How to succeed in the construction marketplace

Ask the right questions, spend extra time combing through complicated policies, and be well versed in state and federal regulations, brokers advise.

By Samantha Wright

There can be millions of dollars at stake in the construction sector if you don’t get things right.

Bryant Steele, a broker focusing on the excess and surplus insurance market in Burns & Wilcox’s construction practice, recommends taking extra time to comb through complicated policies to make sure that insureds are adequately covered.

“The last thing you want to do is open up your client to a loss where they thought they were covered for something, and it turns out they were not,” he said.

Risk management is just as important as proper underwriting.

“Depending on the size of the project, the contractor or owner might not have full-time risk management,” Steele said. “So you really have to put your risk manager hat on for your clients. Don’t be afraid to utilize the resources of an expert wholesaler,” he added.

It is also important to be well-versed in the state and federal regulations pertaining to the construction industry; the statute of limitations for construction litigation in some states is 10 years or longer, noted Ben Beauvais, Executive Vice President of Casualty & Construction at Ironshore.

A lot of times, getting a tricky account underwritten by a potentially reluctant carrier comes down to “asking the right questions and really getting a breakdown of what the insured’s exposure consists of,” reflected Brian Harrold, a construction risk insurance specialist at Norman-Spencer.

For example, he said, “If your client is a steel erection/fabrication company whose gross sales are $5 million, but only $1 million of their $5 million in sales are derived from steel erection work, which is considered the higher hazard exposure of the two, the fact that $4 million of the insured’s sales are derived from steel fabrication work will allow you to negotiate a much more competitive premium for your insured.”

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