general liability round-up
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GENERAL LIABILITY ROUND-UP
Beverly Hill, Balfour Beatty Construction
Janet Kerr, Boston Properties
David DeLaRue, Willis Construction
September 16, 2014
Locating the herd?
General Liability Round-up | 2
OCIPintroduced to construction
1940 1995
Owners begin looking at using
CIPs for Residential Risk
1998
Standard market begins
restricting coverage for
home builders
Excess & Surplus Lines
senses an opportunity and begins writing Residential GL
Only CIPs
Contractors begin using WC/GL CIPs
Workers compensation rates begin to soften putting pressure on WC/GL CIPs
2000 2008
Residential GL only Expands as
construction explodes
Residential Market Slows. E&S looks to commercial
market
2010
Contractor CIPs gain momentum and owners see
more CCIP offerings
Contractors hate the CIP and anyone who
supports them.
Rolling GL Only CIPs appear
and contractors are using CCIPs more on projects
of all sizes.
GL Only on commercial
projects becomes more
competitive
2012 to Present
Owners begin to consider GL Only CIPs on larger commercial
projects.
Conventional Owner CIP1940 to Present
Contractor CIP1998 to Present
Diverging & Converging Interests
General Liability Round-up | 3
• Cost management• Claim Defense• Improved Coverage• Successful Project
General Contractor
• Contractor Risk – Contractor Coverage
• Practice Policy Integration• Subcontractor Exposure• Owner relationship• Owner CIP limitations• Coverage• Condo Conversion
Owner
• Contingent or vicarious liability (Named insured?)
• Lender requirements• General contractor relationship• CCIP Transparency• Coverage
WC/GL vs. GL Only – Decision Drivers
General Liability Round-up | 4
WC/GL CIP GL Only CIP Admitted Carriers
Deductible
Minimum Retention usually begins at $250K
Collateral requirements
Better control over workers’ compensation (WC) claims.
Reduces exposure for WC subrogation
Carrier safety resources
Standard ISO forms with wrap-up modifications
Reliance on broker administrator – Carriers will consider broker experience in underwriting
Limited appetite for residential risk
Project size limitations
Multiple ownership interests complicates the placement
Excess & Surplus (E&S) Lines
Deductible or Self-Insured Retention*
Low retention - $25K
No collateral requirements
No control of workers’ compensation claims except through agreement
WC subrogation exposure
No safety services
Coverage form flexibility
Can mandate use of third party program administration in addition to broker
Market is open to residential risk
Greater flexibility on project size
Good solution for JVs or multiple ownership interests
GL Only Market Summary
General Liability Round-up | 5
Commercial Multi-Family (Apartments) Multi-Family (Condo)
Tier 1 Tier 1 Tier 1Gemini Gemini Houston Casualty
Westchester Westchester CatlinHouston Casualty Houston Casualty ARCH
Navigators Navigators NavigatorsARCH ARCHCatlin Catlin Tier 2
First MercuryTier 2 Tier 2 United Specialty
First Mercury First Mercury LexingtonLexington Lexington Lloyds of LondonIronshore Ironshore
United Specialty United Specialty
** Leading markets may vary depending upon geographical region
Ma
rke
t L
ea
de
rs*
* Leading the market in terms of pricing and coverage.
GL Market Summary
General Liability Round-Up | 6
Commercial Multi-Family (Apartments) Multi-Family (Condo)
- ISO CGL Form - ISO CGL Form - ISO CGL Form- ALAE Outside Limits - ALAE Outside Limits - ALAE INSIDE Limit- Exclusion J, K, & L Modified - Exclusion J, K, & L Modified - Exclusion K & L Modified- Damage to Project Excl. - Damage to Project Exclusion - Damage to Project Exclusion- Condo/Resi Exclusion - Condo/Resi Exclusion- Environmental Exclusions - Environmental Exclusions - Environmental Exclusions- Limited Professional CG 22 79 - Limited Professional CG 22 79 - Limited Professional CG 22 79- Extended Completed Ops - Extended Completed Ops - Extended Completed Ops- EIFS Coverage* - EIFS Coverage* - EIFS Coverage*
- Cross Suits Exclusion With Exception- Close of Escrow PCO Trigger Limited
Other Notes Other Notes Other Notes- No Frame Construction - Some Frame Limitation - Some Frame Limitation- No NY Wrap Coverage - No NY Wrap Coverage - No NY Wrap Coverage- Deductible Programs - Deductible Programs - Deductible/SIR Programs
- Third Party QA/QC Inspection Required
Co
vera
ge
No
tes
* EIFS process subject to underwriting. Market and coverage options further limited on wood frame construction projects.
Industry Trend to GL Only? Workers compensation rates continue to pressure WC/GL OCIP financials
Retail underwriters have limited interest but that may change
Continued erosion of contractual protections will drive many to project insurance
Continued erosion of subcontractor
Lenders are becoming more aware and drive projects into a CIP
Project delivery methods will rely on more CIP solutions (IPD & P3)
Owners will continue to explore GL only
Contractors continue to rely heavily on WC/GL CIP but use GL only on select projects
General Liability Round-up | 7
Recent GL Only Project Examples
General Liability Round-up | 8
Cameron LNG Plant - $5Bn LNG Project in Louisiana DeKalb County – Rolling OCIP
Minnesota Vikings - $750M Stadium Project MGM National Harbor Hotel & Casino - $800M Hotel Casino
Questions & Answers
General Liability Round-up | 9
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