General Contractor Insurance: Should Insurance Agents Target Construction Insurance Market?

Like every other niche insurance market that is on the transition, be it Wedding Event Insurance or Cyber Security Insurance, Construction Insurance Market is also beginning to change.

But the change – Is it for good or?  

That is something we’ll find out at the end of this blog.

For agents planning to serve Construction Insurance Market – know both the pros and cons of it.  

Let’s start with the benefits.

The construction business market is growing. And it is something to consider by insurance agents.

Why?

The Construction Insurance Market is more selective.

There are lots of clients, be it small or big contractors, tapping into this market with new businesses.

According to Insureon Solutions, the housing market is recovering. Furthermore, the Merger and Acquisition (M&A) market is also on the rise. Meaning, the construction industry is rebounding, too.

Over the years, lots of general contractors are entering this market. With it, several large construction projects are coming in which has made the market more demand driven.

With many projects on the go, clients are willing to go the extra mile to make sure their buildings end up being safe even if disaster might strike any time.

And for this, clients are calling out for general contractor insurance.

What is General Contractor Insurance?  

In simple terms, General Contractor Insurance covers the loss brought by third parties over property damage and bodily injury. 

Viewing this insurance from the clients’ perspective, here’s what we need to find out- Are clients demanding for General Contractor Insurance?  

As per the data by Insurance Journal, US Construction Business is spending a lot in the market. Spending in construction grew by 7.6 percent from April 2017 – 2018.  

There was also a rise in the market share of three sectors – Private Non-Residential Spending grew by 5.3%. Similarly, Public Construction Spending jumped by 7.7%, and Private Residential Construction Spending soared by 9.5%.   

 

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How does the spending in the construction market by the clients benefit agents?  

If you think about it, the answer is pretty much straightforward.  

Bringing in new large construction projects is a massive investment. And to protect this investment, clients are looking up for general contractor insurance.   

How do we know for sure that the general contractor insurance is in demand? 

According to MyNewMarkets, the market for mini-contractor insurance is growing in 45 states, with over $330 million as its premium. 

Up until here the blog was more about how the market is growing. But apart from the growth side, Construction Insurance Market has certain loopholes to it as well.  

Now let’s find out what those loopholes are.  

Construction Insurance Area: Keep Out?

By far as to our understanding, this market was in a growing trend till 2018.  

Even until the first half of 2019, the market was stable. But according to PropertyCasualty360, the mid-year data for 2019 of the construction insurance market says otherwise.  

In the current context, the shortage of labor faced by the contractors has led to many businesses exit this marketplace.  

What is the aftermath? 

The market is facing losses in terms of builders’ capacity and retention. As a result, the data signals that the market is slowly shifting towards a soft market.  

With both the pros and cons of this market now discussed, it all comes down to the ultimate question – 

Is it a good time to be in Construction Insurance Market?

Although there are certain drawbacks in this market, the pros happens to grab the edge over the cons.  

As per PropertyCasualty360, not all lines of the insurance in this market are facing challenges – Professional Liability Coverage is on the upswing!

Furthermore, Insurance Journal states that the construction insurance market as a soft market is soon to be over for more businesses are making way to the surplus line in this market.

You know what this means, right?

The more the businesses will enter this market, the more this insurance will be on the rise as clients will need it eventually.

In the Construction Insurance Market, clients want to work on their business the right way. And by the right direction, the idea of general contractor insurance happens to be a part of it.

And for this, you can be the insurance agent to help them out in doing what they are seeking!

Do you also think Construction Insurance Market is a good option for the insurance agents? Comment below and let us know.

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Schedule a call right now and learn how you can ease your work, sell more, and increase your profits!

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