The slowing of single-family and multifamily home sales has builders and developers scratching their heads on how to profit in this market cycle. To everyone's surprise, a very unlikely ally has surfaced to help these projects pencil out.
Over the last few months, the small community of insurance carriers with an appetite for construction defect general liability insurance has lowered their minimum premiums, reduced rates and allowed more flexibility in the coverage forms within their policies. "We are seeing some quotes from the insurance companies that are half of what they would have been a year ago," said Barry Nordstrom, president of Continental Commercial Insurance Brokers Inc. "One insurance company has told us that will beat any reasonable quote on the table. In their words, they won't be beat on price for similar coverage."
A rarity in this industry, there is now even a California Department of Insurance admitted carrier writing construction general liability insurance. "Our clients feel more comfortable with admitted paper when the insurance company may have to pay a claim as far out as 13 years from the day they purchase the policy," said Nordstrom, whose firm has an exclusive appointment with this carrier. The combination of lower premiums and better coverage forms has afforded some developers the ability to build a project they may have skipped just a few months ago.
Another positive trend is the insurance company's willingness to include design professionals such as architects and engineers within the policy. "Some carriers have realized these service firms need to be covered and are not charging additional premium to name them on the policy," said Nordstrom. "All the way around, it's a better time to shop for your insurance".
Continental Commercial Insurance Brokers Inc. has offices in San Diego and Las Vegas and specializes in residential construction insurance and risk management. For more information, contact them at 1-800-467-2222.
Submitted by Continental Commercial Insurance Brokers Inc.