If your liability insurance policy has come up for renewal recently, you've probably learned a hard lesson: Insurance companies don't like you anymore.
Even if you've never filed a claim, never been sued and your business runs like a Swiss watch, you wear a scarlet letter for one simple reason - you build houses. Every home builder in America is now persona non grata to the insurance industry. Some of you are tolerated; none of you is loved.
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The Problem Defined The Problem
When you face this, don’t be surprised if you come a little unglued. |
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'Double Whammy' Decks BuildersThe Causes
The liability insurance crisis is not new. It has been growing since the economy began to head south early in 2001, and it ripened into real trouble after the events of Sept. 11 sapped capacity from the whole insurance industry. In the West, many builders might say it has been a crisis since the mid-1990s, when the epidemic of construction defect litigation began spreading from California into Nevada, Arizona and Colorado. |
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Builders Respond With Innovations The Effects
Faced with the current hard insurance market and no real confidence that it will soften soon, many builders are following the Franklin Roosevelt policy try something, anything. The biggest builders are the most active innovators but certainly not the only ones changing the status quo. |
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What to Do Next Bottom-Line Recommendations
The first thing is to start thinking about liability insurance, and do it today. Don't wait until your policy is about to expire. And do it every day. Not all the time, of course. You can't run a business if all you do is worry about insurance. But keep in the back of your mind that everything you do affects your insurance risk, and it all has consequences. Underwriters are watching. Here are some steps to consider. |
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