As we head into 2023, construction contractors should prepare for rate increases of at least 10 percent. Of course, this will vary business to business depending on changes to things like payroll, property values, and previous years’ losses. In addition, different insurance markets are harder than others, depending on current economic and social conditions.
According to Construction Executive, here are a few highlights of what contractors can expect in the year ahead:
- Property Insurance: Thanks to wildfire activity in the west and massive hurricane-related losses in the east, contractors should plan for at least 10 percent increases (and in some areas, much, much more). To keep up with inflation, contractors will also need to keep higher replacement costs in mind.
- General Liability Insurance: Although in general we can expect flat to plus 5 percent increases, this varies greatly across business types. Some habitational and hospitality businesses are seeing double-digit rate increases, while some commercial construction and life science risks may be happily surprised with decreases.
- Auto Insurance: Plan for rate increases of at least 10 percent. The number and severity of accidents has increased, as have repair costs. Social inflation and nuclear verdicts are also having an impact, and we’re seeing higher and higher jury awards.
- Excess (Umbrella) Coverage: Due to social inflation, carriers are raising rates by at least 25 percent and clamping down on capacity. Auto, habitational, hospitality, and large retail risks in particular can expect rate hikes.
- Workers’ Compensation: WC rates have steadily decreased over the past year, but we can expect to see this plateau in 2023.
- Executive Risk: D&O, EPLI, and crime markets remain competitive, helping to maintain increases at roughly 5 to 10 percent. However, public D&O rates are faring better with flat renewals and even some decreases.
- Cyber Insurance: The cyber market continues to evolve and shift. Rates are currently climbing, and insureds should prepare for increases of 25 percent, 100 percent, or even more.
- Professional Liability: Market competition is keeping rates somewhat in check, with many renewals coming in at flat to plus 5 percent.
For more details on what to expect from these lines, visit the full Construction Executive article.
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