General Liability Increase Expected for Construction Firms

Contractor insurance

A report by Marsh states that the U.S. construction industry should expect rate increases of up to 15% in the commercial General Liability market, due to years of soft market conditions. “This comes against the backdrop of medical cost inflation and changes to some state statutes that have extended coverage beyond the insurer’s originally intended scope,” said Leader of Marsh’s U.S. Construction Practice, Michael Anderson.

Marsh’s August 2012 U.S. Construction Practice also reports that insurance carriers continue to raise rates between 8 and 10 percent on Umbrella and Excess Liability policies.

As underwriters are making the liability market more challenging for the construction firms by continuing to increase rates and restrict coverages; construction firms with poor loss histories are experiencing an even greater rate increase and some are even unable to renew their policies.

Rates have increased for Workers’ Compensation as well in many states as underwriters struggle with continually increasing medical costs. Future changes in NCCI experience modification calculations could possibly have a negative impact for some in the construction industry in the upcoming year.

According to John Sadler of Sadler & Company, Inc., “We are not yet seeing these Contractor General Liability increases for our book of builder & remodeler business.”

Source: My New Markets
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