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Nail down construction business with extra coverage

The construction industry is facing tough times as land remains undeveloped and unfinished buildings and homes dot the national landscape. The excess and surplus lines market, which has been home to the

By Ken Rice | Updated on October 06, 2008
The construction industry is facing tough times as land remains undeveloped and unfinished buildings and homes dot the national landscape. (Photo: iStock)

The construction industry is facing tough times as land remains undeveloped and unfinished buildings and homes dot the national landscape. The excess and surplus lines market, which has been home to the construction contracting industry for many years, has recently seen an exodus of business back to the standard market as carriers strive for more rate-adequate risks.

This year, both the standard and surplus lines sides of the industry will devour what little is left of the policyholder’s rate adequacy by reducing contractor premiums. In addition, homeowners are realizing that it’s more cost effective to remodel or refurbish than it is to build new, particularly with the current economy. Most general contractors are adjusting by shifting their primary business function to remodeling, rehabilitation and HVAC contracting.

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