The construction industry has seen a huge boon in recent years, working hand-in-hand with a growing economy. The industry is seeing growth in nearly every aspect including non-residential commercial construction, employment and manufacturing. Even the public sector portion of construction is looking at a small increase from last year, according to Associated Builders and Contractors.
Cities like Portland, Phoenix, Houston and Atlanta are seeing exponential population growth and a steady rise in job opportunities, thus giving way to more opportunities for construction companies to dig in and build up. However, this great news can also open the door to potential risks and lawsuits. The dependence of construction liability insurance should be in lockstep with the rapid growth of the industry it serves.
More Projects, More Lawsuits
Starting a new construction project is exciting and busy, full of potential and full of liabilities. New projects offer construction companies the opportunity to grow their business, generate income and work with skilled laborers and contractors to work to a common goal. But new work could also bring disputes over construction defects, depending on how the project unfolds.
There is never enough preparation behind being ready to work with a difficult client who changes plans during a project multiple times and then turns the blame around on you, the construction business owner, for failing to meet expectations. Even if your company has insurance in place, it’s still good to have adequate coverage from a risk-management perspective.
Changes for CIPs
Controlled insurance programs (CIP) may see coverage gaps as projects continue to grow. General contractors or project owners sometime sponsor these programs to ensure all subcontractors have a general liability policy in place as well as workers’ comp during a project. Make sure to review the policy’s coverage and its limits, such as making sure your insurance program covers all contractors who work on the project.
Additional insureds may get less coverage than they used to in comparison. This kind of workers is someone who is added to your company’s insurance policy to cover the temporary work they do on behalf of your business. This label gives them some sort of coverage under a built-in policy, but not as much as an owner has. New forms for additional insureds put limits on coverage so that it only covers instances that the underlying policy covers and no more.
Stricter Indemnity Laws
These new laws could leave contractors exposed and vulnerable to claims. Indemnity clauses in contracts give a construction owner protection against financial burdens. States are now narrowing the scope of indemnity that construction professionals can utilize in contracts. The goal for these new laws are to protect the public from less-than-great construction work, but could also leave construction businesses and their contractors exposed to lawsuits.
Regardless of the trends in the construction insurance market, the changes are complicated to sift through. Having a dedicated insurance professional who understands the construction industry on-hand is a valuable asset to any company. Make sure to have your policy updated and stay up to date on changes in the industry.
About Shields Insurance Agency
Shields Insurance Agency is an independent insurance agency located in Birmingham, Alabama that provides insurance coverage to local businesses and families throughout the southeastern United States. As an independent agency, we will shop your coverage with numerous top-rated insurers, virtually guaranteeing you get the most competitive rates available with broad coverage terms. For more information on our products and services, contact us today at (205) – 783-5893 to speak with one of our professionals.Posted on