Responding to the lack of availability in the construction market, AIG Excess Casualty recently introduced a new excess casualty practice for builders and contractors, AIG Construction Specialty.
AIG Construction Specialty provides commercial umbrella liability insurance against events such as construction site catastrophes, explosions, collapses and completed operations incidents. In addition to an underwriting team that specializes in insuring construction risks, the practice has a dedicated construction claims unit to resolve claims quickly and cost-effectively.
“We’ve combined all of the business that we had in various business segments for excess liability and we’re putting it together for construction under one industry specialty,” Todd Germano, vice president of AIG Construction Specialty, said. “We had previously been handling it in different business units which wasn’t as easy for us to meet the needs of all the contractors and the insureds. Now we’re going to have one business unit handling all of the construction business, which we think will allow us to better serve them and be more consistent.
AIG’s focus comes at a crucial time, when capacity nationwide is constricting. Germano specifically mentioned the tight markets in New York, which imposes strict liability on anyone who controls a worksite, and California, with its competitive contractors market, numerous allegations of poor workmanship and recent litigation that expanded responsibility among subcontractors for defense of lawsuits. Additionally, according to Rudy Whitcomb, president of Whitcomb Insurance Services, “caps on malpractice punitive damage awards drew attorneys away from malpractice and class action malpractice work and drew them to a rapidly expanding field of Residential Construction Defect Litigation, and class actions particularly on condominium and town home projects.”
The practice will consider accounts with at least $10 million in revenues, and will consider all classes of construction business, including homebuilders, general contractors, specialty contractors, wrap-ups and project-specific risks. Standard policy limit is $25 million.
With an underwriting team of approximately 20 nationwide, AIG’s new unit will allow for a dedicated focus to the insuring of builders and contractors. “We’re working with the builders and as well as other constituent parties in the industry to try and provide a product that is both viable and makes sense for us as well,” Germano said.
“[We're] putting a focus on it, paying greater attention to the industry itself, and listening to the brokers and insureds and providing a consistent marketplace and significant capacity with AIG’s triple-’A’ rated paper. We’re looking to grow that business and write it as profitably as possible,” he added.
AIG Excess Casualty is a division of the property and casualty subsidiaries of American International Group Inc. For more information, contact Todd Germano at (212) 458-5849.