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Economic uncertainty continues to be a dominant issue for the construction industry. There has been little growth in employment, and government funding for projects continues to waver.
The period of transition is continuing in the primary casualty insurance markets regarding rates and coverage terms and conditions. Insurers are seeking increases from 5 percent to 15 percent. Risks with high loss ratios typically are experiencing higher increases and non-renewal notices. In the first quarter of 2012 marketing the account generally was successful in lowering rates compared to the incumbent’s offering; however, that stopped being the case in the second quarter. With the competition less aggressive, more incumbents are keeping the business.
Insurers remain strict regarding additional insured wording as they try to limit the coverage afforded to the contract requirements. This includes coverages being excess to the additional insureds unless the contract requires coverage to be primary. Another example is that contracts have to be “executed” prior to a loss. Fewer carriers are willing to use the standard Insurance Services Offices (ISO) additional insured endorsements.
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