“I love reading through my insurance policies!” — said almost no one ever. More often than not, companies correctly rely on their insurance broker to do so for them. However, if you ever experience a claim, you’ll want to be familiar with the workings of your policy.
It is vital to put in the time to assess exposures, limits, and deductibles to ensure your coverage will cover potential claims the construction industry is prone to. As a trusted partner, our job is to understand the exposures related to a specific trade and dig deeper to help address those of particular importance for our clients. No one knows your trade better than you, however, and working together we can ensure you are covered for just about anything.
Before you start the conversation with your broker, here are some tips on how to review your program and be better prepared to address any potential areas requiring further coverage:
1. Check the declarations page. The declarations page will show you a few important items such as the insured, effective dates, limits, deductibles, and premium information. If you notice anything incorrect, get in touch with your broker to correct it right away.
2. Review your exclusions. Exclusions are items that are NOT covered by your policy, unless they are specifically added back in by endorsement.
Exclusions in Action: A wet utilities contractor asked MMA to audit their current policy. We found that their general liability, professional, and pollution policies excluded waterborne pathogens. This posed an issue because if they worked on a sanitary pipeline for public park drinking fountains, waterborne pathogens could potentially come into play. We were able to address this by adding an exclusion endorsement and negotiating other enhancements that suited the clients’ needs. For a list of common insurance program pitfalls and exclusions to consider, download our “Insurance Checklist for the Construction Industry.”
3. Re-assess as needed. Evaluate limits, coverages, deductible options, and exposures to best fit the company operations. Construction companies work with many different external sources, so all contracts must be reviewed thoroughly for any project.
Exposures in Action: MMA was asked to audit a general contractor’s current insurance program. They were providing design work for a client and did not carry professional liability coverage. After assessing several contracts they had with external owners/developers, we found they were exposed to an errors and omissions claim if the design was found to be flawed MMA assessed the exposure, communicated it to the client and amended the policy to better cover the client in the event of a claims scenario.
We’ve compiled a cheat sheet of common insurance program pitfalls for the construction industry. To download the "Insurance Checklist for the Construction Industry" PDF, click here.
At Marsh & McLennan Agency, our Construction Practice is comprised of insurance experts whose sole focus is building customized risk management and employee benefit programs. With the superior market clout that comes from 100 years in business, we’re able to provide advisory services for a diverse client base that embraces contractors, engineers, lenders, property managers, and property developers.