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Detailed risk information guides builders risk insurers to better priced coverage

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There’s a blueprint of best practices that risk managers can follow to make their accounts attractive to builders risk underwriters.

The key, just as it is for any other coverage, is information. And just like a blueprint, the more detailed the information, the better.

“People should get the COPE information — construction, occupancy, protection and exposure,” said Mark Gadaire, senior vice president, inland marine major accounts for Chubb Ltd. in New York. “Tell us what you’re building, tell us what your project is about.”

By providing quality information, the placement process runs smoothly and risk managers are more likely to get better terms and conditions, he said.

“Provide complete information to underwriters, which will allow them to determine if prototypical equipment or designs are being used,” said Joe Vierling, senior vice president, builders risk unit for North America for Axa XL, a division of Axa SA, in New York.

“Providing a detailed construction schedule is also helpful as it allows the underwriter to accurately price the risk,” as well as establish the anticipated date of completion of the project for the delay in start-up coverage, he said.

Providing a water intrusion plan helps underwriters assess the project’s exposure to water damage other than flood, which is the leading cause of loss for projects under construction, added Mr. Vierling.

“One major thing is we still see that the builders see insurance as a way of entirely transferring the risk,” said Sedat Kunt, Marsh LLC’s national construction property leader in New York.

He said there has to be a “holistic, cohesive” approach by the risk managers to view insurance.

“Everything that gets done in terms of risk management programs that are in place and are actually acted on will certainly help to market that specific client’s account in the marketplace,” he said.

 

 

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