Many construction businesses will be paying more for Liability coverage, as insurance companies are raising rates to make up for years of low premiums (during the so-called “soft market”). That’s the conclusion of a recent report by the U.S. Construction Practice of Marsh, the world’s largest insurance broker.
Other factors driving these increases include skyrocketing inflation of medical costs and new laws in some states expanding the coverage requirements for Liability insurance.
The Commercial General Liability (CGL) market for construction firms continues to harden, with rate increases of up to 15%. Businesses with poor loss histories are experiencing even larger hikes, and (in some cases) will not have their policies renewed. Insurance companies are also raising renewal rates by 8% to 10% on Umbrella and Excess Liability coverage.
The report found that Workers Compensation rates are rising as underwriters grapple with flat premiums and escalating medical costs. Upcoming changes to the National Council on Compensation Insurance “experience modification” calculations – which help set rates – could drive up premiums significantly.
On the other hand, Construction Insurance experts expect little change in rates for such coverages as Project-Specific General Liability, General Liability Wraps, Controlled Insurance Programs (CIPs), Builders’ Risk, Environmental Insurance, and Contractors Professional Liability.
The good news, says Michael Anderson, Leader of Marsh’s U.S. Construction Practice: “Construction firms that proactively distinguish their risk profiles from their peers are best positioned to secure more favorable terms, conditions, and pricing from underwriters.”
As professional insurance agents, we can advise you on navigating this challenging environment to obtain comprehensive, cost effective Liability coverage that can help protect your business. Just give us a call.