Get in contact with a contractor

Rough Notes, Jan 2000 by France, Larry

If we analyze this class of business we see that, unlike with some classes, the economy can affect it positively going up or down. When residential or commercial clients take advantage of low interest rates to build new construction, that increases the contractors' payrolls and receipts-which affects premium dollars. They also may invest in their existing dwelling in order to make it more attractive to a prospective buyer with additions and improvements to the structure. If interest rates climb, homeowners or business owners may decide that, although they need additional space, the financial burden of a new purchase may not be one that they want to incur. The solution is to stay at the existing location and remodel or add square footage to accommodate the needs of a growing family or business.

In the first situation we will have general, electrical, plumbing and heating, excavating, and framing contractors-to name a few. In the case of additions or remodeling, the type of contractor could be an artisan contractor for the small projects or a general contractor for ones that involve excavation, design work, or environmental impairment.

The artisan contractor is probably the most common. This class may be simply carpentry NOC (not otherwise classified). Generally they are smaller operations that contract their skills out to larger contractors. They rarely subcontract work out themselves. Other trades that fall in this category are bricklayers, masonry, paint and paper, and air conditioning contractors. Risks that sub out more than 25%, as well as roofers, and excavation and landscape contractors, will not be eligible for the artisan programs.

Most carriers have decided what classes they will entertain for their book of business and have designed a package policy with enhancements that they hope will attract prospects. This may be small contractors that are offered "BOP" type policies up to very difficult classes that include pollution, demolition, design build (including design error), construction wrap up, marine, steel fabricators, and bridge and paint contractors.

General liability limits will start at $100,000 and go up to $50 million and higher depending on the carrier and individual risk. Bonds can be obtained up to $50 million, but a lot of background would be needed for that limit. This is an area where one of the three C's, capital, plays a major part in the underwriting of the risk. A client who requests that limit most likely would have had experience working on projects where such a limit would not present a problem.

Since we surveyed the market beginning in October, The Insurance Marketplace for the year 2000 has been compiled and distributed with the December issue of Rough Notes. Additional markets have been added to the 21 construction-related categories. There are 86 markets listed under artisan contractors alone. Other programs or coverages include architects professional liability, installation floaters, land improvement, scaffolding risks, asbestos abatement, and environmental contractor bonds.

Apollo General Insurance Agency, Inc.

19485 Sonoma Hwy.

Sonoma, CA 94585

Contact: Bob Elster

Phone: (800) 624-5829

Fax: (707) 996-7912

A program manager operating in all states offering $1-/$2 million for demolition contractors and contractors with gross receipts over $1,250,000. Auto, workers compensation, property, and contractor equipment also are available. A rated carriers are used.

Arrowhead General Agency, Inc.

402 W. Broadway, Ste. 1400

San Diego, CA 92101

Contact: Robert Young

Phone: (800) 903-5489

Web site: www.arrowheadgrp.com

An MGA operating in AZ and CA offering limits of $1million/$2 million for artisan contractor, no roofers, and commercial auto limits of $1 million CSL. Autos from one to any size fleets are considered-no livery or tows. A rated carriers are utilized to place business.

Bond Brokers, Inc.

6160 N. Cicero

Chicago, IL 60646

Contact: Craig Sherman

Phone: (888) 488-BOND

E-mail: tuffbond@aol.com Web site:

www.bondbrokersinc.com

A broker/MGA operating in all states offering limits of up to $30 million for various bonds. All carriers are A rated and treasury listed.

Brown&Riding

777 S. Figueroa St., Ste. 2550

Los Angeles, CA 90017

Contact: Chris Brown or Jack Smith

Phone: (213) 452-7060

Fax: (213) 452-7080

E-mail:

cbrown@brownandriding.com

An E&S broker operating in AZ, CA, III, NV, TX and WA offering limits of up to $250 million. Target markets include residential developers, general contractors, heavy trades, and wrap ups for public works contractors. Builders risk, umbrellas, pollution and design E&O also are available. Several A rated carriers are used to place business.

Burns & Wilcox, Ltd.

30833 Northwestern Hwy.,

Ste. 220

Farmington Hills, MI 48334

Contact: Home office for local branch

Phone: (800) 521-1918

An MGA/E&S broker operating in all states except AK, HI, MA, ME, NJ, NY and WA offering primary and excess limits of up to $25 million. Most risks will be considered. Contractors equipment and commercial auto also are written. Various A rated carriers are utilized.