Report: HVAC occupancy sensors could slash building energy demand by 18%
Researchers at the DOE's Pacific Northwest National Laboratory conclude that significant energy savings can be achieved by varying ventilation levels based on the number of people in a given space.
| Jun 18, 2013
Turner report: Activity in urban markets driving construction cost increases
Turner Construction Company announced that the Second Quarter 2013 Turner Building Cost Index – which measures costs in the non-residential building construction market in the United States – has increased to a value of 859. This reflects a 1.18% increase from the First Quarter 2013 and 4.00% yearly increase from the Second Quarter 2012.
| Jun 17, 2013
First look: Austin to get first high-rise since 2003
Developer Cousins Properties broke ground on the 29-story Colorado Tower in downtown Austin, Texas, the city's first high-rise building since Cousins' completed the Frost Bank Tower a decade ago.
| Jun 17, 2013
DOE launches database on energy performance of 60,000 buildings
The Energy Department today launched a new Buildings Performance Database, the largest free, publicly available database of residential and commercial building energy performance information.
| Jun 14, 2013
First look: Callebaut's eye-popping Möbius building for Taichung arts center
French design firm Vincent Callebaut Architectures has released renderings of "Swallow's Nest," an entry in a design competition for a new cultural center, fine arts museum, and public library in Taichung City, Taiwan. The building, based on a Möbius ring, swirls around a central "Endless Patio."
| Jun 14, 2013
Purdue, industry partners test light steel framing for seismic safety
A partnership of leading earthquake engineering researchers from top U.S. and Canadian universities and design professionals from the steel industry have begun the final phase of a three-year project to increase the seismic safety of buildings that use lightweight cold-formed steel for their primary beams and columns.
| Jun 13, 2013
WorkingBuildings acquires Specialty Operations Solutions
The WorkingBuildings Companies, a leading provider of comprehensive Owner-based solutions for the built environment, announces the acquisition of Specialty Operations Solutions (SOS), a national provider of research and laboratory services.
| Jun 13, 2013
Health Product Declaration Collaborative names Knott as Executive Director
John L. Knott Jr. has been named as the Health Product Declaration Collaborative’s (www.hpdcollaborative.org) first Executive Director following a national search. The Health Product Declaration Collaborative (HPDC) is a customer-led standards-setting organization committed to the continuous improvement of the building industry’s environmental and health performance, through transparency and innovation in the building product supply chain.
| Jun 13, 2013
AIA partners with industry groups to launch $30,000 'Designing Recovery' design competition
The program will award a total of $30,000 to three winning designs, divided equally between three locations: Joplin, Mo., New Orleans, and New York.
| Jun 12, 2013
More than 90% of New York City schools have code violations
More than 90% of New York City schools have at least one outstanding building code violation. Loose wires, stuck doors and inadequate ventilation are just some of the problems.
