Fewer insurance carriers are willing to extend endorsements to additional insureds on construction contracts, according to Marsh’s Annual US Insurance Market Report. This continues the trend of insurance companies remaining strict about “additional insured wording as they try to limit coverage afforded to the additional insureds on the contract requirements.” Very often, insurers are negotiating on a case-by-case basis and adding on additional premiums.
Throughout 2012, commercial general liability rates continued their upward trends as insurers scrambled to adjust for increased settlement amounts, more claims and the effects of natural disasters. For 2013, Marsh predicts general liability will be competitive in all states and will include enhanced coverage with abundant capacity. Apartment project GL wrap premiums matched condo premiums in 2012 and will continue to do so throughout 2013, and while the market for GL wraps practically disappeared in New York, they remain a necessity in Texas and New Mexico due to indemnification statute limitations.
Builders with frequent or severe workers’ compensation losses can expect significant increases in insurance costs during 2013, while those with good quality risks should see stable costs. Meanwhile, builders risk premiums may be in for adjustment in July 2013 as the damages from Hurricane Sandy are more fully realized. Professional liability insurance is predicted to increase on average about 5% through the end of 2013 with those having significant losses seeing higher rates when renewing. Finally, the environmental liability market is expected to remain competitive and Marsh expects contractors will be using more pollution liability on their own projects and multiple carriers on “mega-projects.”
You can visit this web page at Marsh’s where you can register to download the entire report.