Climate disasters reshape risk landscape for demolition contractors

This article was produced in partnership with Amwins.

Gia Snape of Insurance Business sat down with Mark Coy, program manager for demolition contractors at Amwins Program Underwriters, to discuss how the increasing frequency and severity of natural disasters are ramping up risks for demolition contractors, and how retail brokers supporting this sector can help close coverage gaps.

In 2024, the United States experienced a staggering 27 confirmed weather and climate disaster events that inflicted over $1 billion in damages. One of the most devastating,  Hurricane Helene, caused a staggering $78.8 billion in losses, according to NOAA’s National Centers for Environmental Information.

As the frequency and intensity of these disasters escalate, one group of professionals is repeatedly thrust onto the front lines: demolition contractors.

These specialists are often among the first to respond in the wake of a disaster, charged with the high-stakes task of dismantling damaged structures ranging from single-family homes to large commercial facilities.

Yet as the risk landscape around them evolves, so must the insurance ecosystem that helps protect them. Brokers and managing general agents (MGAs) supporting this sector must develop flexible, specialized coverage that adapts to the growing scale, complexity, and volatility of post-disaster demolition work.

“For demolition contractors, these weather events have certainly increased the amount of work,” said Mark Coy, program manager for demolition contractors at Amwins Program Underwriters. “But more importantly, the nature and scale of this work demand a careful and cautionary approach.”

Post-catastrophe environments pose new hazards for demolition contractors

In the wake of a natural disaster, the urgency to rebuild communities is palpable. In these environments, contractors may find themselves managing the safe demolition of hundreds of structures within a compressed time frame.

“There’s pressure to work quickly (because) people want to return to their lives, but that urgency must be balanced with strict adherence to safety standards, particularly those set by OSHA (Occupational Safety and Health Administration),” Coy said.

This also means that standard insurance coverage might not be enough. One critical coverage blind spot: mold exposure. Coy explained: “Mold can develop quickly in water-damaged buildings, and many demo contractors either lack pollution coverage or don’t have mold-specific endorsements. This can lead to workers’ comp claims and damaged equipment, potentially shutting down operations.”

Another key vulnerability is fire risk, especially during interior demolition using torches or saws. Contractors must have the tools and training to extinguish fires quickly, and carriers need to be prepared for related claims.

Coy also urged demo contractors to think beyond the job site: “Protecting their own facilities and equipment is essential. That means fire suppression systems, trimmed vegetation, and vehicle evacuation plans, especially in disaster-prone states like Florida and California.”

On the ground: what contractors face post-disaster

Coy emphasized that a strategic, safety-first mindset is essential when working in a post-disaster zone. He shared four risk management considerations for demo contractors evaluating a work site:

1. Structural integrity – After any catastrophic event, buildings can be deceptive. A thorough assessment of each structure is non-negotiable. “It may look safe but (a structure) could collapse during demolition, endangering workers and equipment,” Coy said.
    
2. Operational planning – Creating and adhering to a site-specific demolition plan helps to ensure orderly execution and minimizes risks. “Checklists and clear processes are crucial, not just post-disaster but for all demolition work,” Coy said.
    
3. Fire and chemical safety – Many buildings contain chemicals that become dangerous when disturbed. Additionally, residual embers or sparks from demolition tools can reignite fires, particularly in charred structures.
    
4. Utility shutdowns – Electricity, gas, and propane lines must be verified as shut off before any demolition begins. Overlooking this step can lead to catastrophic injury or further property damage, Coy warned.

Insurance considerations for demolition contractors engaging in disaster relief work

General liability coverage remains foundational for these frontline responders, even in a post-disaster environment. “It’s all about scale,” Coy said. “Whether a contractor is demolishing one building or fifty, the (underwriting) protocols and risks are largely the same.”

However, in commercial auto coverage, physical damage rates are rising in disaster-prone areas due to increased losses, leading to premium increases from carriers.

To stay ahead, broker partners must guide their clients toward coverage enhancements and forward-looking policies. Coy recommended adding contractors’ pollution liability (CPL) and considering higher excess liability limits, sometimes reaching $25 million or more.

Retail insurance brokers are often the first line of support for demolition contractors, but only if they understand the unique dynamics of catastrophe work. For Coy, that means urging clients to act before disaster hits.

For its part, Amwins often uses proprietary, carrier-specific forms instead of ISO standard policies. These forms offer broader protections and include key endorsements like additional insured and primary non-contributory clauses.

“Retailers unfamiliar with these forms sometimes hesitate,” Coy said. “That’s where Amwins can step in to help educate them, ensure compliance with GC requirements, and streamline the process.”