Rates up for much of U.S. construction industry in first half of year: Marsh

Construction firms in the United States paid, on average, more for their insurance in the first half of the year, according to a new report from Marsh.

 Renewal rates for contractors general liability, project-specific general liability, umbrella and excess liability, workers’ compensation, and residential construction insurance was up between 3% and 7% on average during the first six months, the report says.

Those firms with poor loss histories were also more likely to have seen double-digit rate increases, the report suggests.

Pricing was also up to a lesser degree for non-residential constructions and contractors and architects and engineers professional liability insurance.

“U.S. construction firms are grappling with a firming insurance market, especially when it comes to liability insurance where underwriters continue to tighten coverage terms and seek rate increases to make up for reduced investment income,” Michael Anderson, leader of Marsh’s U.S. Construction Practice commented in a statement.

“With a zero interest rate environment, there is no cushion against a poor underwriting decision.”

Some areas, however, haven’t seen increases, including builders risk insurance, which generally remained flat during the first half of the year, despite increased demand for coverage, Marsh says.

Contractors pollution liability rates also remained generally flat to down 5%, according to the report.

“While underwriters are attempting to gain rate increases, the market is awash in capital and new entrants are helping to maintain competition,” Anderson said. “The good news for well-managed construction firms is they can still generally find competitive pricing and terms.”