Difficult economic conditions and constricted financing are weighing heavily on artisan trade contractors. While the whole construction sector has contracted, residential construction is most affected, with excess housing stock expected to depress housing starts through 2012. Population trends will drive up construction demand in the future, but the pace of recovery will be slow. Just how slow will vary by region.
Against this backdrop, commercial builders and developers are consolidating. Trade contractors are seeing fewer projects of larger size and greater complexity. Fluctuating commodity prices are impacting building materials and stretching project budgets and timeframes. Technology is changing the trade contracting world. Increasingly sophisticated equipment means more employee training -- and more pressure to retain skilled workers.
All of this has increased the financial, operational and contractual risks of contractors, and necessitates a stronger-than-ever partnership between a contractor and its insurer.
Zurich has a robust appetite for trade contactors and a wide range of solutions for this sector, including:
Financial lines products are available across the construction sector. Property & casualty products are available for most artisan contractors. Automobile and workers’ compensation insurance may be provided for commercial and residential building contractors. Zurich is most competitive for established businesses primarily engaged in commercial projects that require limited subcontracting, work at heights or underground work.
Errors & Omissions Liability
Several factors have taken the professional liability risks of contractors to new heights. The boom in computer software, including sophisticated technologies such as Computer-Aided Design software and Global Positioning Systems, has reduced costs and improved efficiency, but it has also led customers to expect more accuracy and fewer errors. The growing cost and complexity of commercial projects has led to a more collaborative design process, which can increase exposure. Zurich Errors & Omissions Liability insurance can help address these risks.
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Employment Practices Liability
Seasonal staff fluctuations, market-driven employment declines and the communications challenges of an increasingly non-English speaking workforce are combining to increase a contractor’s risk of employee claims of discrimination and other wrongful employment acts.
Zurich's Employment Practices Liability insurance gives trade contractors critical coverage for defense of these claims.
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Directors & Officers Liability
A shrinking construction market and challenging economy have spurred consolidation and forced many contractors to diversify into new areas. For many, this also means taking on significant management liability risks.
Zurich’s Directors & Officers Liability insurance provides important coverage for contractors in claims alleging mismanagement of business operations. Coverage is available standalone or with our Employment Practices Liability and Fiduciary Liability insurance.
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Fiduciary Liability
For trade contactors, administering employee benefits is made all the more difficult by rising costs and a transient workforce. Without proper insurance, business owners and other potential fiduciaries can find their personal assets vulnerable in claims of plan mismanagement or other breaches of their “fiduciary duty.”
Zurich provides Fiduciary Liability insurance as part of a comprehensive management liability solution.
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Crime
While contractors are always vulnerable to loss from theft and employee dishonesty, difficult financial times amplify the risk.
Zurich Crime coverages help contractors manage losses arising from forged invoices, false purchase orders, inventory theft and other crimes.
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Property
Contractors typically have valuable property at the office, shop and yard. They may have significant investment in inventory. Additional valuation challenges stem from materials, tools and equipment stored at jobsites and temporary locations, and from the use of sophisticated computer hardware and software, such as Computer-Aided Design systems. Contractors may also use owned or hired vehicles or common carriers to transport materials. Fluctuating materials costs compound the difficulty of valuing contractors’ exposures.
Zurich’s Property Portfolio Protection (P3) provides the flexible coverage contractors need to protect physical assets, without the excessive costs and restrictive forms that impose the same valuation and causes of loss across all property types.
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General Liability
Contractors’ liability can erupt from many quarters, including:
- Owned and leased office and storage premises
- Job site operations
- Subcontracted operations
- Contractual agreements covering projects, leased equipment and additional interests
- Completed operations for work performed
Zurich provides General Liability insurance for contractors' premises, operations, contractual and completed operations liability exposures. Our accompanying Virtual Consulting online resource provides contactors with risk management guidance, including OSHA-oriented safety plans.
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Builders Risk
Contractors often have substantial values in materials at jobsites and temporary locations. They can be held responsible for damage caused by testing of building systems, or incur significant business income loss when property is damaged or destroyed.
Zurich offers an exceptional Builders Risk solution for residential and commercial contractors. See our Builders Risk Plan for details.
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Automobile
The vehicular exposures of contractors can range from light trucks for transporting personnel and equipment to jobsites, to heavy trucks for heavy equipment or picking up and delivering materials. Supervisors may use company-owned, rented or personal vehicles to visit jobsites.
Our Automobile insurance can address a contractor’s array of auto exposures in one stop. Our Virtual Consulting adds online intelligence, fleet safety and driver training services.
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Workers' Compensation
Changing jobsites and personnel make consistently administering and communicating employee safety and injury management programs difficult for contractors.
Zurich provides Workers' Compensation insurance with exceptional capabilities and resources to help minimize the costs of occupational injuries and illness. Our industry-leading medical provider networks and tools guide managers, improve employee communication and accelerate employees’ safe return to work, helping to preserve productivity and protect a contractor’s investment in its workers.
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Umbrella Liability
Construction liability litigation can be extremely complex and time-consuming. Allegations of defective work or materials quickly make adversaries of the suppliers and other contractors associated with a job. As a result, contractors can be left to defend more cases in more venues.
Zurich commercial Umbrella Liability insurance offers high-limit liability protection, without territory restrictions, to insure the potentially catastrophic liability of contractors. Coverage comes with the global resources and experience of the Zurich claims team.
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Accident & Health
Accidents are the fifth leading cause of death and are increasing at a faster rate than the top four causes. Employees are constantly exposed to these risks and looking to employers for a solution.
Zurich Accident & Health coverages can be customized to each contractor’s needs. They include Business Travel Accident and Basic (employer-paid) and Voluntary (employee-paid) Accidental Death and Dismemberment insurance.
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Environmental
Unexpected site conditions, hazardous substances, expanding liabilities or unclearly defined responsibilities can put in jeopardy years of hard work that went into building the reputation and assets of any contracting firm. And even if a claim never occurs, lack of the appropriate insurance can preclude a firm from bidding on many of the most sought-after jobs. With a comprehensive risk-transfer program, contractors may have the protection to help avoid financial loss from environmental situations, as well as the ability to be competitive when opportunity knocks. Zurich offers insurance coverage that is backed by a level of technical underwriting knowledge and financial strength that few insurers can match.
Our environmental liability coverage for contractors is among the broadest in the industry. Because every risk is unique, Zurich underwriters will work with each client to customize coverages as needed. Zurich’s Contractor's Pollution Liability policy provides coverage for third-party claims filed against a contractor for loss caused by pollution events arising out of covered operations performed by or on behalf of the insured contractor at project sites. Coverage is available on a claims-made or occurrence type basis.
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