Weather Parametric Insurance
Why choose Zurich for Construction Weather Parametric Insurance?
Our Construction team recognizes the challenges of weather delays and the impact of climate change. For more than 25 years, the Zurich Construction team has supported the needs of contractors, developers and owners as they address the many challenges of completing a project on time and within budget. Using the knowledge that comes from years of experience, the Zurich Construction team has developed Zurich Construction Weather Parametric Insurance to help provide a solution for the financial impact of project delays.
This parametric solution complements Zurich’s Builders Risk policy, which requires actual physical loss or damage in order to trigger coverage. While traditional insurance products such as Builders Risk offer protection for financial losses related to property damage due to weather, our Construction Weather Parametric insurance doesn’t require physical damage to trigger a claim. Instead, it kicks in when a predetermined trigger is met by the predetermined threshold of rain, wind, snow accumulation, heat or cold — any of which could temporarily derail a project and inflict financial losses.
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Parametric insurance in action
Situation:
A first-time Florida stadium builder faced the potential for severe wind during the construction project. A key component of this project is the coordination of four large crawler cranes the contractor is renting. These cranes are very expensive and can only operate if wind speeds stay below a certain threshold. The contractor has very thin margins on this job and is fearful the Florida storm season could result in several days where cranes can’t be operated.
Solution:
The storm season generally runs from June through November in this location, so the Parametric Insurance policy was written for that specific period. It covered 12 days when the maximum hourly average wind speed was at, or in excess of, 40 miles-per-hour during work hours. Protecting its crane rental costs was a smart way for this contractor to kick off the stadium project.
Weather Parametric Insurance: Helping Protect Against Non-Damage Delays
Zurich offers an innovative approach to managing complex weather risks in construction. Our Construction Weather Parametric Insurance solutions are designed to help mitigate the financial impact of non-damage weather delays, helping projects maintain momentum despite unpredictable conditions.
Unlike traditional insurance, Construction Weather Parametric Insurance provides pre-agreed payouts when specific, predefined weather triggers are met. These triggers can include:
- Excessive rainfall
- Extreme temperatures
- High winds
- Heavy snowfall
Optional worker-safety perils:
- Air Quality Index
- Heat Index
The key benefit is that a payout is made without requiring physical damage to the construction site. This forward-thinking strategy provides financial resilience and peace of mind, especially for projects where construction project delays due to weather can significantly impact timelines and budgets. Zurich helps construction firms navigate these challenges with solutions that adapt to specific project needs.
To understand how this innovative solution can benefit your project, contact your broker, or connect with a Zurich preferred broker today.
Tailored triggers, swift payouts and operational resilience
Zurich's approach to construction weather risk management is built on precision. We collaborate with you to define customizable weather triggers that directly align with your project's unique sensitivities. These triggers can be based on specific rainfall amounts, temperature fluctuations, wind speeds, or other meteorological data points relevant to your operations.
The benefit of parametric insurance lies in its efficiency: once a predefined trigger is met, swift payouts are initiated. This rapid financial injection helps you address immediate operational disruptions, covering costs like extended equipment rental, labor standby, or expedited material delivery. This proactive financial support is critical for maintaining operational construction resilience, helping your projects stay on schedule and budget.
Our experience in using advanced data analytics for trigger setting, combined with an efficient claims process, helps provide you with the financial agility needed to overcome weather-related challenges.
For a tailored approach to managing weather-related project risks, talk to your broker, or contact a Zurich preferred broker today.
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As one of the leading insurance carriers in the construction industry, our mission is to provide creative solutions for the risks our customers face today and in the future by providing a broad array of distinctive products and services, we work to help limit the cost of risk while helping to increase job site safety awareness.
Zurich Construction’s experienced leadership team is ready to work with you to help ensure your business risk management needs are met.
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Parametric insurance fills the gaps often left by traditional insurance. This coverage provides an alternative to help fund the delay costs and economic losses of a project due to extreme weather events such as rain, wind, snow accumulation, heat or cold.
Parametric solutions are a smart choice for contractors, owners and developers who manage projects exposed to weather events, such road construction and solar installations. They can also be excellent tools for managing risks associated with time-sensitive opening dates for projects such as stadiums or student housing, as well delays in the completion of a hospital or convention center that could have long-term ripple effects for a community.
Instead of indemnifying for an actual physical loss or damage, parametric insurance addresses the probability of an event happening. Parametric insurance sets predetermined parameters and payments — agreed upon by the insurer and the customer — for risks that can be objectively measured and verified by a third-party authority. Once that measurement is triggered, the claim is paid. That’s it. Parametric insurance requires only that the threshold for the agreed-upon risk is met, and this objective approach also means claims can be paid expediently.
- Covers economic losses caused by predetermined weather and climate triggers
- Helps protect against a single peril or a combination of perils including rain, wind, snow accumulation, heat and cold
- Payout is based on the preestablished Average Daily Loss Value (ADLV) and coverage trigger
- Offered on a project-by-project basis
- Claim payments received in weeks
Each policy is customized to address your firm’s financial objectives and risk appetite. It covers the costs incurred as a result of project delays caused by extreme weather including:
- Labor costs
- Equipment rental expenses
- Liquidated damages
- Expediting expenses
- Loss of revenue
