Construction Risks and Challenges - IRUA
Transcript of Construction Risks and Challenges - IRUA
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CONSTRUCTION RISKS AND
CHALLENGESOverview
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Discussion Topics
Policy TypesRisksChallengesUnderwriting Trends
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General Liability Policy Types
Practice Policy
Project Policy
Controlled Insurance Program – OCIP or CCIP A/K/A Wrap Up
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Practice Policy
■ Annual Insurance
■ Cost Variability
■ Cross Litigation
■ Uninsured and Underinsured Contractors
■ Multiple Contract Types
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Project Policy
■ Duplication of Cost
■ Cross Litigation
■ Gaps in Coverage
■ Dedicated Limits
■ Uninsured/Underinsured Contractors
WC
GL
BR
WC
GL
WC
GL
BR
WC
GL
BR
WC
GL
BR
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Controlled Insurance Program
■
■ One Program■ Control■ Consistent Coverage■ Dedicated Limits■ No Cross Litigation■ Consistent Services■ Decreased Markups
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Construction Risks
3rd Party Bodily Injury 3rd Party Property Damage Worker Bodily Injury – WC or NYLL? Completed Operations/Construction Defect
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Construction Risk Photos are Fun
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Never Do This
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Construction Challenges Effective Risk Transfer –
Liability Where it Belongs
Additional Insured Coverages
Inconsistent Coverages
Owner and GC requirements
Risk Management Responsibilities
Contractual Requirements
Certs and Cert Checking
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The Risk Management Responsibility Insured
Contracted 3rd Party
Insurance Broker
All of the Above
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Construction Defects - Ancient
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Construction Defects - Today
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Contractor Disputes Can Be Costly
It’s Best to Address Potential Conflicts as Early as Possible.
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Underwriting Resources■ Signed Application
■ Supplemental Application
■ 7–10 Years of Currently Valued Loss Reports
■ Copies of Subcontracts
■ Copy of Safety Manuals
■ Financial Statements
■ Work on Hand Listing
■ Workers Compensation Policy
■ Workers Compensation Loss Reports
■ Evaluate Current and Prior Coverage
■ Inspections
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Claims Handling can Make or Break Profitability
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Claims Handling■ Underwriting is Critical, Claims Handling Influences Profitability
■ Specialized, Experienced Claim Staff
■ Strong Network of Panel Counsel
■ Reasonable Case Loads
■ Claims and Underwriting Interaction
■ Claims Reporting and Documentation
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Trends■ Industry Losses Continue to Develop
■ Carrier Appetite for NY Construction is Evolving
■ Rates are Increasing
■ First Layer Excess Pricing is Sharply Increasing
■ Workforce Shortage
■ Increased Usage of Non-Union Contractors
■ Future Economic Slow Down?
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Final Thoughts and Questions■ Underwriting Construction Risks is Quite Challenging
■ Multi Faceted Underwriting and Claim Approach
■ Construction Insurance is Dynamic
■ Questions?