Underwriter Notes Trends Driving Insurance Products
According to the New Day "Market Update 2008," several key trends are likely to influence the purchase of Pollution Legal Liability (PLL), Contractors Professional Liability (CPL) and Contractors Professional Liability (CPrL) insurance products in the coming year.
For instance, the specialty resource of environmental and construction-related professional liability insurance coverage foresees PLL continuing to comprise approximately 60 percent of the entire $2.8 billion environmental marketplace. This is due to its ongoing use as a risk financing technique in real estate transactions as well as the influence of other purchasing motivators driven by regulatory, contractual, financial and risk management concerns.
In the area of CPL insurance, which represents approximately 30 percent of the entire environmental insurance marketplace, New Day reveals that more contactors are buying this specialty coverage as a value purchase and a method for investing savings to round out their insurance portfolios. Buying motivators will include contractual requirements, asset protection and loss events.
In addition, the update reports that CPrL premiums, which are estimated in the $250 million range, are likely to grow at a rate of about 15 to 20 percent per year. Buying motivators will be strengthened by an increasing trend within the industry to create collaborative construction teams as well as the introduction of additional competition among insurers to provide combined coverages.
"Our analysis of the marketplace indicates an expanded need for CPrL coverage in 2008 and beyond," said Jefferey S. Lejfer, New Day Underwriting president. "With programs such as Leadership in Energy & Environmental Design, a push for sustainable structures, advances in Building Information Modeling and the prevalence of Public/Private Partnership projects, contractors will continue the search for the optimal CPrL solution for their unique professional liability risks."
"As a result, the broadening for the market, expansions in coverage and the softening of rates, will also converge to make CPrL programs far more attractive to constructive firms that had never contemplated coverage in the past or previously thought it was far too expensive."
Founded in 2005, New Day Underwriting of Bordentown, N.J., provides agents and brokers representing the real estate, construction, environmental consulting and manufacturing industries with single point-access to a broad portfolio of environmental and construction-related professional liability products provided by the nation's largest insurance providers.