Not sure what to expect when it comes to premium or terms and conditions? Interested in which lines of business may be seeing limited capacity or markets? Learn what to expect in the 2023 marketplace with our annual easy-to-read quick reference guide.

Construction projects are often complex undertakings, involving a variety of different stakeholders, including contractors, architects, designers, subcontractors, suppliers, and project employees. With several entities involved, the potential liability exposures of construction projects can be extensive. While project owners typically require subcontracted design professionals and construction managers to carry Architects & Engineers (A&E) insurance, coverage for a project owner under an A&E policy is still far from guaranteed.

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).

After the rapid price increases of recent years, the frame builders' risk market has stabilized, but carriers remain disciplined about rates. While capacity is adequate, carriers are looking at the aggregation of projects in areas and declining or limiting capacity on those in close proximity to each other or insured by the same company. Ensuring continuity of terms/conditions around coverage, warranties, and deductibles on quota share placements is also essential when seeking coverage.