Top Market News of 2013: Construction

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by Amy O'Connor

Insurance experts have had to be flexible and creative with the construction class since the bottom fell out of the housing market six years ago. From flexible payment options to a “pay-as-you-go” program to expanded forms, insurers did what they could to help this segment get through the tough times. But the construction segment came back in a big way in 2013; and with it came many new coverages and programs.

While experts agree that the market still isn’t what it was before the recession, there is still plenty of optimism, which certainly wasn’t the case a few years ago.

“Generally speaking the construction market is healthy,” said Mary Ann Krautheim, senior vice president and unit manager at Lockton Cos., in Kansas City, Mo.

Experts also say those construction firms that did survive are better risks to insure than they once were, and insurers are now focused on rebuilding their construction books and writing more of the good business. For some, that means investing in its insureds to help those that did survive get back on their feet.

Annemarie Elder, chief underwriting officer for XL’s Inland Marine division, says many contractors have put equipment maintenance on the back burner to save money, so expensive equipment hasn’t been properly serviced for years and may need repairs. The carrier is looking to address this through coverage and onsite inspections.

“Maintenance is expensive and contractors have cut down on their maintenance budget. For some of the larger equipment loss control is going to be critical, so we are going out and looking at the condition equipment is in,” she said.

Insurers were busy in 2013 getting ready for what they expect to be a busy 2014 for this class. Other construction market news that came out of 2013 includes:

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