Creative Construction

Now is the time for construction specialists to get creative, says Roger Cornett, leader of Holmes Murphy’s construction team.

“It’s more incumbent on us construction-focused insurance brokers to be the most creative we’ve ever been in approaching risk management and risk financing for our construction clients,” he said.

Danette Beck, the head of industry verticals and national construction practice leader at USI Insurance Services, agrees, adding that construction specialists must be mindful of today’s market challenges and the extra time it takes to be creative.

“Operating off of 180-day renewal cycle isn’t doing anyone any good anymore,” she said. “And having risk as a part of a contractor’s conversation every day is important because buying insurance is only one part of a risk management strategy.”

Construction firms must be mindful of their internal controls, risk management strategies and understand the contracts they are signing.

“Contracts are getting much more complex, and [project] owners are looking to allocate risk to contractors a lot more now,” Beck said. “How do you deal with taking on more risk than you’ve taken on before?

How do you manage that vis-a-vis with your insurance program to help support your contractual liabilities that you’re agreeing to?”

Beck says construction brokers can help their contractors stay on course to manage their financial health and wellness through risk management. “Potential recessionary environment, regional banking concerns, increasing interest rates, prospects of a federal debt ceiling crisis, and persistent skilled labor availability, all hit the top of risk issues currently plaguing contractors and subcontractors,” she said.

While these challenges are forcing contractors to be more mindful of contract terms, budgets and schedules, they will continue to enjoy some of the healthiest backlogs in construction work across most major market segments for the rest of 2023 and beyond, she predicts.