Related Links: Marsh's Surety Report Arch Insurance Groups surety practice XL Surety Group Berkley Surety Group Surety capacity was increasing at the start of 2012, says Marsh Inc., the big brokerage.Driven by new and expanded surety underwriting firms, new underwriting approaches and increased limits from existing sureties, the trend could mean that obtaining surety bonds actually becomes easier this year. Among the companies that have entered, re-entered or are expanding their work in contract surety are XL, Arch and Berkley Surety Group.While most forecasts about surety in 2012 focused on increasing contractor defaults pasting higher losses on sureties, the surety
Courtesy Las Vegas Paving Don't overlook contractor's liability, Esposito says. Las Vegas Paving Corp. is a 54-year-old, privately owned heavy-highway contractor with roughly $400 million in annual sales. ENR contributor Tony Illia recently talked to Lou Esposito, the company's risk manager, about how he got started in risk management, what difference the recession has made in his approach and where insurance is heading. What is your background, and how did you begin working as a risk manager? Lou Esposito I began my career in 1980 as an adjuster trainee with Republic Claim Services. I handled small claims for The
The default and temporary shutdown just before New Year's Day of ASI Ltd., a principal subcontractor on the $825-million Barclays Center in Brooklyn, N.Y., has delayed completion of the arena's enclosure and forced extra effort by the project's prime contractor, Hunt Construction Group, to keep on track for scheduled completion later this year.For Hunt, the default “is making their life a little difficult,” says Robert P. Sanna, director of construction for Forest City Ratner Cos., the developer.ASI's default “is untimely, to say the least,” Sanna says. But he adds that he is gratified to see all the parties involved cooperating
Related Links: Appeals Court Decision in Engineering and Construction Innovations, Inc., vs. L.H. Bolduc Co., Inc. Problems continue to grow with indemnifications—contractually making one party responsible for another’s damages.They can be difficult enough to understand if one is not well versed in legal or insurance issues, but sometimes they even stump lawyers.And as a case moving through the Minnesota state justice system illustrates, liability in construction contracts is an increasingly contentious and confusing issue.The case, Engineering and Construction Innovations, Inc. (ECI) vs. L.H. Bolduc Co., Inc., arose from a water and sewer infrastructure project for which Bolduc served as a
Related Links: Is Trouble at Surety First Sealord a Signal of Trouble Among Small Subcontractors? Before Pennsylvania determined that First Sealord Surety, the small surety shut down by the state on Feb. 8, was a financial wreck, the company fought costly legal battles in different states where it had provided bonds.The state Dept. of Insurance examines licensed companies in the state once every five years and First Sealord got a generally healthy report card from an examination in 2005. It isn't clear if that is the last time the Villanova, Pa.-based surety firm was examined.A.M. Best did not downgrade First
Is it possible to save on costly “e-discovery?”Some attorneys are testing ways to head off runaway legal costs in construction lawsuits, including contract clauses ruling out emails as discoverable evidence.The idea is inviting because one of the biggest risks in a lawsuit is the size of the invoice that arrives from your own attorney.Propelled by the explosive growth of email, litigation costs today run 20% to 30% higher than six years ago, say attorneys and insurance agents. And recession hasn’t cut litigation and may actually provide more incentives for lawsuits, they say.Project team members already understand that the ballooning number
Insurance underwriters want 5% to 10% more to renew their accounts, and some lines of coverage and underwriters want or need more, but they can’t get it without risking losing clients, says Jeffrey W. Cavignac, a San Diego-based broker. “Fortunately for those who buy insurance, the industry’s robust surplus is keeping rates on preferred accounts from increasing,” he says.The frequently mentioned prospect of a hard insurance market, characterized by higher prices and stricter underwriting, has not yet materialized.That’s one of the main ideas conveyed by Cavignac & Associates in its forecast for insurance markets in 2012. As Cavignac sees it, insurance rates
The construction recession is killing off numerous smaller companies and surety losses are growing, said insurers at the International Risk Management Institute's construction conference in San Diego, which ended Nov. 17. But bigger, better-managed companies continue to win jobs, so surety losses overall will be manageable.At the same time, risk managers, brokers and insurers in attendance at the IRMI event said the never-ending legal wrangling over scope of coverage has led lawmakers in four states to attempt to assure that construction defects are covered under contractor liability insurance. As a result, they added, a few insurers reportedly are steering clear
Related Links: Biography of Zachry's Susan Staff Website of insurance consultant Wrap Strategies Website of Aon, Chicago-based insurance broker Link to release last year about broker JLT Specialty Ltd. name change The number of new contractor-controlled wrap-up insurance programs has probably pulled even with the number of new owner-controlled programs, Richard Resnick, senior vice president of Aon Construction Services Group, told an audience at the International Risk Management Institute's construction conference in San Diego Nov. 14. Other speakers at other sessions joined in "debates" set up by IRMI over whether a contractor-controlled program (CCIP) was better than an owner-controlled one (OCIP). Susan
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