Contractors are in a wilderness of litigation and rising insurance premiums. And one reason is certain attorneys, always hunting new sources of revenue, have set their sights on the nation's construction industry. With annual revenues of $750 billion, 5 percent of the total U.S. work force and nearly 500,000 firms, the construction industry is simply too large a target to ignore.
Unfortunately, the media and federal and state governments have paid little attention to the construction industry's predicament. A dramatic increase in construction litigation, coupled with an insurance market hit hard by the Sept. 11 terrorist attacks, has landed the construction industry in rough territory. Insurance premiums have skyrocketed, and availability has dwindled.
To help quantify and shine some light on the problem, The Roofing Industry Alliance for Progress teamed with the Electrical Contracting Foundation and other groups to fund a study that would assess construction litigation and its effect on the availability of reasonable insurance coverage. In August, Ducker Worldwide, Bloomfield Hills, Mich., released the study, "The Contractor Liability Insurance Cost and Coverage Problem—Solutions to Improve," and the findings confirm the pernicious influence of tort activity.
A harsh environment