Insurance Market Conditions Mostly Stable for Construction Companies
The insurance market for construction companies was generally stable in 2015 and it is expected to remain so in 2016, barring unforeseen conditions.
Among the key findings from our US Insurance Market Report 2016:
- Conditions were mostly favorable in 2015 and are expected to remain so in 2016 for general coverage for primary casualty, professional liability, and environmental insurance, barring unforeseen developments.
- New York-based casualty risks continue to be challenged by losses stemming from the state’s labor laws. Challenging environments also continued in Colorado, Florida, Washington, Nevada, and California.
- For project-specific policies, general liability wraps, builders risk, workers’ compensation, and environmental insurance market conditions were typically favorable for buyers.
- Project-specific architecture, engineering, and construction coverage remained costly in 2015, though competition from new market entrants may lower costs slightly in 2016.
Among the risk trends worth monitoring in 2016:
- Increased claim activity caused insurers to generally seek 5% rate increases for subcontractor default insurance in the fourth quarter of 2015.
- Claim resolution issues on coverage relating to the definition of occurrence may affect some organizations. Case law around the definition of occurrence is expected to continue to evolve throughout 2016, with potentially broad and more restrictive interpretations in many jurisdictions.
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