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Every construction project presents a host of potential risks that need to be addressed. Although it’s no guarantee that you can eliminate all of them; you can help manage them and de-risk your business. The best way to eliminate as much risk as possible is to have a Risk Management plan. Risk Management is the practice of identifying & analyzing loss exposures and taking steps to minimize the financial impact of the risks they impose.
Topics: Surety Bonding, Safety, Construction Risk Management, Construction Insurance
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It’s evident that the cost of an insurance program rarely goes down. Unfortunately, being in a Hard Market, we’ve seen insurance coverage rates increase across the board. Brokers started observing this trend back in May of 2019, when Excess Insurance prices were spiking regardless of claims activities.
Topics: Construction Risk Management, Hard Market
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As we begin 2021, we reflect on everything that happened this past year - from a global pandemic to civil unrest to natural catastrophes. Through all of that, we find the primary issue that impacts the P&C insurance marketplace in 2021 is uncertainty.
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The insurance marketplace moves in cycles as the pendulum swings back and forth between low demand and high supply—known as a “soft” market—to high demand and lower supply—known as a “hard” market.
For many years, the excess insurance marketplace was considered “soft,” meaning it was in a growth mode; insureds had access to high limits, low rates, advantageous policy terms, and many participating carriers. The third quarter of 2019 marked a shift in the excess marketplace, as carriers began to retreat, and capacity reduced significantly; carriers reevaluated the profitability of their deployed limits due to deteriorating losses.
Topics: Construction Risk Management
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When an Insurance Company is looking to write a policy to cover an Insured (i.e. Owner, General Contractor, or Trade Contractor, etc.), they are looking at how much exposure they are opening their company up to. Simply put, the Insurance Company is looking to see how much risk the Insured’s line of business/trade has.
Insurance companies use exposure as the basic unit to help determine the rates for each specific class of business. These are the four different ways that insurers can utilize the exposures.
Topics: Construction Risk Management
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Owners, General Contractors, Developers, and even Trade Contractors take on a certain amount of risk when hiring any contractor, regardless of the business type. These risks typically include Liability Risk, Work Quality or Completion, Contractor Default, Bankruptcy, Insolvency and even the ceasing of operations. These are only a few that must be considered when hiring a contractor.
Topics: Construction Risk Management
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Did you know the construction contract you signed contained a clause that transferred any risk from the project owner or general contractor to your company? Such clauses are common in executed contracts. Their purpose is to transfer any risks on a construction project from one party (transferor) to another (transferee) in order to eliminate the transferor’s exposure to risk. This legal practice is known as contractual risk transfer.
Topics: Contractual Risk Transfer, Construction Risk Management
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Safety management in a construction project should be second nature, but sometimes contractors may neglect important safety practices. When a construction project involves high risk and potential hazards, it’s imperative to review safety measures with workers and assess the dangers at the work site. Here are some useful safety practices you can follow to make your job site safer.
Topics: Safety, Construction Risk Management
