With your specialty in construction insurance, what types of coverage do general contractors need to carry?
The insurance requirements on a job site are handed down by the owner or general contractor. They will bring different insurance requirements to the table. The general contractor is going to carry the same coverages he requires the subs to carry, because ultimately he’s the last resort and responsible for everything that happens on a job site. The standards are general liability, auto liability, workers’ compensation, property, inland marine and umbrella.
What other coverages might you want to have?
An exclusion that is on every policy for a subcontractor is a “your work exclusion.” Insurance companies will provide coverage for bodily injury and property damage arising out of someone’s work, but they will not cover bad work. A general contractor is going to want to make sure they do not have a “your work exclusion” on their policy because, again, they are the last resort.
How many carriers do you work with and is that number growing or shrinking?
We have over 20 carriers we have access to but can probably whittle it down to 10 that are strong in the construction field. It’s steady. We don’t have the volatility that the health insurance markets have – never have, really.
What carriers have the bulk of coverage in this market?
For construction, we have five or six very strong ones – United Fire & Casualty, Employers Mutual Co., Bituminous Insurance, Secura Insurance. On the work-comp side, Employers Mutual is still very strong. A lot of them can come down to the type of contractor you’re looking at.
What’s looming nationally that you’re watching?
Insurance rates, right now, are flat, except for the auto. Distracted driving is going to affect every segment of auto insurance, whether it’s personal or business. Texting, talking on the phone – that distracted driving is just killing the insurance companies’ loss ratios. If you talk to a trucking risk out there, they are seeing it first. Almost every loss-control recommendation we have coming from insurance companies is requiring a cellphone use policy, most at a minimum hands-free and definitely no texting.
Regarding the auto premiums, we are hearing and seeing a 7-10 percent increase. The rates are increasing because of the claims. This is all claims driven, and distracted driving is just getting worse.
With your seat on the Springfield Contractors Association board, what’s the latest SCA construction forecast?
We didn’t have a formal presentation this year because everyone was so busy that capacity, in general, is an issue. It was harder to get the information – everyone is busy. That directly points to the fact it’s strong. I insure architects, engineers, contractors, subcontractors – I have people in almost every segment of our association. Everyone is doing a lot better, beginning to get their rate back. It’s been a long, slow haul for subcontractors to get the margins they used to get before the downturn. Also, it seems as though engineers and architects are very busy. If they’re busy now, we’re going to be very busy for a period of time going forward.
Mark Gambon can be reached at email@example.com.
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