By; David Dybdahl
Two long-term market leaders in restoration contractor insurance products decided not to offer renewals to current customers as a strategy to purge unprofitable business when premium increases will not solve fundamental problems with the risks to be insured. The inability to procure liability insurance will put a contractor out of business faster than a claim will.
The perfect combination of events promises to make the procurement of business insurance for restoration contractors more difficult and expensive in the near future.
Two large insurance companies that have specialized in insuring restoration contractors for years are refusing to renew their current customers in 2011. We are already seeing quotes in some states with 100% premium increases on restoration firms with no losses.
In a particularly onerous sign for the restoration industry, this market construction is going on at a time when the overall insurance marketplace has a record glut of capacity and rates are still falling in other business sectors. In fact, we still see rates falling as new entrants to the restoration insurance market naively cut prices, seeking market penetration. Their prices are clearly unsustainable. When the overall insurance industry hardens, restoration contractors will be in for a particularly wild ride on insurance availability and cost.
Some well-planned defensive actions in your insurance program now will save you a lot of time and money in the future. The inability to procure liability insurance will put a contractor out of business a lot faster than a claim will. The inability to find affordable insurance is definitely in the cards for some firms who are unprepared for the coming changes.
What you need to do now to avoid being caught in the storm:Read the Full article HERE
…….The bottom line is the experienced market leaders are getting out of the sector and that can only mean trouble for the restoration business.