3 Things to Confirm When Construction Plans Change

Each month, US Assure Director of Producer Training and Development Mary Stiglic joins us in the studio to address a common question or pain point to help you confidently sell to and service your construction insurance clients.

Read the Video Transcript:

Jasper:

Oh, hi. Jasper Sawdust here.

Phew! Look at all these project changes my client, Helen Homeowner, wants to make. I think we’re looking at a pretty big scope change here. Just what every contractor wants to see…

As a contractor, I have a lot to consider and discuss with Helen. Cost overruns. Timeline impacts. Tear-outs. Material waste.

But first, I'd better check with my agent to see how this will affect my Zurich builders risk policy.   

Prudence Premium:

Prudence Premium, at your service! 

When a client changes the scope of work mid-project, it's important to act quickly and understand whether those changes could impact coverage.

The sooner you identify and address those changes, the easier it is to help avoid delays, prevent coverage issues and keep the project moving forward.

And, Mr. Sawdust, I know you’re already thinking … “do I really need to update the scope?” 

The answer is yes. 

Changes to the scope of work can change the risk Zurich originally agreed to insure, so underwriting may need to review the project again to make sure it’s both eligible and properly covered.

Taking this little step can prove very valuable to clients should a loss occur.

If you gather the right information ahead of time, you can avoid unnecessary delays and keep things running smoothly. 

When speaking with your client, here are three things you'll want to collect: 

Number one: the updated project values. 

Scope changes can increase the project’s total completed value. Under the Zurich builders risk policy, projects must remain insured to their total completed value throughout the policy term to meet underwriting and pricing guidelines. 

Neglecting to report those changes could create coverage issues for your client down the line.

Underwriting will then review the updated values to determine whether the project still fits Zurich's guidelines and whether any premium adjustments are needed.  

Number two: any change in risk exposure. 

Sometimes, expanding a project's scope of work can significantly change the level of risk. 

Let’s say your client starts with a simple project to replace a few cabinets and some flooring … and it becomes an open-concept renovation requiring the removal of load-bearing walls. That basic remodel just became major structural.

In those cases, additional documentation, such as a stamped engineering report or a detailed scope of work, may be needed so underwriting can reassess the risk.

You can upload them as an attachment to the online application if you haven’t bound coverage yet. Or, if plans change mid-project with coverage already in place, you can provide these documents when you endorse for the new scope. 

And number three: the revised construction timeline. 

A new scope of work can extend the originally approved anticipated completion date. If that date changes and your client needs more time, underwriting may need to review the policy and project to decide if coverage can be extended.  

Prudence:

All right, Jasper. So far, so good.

When a client’s project scope changes, calling an agent like me or even the underwriting department at US Assure can be a good place to start. 

If you gather these three pieces of information, it may save you time later: 

1. The updated project value,
2. Any changes in risk exposure, along with supporting documentation when needed,
3. And a revised project timeline.

Having this information available before underwriting asks for it can help streamline their review, avoid unnecessary delays and help keep your client's project on track.

Jasper:

Well, I guess I have a lot to discuss with Helen before I can approve these changes. I gotta go call her ASAP. 

Prudence:

‘Til next time. 

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The description of the Builders Risk Plan insured by Zurich is only a summary of available coverages. The terms, conditions, provisions, limitations, and exclusions of the actual policy as issued will dictate the scope of coverage in the event of a claim.

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