Thomas Varney, risk-consulting manager in the Americas for Allianz, agrees on seeing such suits over pipe leakage. Not so much an increase in claims, necessarily, he says, “but it is something I have seen an amount of claims on that could be just a simple turned-on-water plumbing problem: a sprinkler system with a mistake where a connection is not made or something isn't tightened where the water leakage occurred. It could be in an area that's not visible, and they may not know about it until it's too late.”

Typically those types of leaks, he says, occur because someone has not properly tightened or capped or completed a connection. “Then the water's turned on, and it can be in a back area not visible in the beginning,” Varney explains, or even on a higher floor that may have a significant amount of water.

For XL Group, a fairly new entrant in the Construction insurance market, Workers' Comp leads in Construction claim types and frequency, Rice says. Claims typically arise from strained backs from lifting or pulling materials on the site.

 “And there are a lot of those,” she says. “Unfortunately you've got some aging workers out there, and they may have a pre-existing condition and whatever they did made it worse.

“We expect ultimately with the alleged commercial projects down the road the biggest claims could be Construction Defect, but we don't see those yet because we're such a new player in the business,” Rice adds.

She is confident that the company's risk engineers will keep that in sight; still, she expects Construction Defect claims to typically be bigger than Workers' Comp because of the nature of the construction practice.

Rice also expects WC claims to be higher in costs than Construction Defect, depending on the jurisdiction. In construction, she points out, there are things that people can fall off of, like stools, ladders, and scaffolds.

“We haven't seen a ton of those,” she says, adding that XL is currently working with clients' safety programs to prevent accidents.

However, says Rice, “In the two years we've been actively writing we have, from my personal view, far less [Workers' Comp claims] than I would have expected. My assumption is that the underwriters are doing their due diligence and really choosing the right partners to write policies for because of their safety practices and loss history in conjunction with your risk engineers, who are out there providing training for them. So I think it's a combination of both.

“Safety, obviously, is extremely important,” she adds. The construction industry at large, which endures federal oversight by the Occupational Safety and Health Administration, tends to be highly involved with internal safety programs. Still, “We work with the ones that don't just talk the talk, but walk the walk.”

Those partnerships tend to be with the construction contractors and subcontractors that employ the best safety practices, guidelines and criteria in all construction lines.

While the economy has seen fewer homes built in the last several years, so far XL hasn't seen a reduction on the residential side in litigation, “likely because they're suing sooner,” adds Rice.

In California for example, there's a 10-year statute for a residential homeowner to file suit over a construction claim. “The average time for a client to file used to be within six or seven years,” says Rice. “Now it's three, four, five years. We're seeing them come in a little sooner because of the [ailing] economy.”