From the Front Lines: Builders Risk

How did you get started at your agency?

I started out as the personal lines account manager in 1989 and moved to the commercial lines department in 1995.

Why builders risk?

The area was experiencing a big boom in residential and commercial construction. There were very few insurance companies offering it and we contracted with Zurich in order to provide builders risk products to the construction industry.

Biggest changes you’ve seen in builders risk?

Competition! It used to be that there were only two or three carriers offering builders risk. Now the market has opened up, and several other carriers are players in this field. Also, the forms are better—you are no longer just insuring for the building. You are able to provide coverage for soft costs, loan rate changes and builders profit.

Biggest builders risk challenges?

Knowing what you’re insuring. Builders risk is not only for construction of houses and buildings. It now encompasses large municipals and includes covering risks that have large pieces of equipment to be installed, solar or wind fields, or even big landscape jobs that might take a period of time to complete. Knowing how to insure these types of risks sets you apart from other agencies and gives you the competitive edge you need to succeed.

What do you say to a first-time builders risk client?

Check the policy to make sure it’s covering you correctly. Some homeowners carriers will put a “builders risk” endorsement on the policy, which gives limited coverage. If they are renovating, it’s even more important to make sure the existing structure is covered as well as the cost of the renovations. You need to make sure that your building materials that are left on site are covered for theft.

Builders risk advice for a fellow agent?

Know your rates and coverage forms. Know which carriers are successful in residential and commercial builders risk. Join your local builders association and find out what their concerns are with the builders risk coverage.

Favorite builders risk success story?

I wrote a new homeowners policy with a carrier for a home that was only going to be cosmetically renovated. The carrier did an inspection and the house was GONE! I contacted the insured immediately to find out that the house had so much termite damage, they decided to demolish it and rebuild a new home. Needless to say, I sold them a builders risk policy that day!

Future of builders risk insurance?

I hope to see more competition in the marketplace and a bundling of this with a simple general liability or owner’s and contractor’s protective liability policy to cover the owner’s vicarious liability exposure.