Contractors in Need of Relief

With the iffy economy and a plague of insurance problems, building contractors may feel like they’re being persecuted. Fortunately, interest rates have been hovering at historically low rates keeping residential building starts from tanking completely, despite high unemployment in the general population and lousy economic figures. According to the U.S. Department of Labor Bureau of Labor Statistics, employment in the construction industry was down slightly in 2002, at 6.6 million nationally, compared with a 2001 employment figure of 6.7 million. Construction industry employment reached a peak that year, having steadily increased from 4.5 million in 1992.

As senior writer Dave Thomas discovered while researching “Inside the Contractors Market,” the insurance picture for construction firms is rather bleak with underwriting restrictions and extremely high premiums forcing some residential contractors in western states to go out of state to look for work. Things aren’t quite that bad in Texas, but suspicions are that many smaller contractors may be forgoing insurance. And the outlook suggests that things will get worse before they get better.

When it comes to the involvement of minorities and women in the insurance industry, the numbers tell the story and the numbers are low. While the population of the U.S. in general is becoming more and more diverse, the insurance industry, especially on the distribution side, hasn’t kept pace with that diversification. Staff writer Kevin O’Reilly details the numbers and what they mean in, “Minority and Women Agents Look to Tap Emerging Markets.”

The never-ending med-mal debate heated up again recently when Weiss Ratings released a study of malpractice rates and those states with and without caps. Insurance Journal International Editor jumps overseas and looks at the study and one industry trade group who has taken issue with it.

Finally, in “Parting Shots,” Dan Dunmoyer, president of the Personal Insurance Federation of California (PIFC), looks at the challenges in finding a home in California and how a tough contractors market is making that even more of a challenge in 2003.

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Topics Contractors