Contractors, along with their insurers and brokers, are coping with big challenges in two of the nation's largest and most active construction markets--California and New York--which have traditionally been "very difficult, [but] for very different reasons," one leading insurer contends.

California is the more complicated of the two, with a number of factors contributing to problems there, according to Richard Aldorisio, vice president in charge of primary casualty at Investors Underwriting Managers, a Red Bank, N.J.-based subsidiary of Markel Corp.

First, there was the state Supreme Court's decision in the case of Montrose Chemical Corp. vs. Admiral Insurance in 1995, which greatly increased the liability faced by contractors--a problem that is only compounded by what Mr. Aldorisio called the state's "active" plaintiffs' bar.

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