Insurance Premiums Skyrocketing For Construction Firms
Members of the Associated General Contractors of America learned at its recent midyear meeting in Salt Lake City that the premiums for property and casualty insurance are rising faster than many expected.
According to Willis, a prominent national broker of construction insurance, the market began to harden well before the tragic events of Sept. 11, and contractors who are not prepared risk an alarming increase in insurance costs when their current policies expire.
According to AGC's Risk Management Committee Chair Dan Fordice (Fordice Construction, Vicksburg, Miss.), "AGC members are encouraged to start talking to their brokers well before their current insurance policies expire. If your policies are up for renewal on Jan. 1, you needed to call your broker yesterday. There is little doubt that the terrorist attacks on Sept. 11 will only make the situation worse."
At the midyear meeting, it was also reported that, even before the tragic events of Sept. 11:
- Loss responsive workers compensation programs were seeing increases in fixed expenses of 25 to 30 percent;
- Many premiums for commercial general liability insurance had increased 20 to 30 percent and even more for companies with poor loss results;
- In some cases, premiums for automobile liability insurance had increased more than 100 percent;
- Since the beginning of the year, the rates for builders risk insurance were up more than 20 percent; and
- The rates for umbrella coverage were increasing in a range between 50 and 200 percent.
AGC of America is already planning to include an educational track on construction risk management in the program for AGC's upcoming convention, which will be in Las Vegas, Nev., on March 18-22, 2002, in conjunction with ConExpo.