The insurance market can be a tough place for Florida’s residential subcontractors working on new construction. While there are still sufficient standard markets on the commercial side for small subcontractors, those working on new residential construction such as condos, tract homes, and townhomes are finding it’s more difficult to obtain coverage. This makes it challenging to meet the insurance requirements often set by general contractors or lenders.

Hyperinflation of material, labor, and equipment costs is having widespread ramifications for the construction industry, including project funding issues, cancellation of contracts, and contractor defaults. Despite the flurry of current construction happening around the country due to infrastructure investments and the demand for new housing, it’s a challenging time, especially for smaller trade contractors. In 2021, the annual construction input inflation rate reached a shocking 19.6%. For the sake of perspective, the non-residential construction inflation rate was 4.4% in 2020 and 1.8% in 2019. The vast majority of contractors in today’s industry haven't had to navigate an inflationary environment that exceeded 5% for more than 30 years, which means many have never experienced hyperinflation and are struggling with how to handle it as well as the negative impact it can have on the bottom line (source 4).

Commercial trucking often serves as a trusted barometer for the U.S. economy. In 2020, America’s truckers carried 10.23 billion tons of freight and generated $732.3 billion in revenue (source 1).

In 2021, 19-year-old Orlando student Miya Marcano was tragically killed in her apartment by a 27-year-old maintenance employee with access to her apartment complex’s master key fob. In response to this tragedy and a growing trend of violence, Florida Governor Ron DeSantis signed Senate Bill 898, known as “Miya’s Law,” at the end of June 2022. (sources 1, 2)

The excess habitational market has been slowly hardening over the last several years, but it has accelerated over the last 2-3 years. Excess habitational premiums have been rising due to numerous factors including insurance carriers finding that they have been inadequately funded to cover the growing frequency and severity of claims in today’s litigious environment. There are now limited excess options within the first $10M, especially in the lead position. While some new capacity has started to filter into the marketplace over the last several months, few want to play in the lead $5M.