U.S. construction firms on average paid more for their insurance in the first half of 2013 as underwriters continue to seek price increases across the breadth of their contractor portfolios, according to a report published by Marsh.
Pricing for contractors general liability, project-specific general liability, umbrella and excess liability, workers' compensation and residential construction insurance was up between 3% and 7% on average during the first half of the year, according to Marsh's Construction Market Update—First Half 2013.
Construction firms with poor loss histories were more likely in general to have seen double-digit rate increases.
Pricing for non-residential construction and professional liability insurance for contractors, architects and engineers also was up on average during the first half of the year, but to a lesser degree.
“U.S. construction firms are grappling with a firming insurance market, especially when it comes to liability insurance where underwriters continue to tighten coverage terms and seek rate increases to make up for reduced investment income,” says Michael Anderson, leader of Marsh's U.S. Construction Practice.“With a zero interest rate environment, there is no cushion against a poor underwriting decision.”
According to Marsh, not all construction lines are experiencing rate increases. Premium rates for builders risk insurance generally remained flat during the first half of the year despite more demand for coverage. Similarly, contractors pollution liability rates remained generally flat to down 5%.
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