SPECIAL REPORT
5-STAR CONSTRUCTION INSURERS
5-STAR CONSTRUCTION INSURERS:
A foundation of expertise CONSTRUCTION IS more than just the building of structures – it’s also a key indicator of a country’s economic trajectory. In early 2020, the relative stability of both the Canadian construction industry and the construction insurance sector, which covers tens of billions of dollars worth of projects each year through a complex litany of highly specialized insurance products, was a heartening sign. Then COVID-19 hit. “In Quebec, most construction sites were forced to stop in the early stages of confinements,” says Alain Giroux, a Quebecbased executive vice-president at HUB International who specializes in construction coverage across North America. “This
“By the end of 2020, it was the casualty rates, particularly excess rates, that accelerated their assent. This has continued into 2021” Alain Giroux, HUB International brought many questions concerning vacancy provisions and exclusions found in many policies. We also had to spend some time looking at possible policy provisions for business interruption coverage related to governmentsanctioned project closures.” Across the country, contractors worked
WHAT’S MOST IMPORTANT TO BROKERS WHEN CHOOSING A CONSTRUCTION INSURANCE POLICY? Service to brokers
96% 93%
Underwriting expertise
90%
Value for money
85%
Claims payment/processing speed
78%
Ability to create bespoke policies
76%
Access to risk mitigation partners Online platform
48
www.insurancebusiness.ca
59%
to align their operations with new laws regarding site security and physical distancing. Globally, the pandemic stifled supply chains. For example, HUB had a client who needed a transformer from Italy to complete a wind farm – but the entire country was in lockdown. Other challenges centred around the pandemic’s impact on schedules, the availability of labour, and the supply and delivery of materials. “The construction insurance industry also got impacted by the overall property insurance hardening, with COC rates increasing in a way they had not in previous years,” Giroux says. “The rates on combustible construction projects have been high for a few years, but 2020 pushed this even higher, with markets in London exiting this class. Many insurers also had to reduce their capacity. “Casualty rates started to increase modestly in mid-2020,” he adds. “By the end of 2020, pushed by the fact that most London markets were near their maximum premium income limits in October/ November, it was the casualty rates, particu-