The construction industry is facing a number of “external” challenges ranging from materials price inflation, supply chain delays, and labor shortages which translates into scheduling, productivity, and profitability issues.
Although we have no control over these external factors, we can help our construction clients control the following equation:
Total Cost of Risk (TCOR) Premiums + Deductibles + Risk Management Expenses/Construction Revenues= .0050% to 1.5% (acceptable range) and maintain a competitive advantage.
Let’s explore the “Best Practices” of a Risk Management Program to achieve these results:
First step is to meet with your insurance broker to review renewal updates (i.e. payrolls, sub-work values, equipment, and vehicle changes) along with any updates on safety/ OSHA issues and open claims that will impact your renewal program.
Next, based on market conditions you should discuss what your current carrier(s) renewal appetite is, and whether you need to go to market and seek alternative proposals. If your current carriers are going to restrict any coverage require higher deductibles/retentions or increase rates outside of the normal range, then ask your broker to select two to three carriers who fit your risk profile. Have them prepare submissions to go to market and set a deadline of three weeks prior to renewal to review and evaluate proposals.
At AssuredPartners, we represent over 20,000 construction clients nationwide with 200+ offices to serve you. Contact our experienced team of Construction & Surety Professionals to help you achieve your lowest possible Total Cost of Risk (TCOR).
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