Safe Solutions

Insurance issues

"Am I going to be receiving huge increases in my insurance premiums again?" "Is the insurance industry getting any better?" These are questions roofing contractors are asking themselves this year. It's typical for the insurance industry to go through cycles, but this "hard" market has been unusually lengthy. The roofing class of business has suffered more than many other classes, so roofing contractors welcome any premium relief.

In addition, the insurance marketplace, in general, has changed for roofing contractors. Many roofing contractors in certain states, such as New York, were forced to move from admitted carriers (an insurance company authorized to do business in a state) to excess and surplus lines carriers (insurers that are not licensed to conduct business in a particular state but are permitted because coverage is not available through licensed insurers). Such insurers generally write coverage for riskier classes of business that admitted carriers don't want to cover.

Insurance agents now have become familiar with the excess and surplus lines market, and industry experts advise the excess and surplus lines market will not be going away anytime soon though there has been somewhat of a shift for commercial contractors from excess and surplus lines insurers back to admitted carriers. Agents' mentality has changed to accept the excess and surplus lines as a more common and viable market. Although admitted carriers always were the first choice and excess and surplus lines carriers were used as a one-time situation, there no longer is a significant distinction between placing a contractor with an admitted carrier vs. an excess and surplus lines carrier.

Statistics from the insurance industry and rating agencies indicate that, as a whole, insurance companies are showing improved underwriting and net income results as of 2003. 2001 seems to have been the worst year.

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