Why Zurich Says No: Understanding 3 Builders Risk Declines

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:

Mom, “because I said so” doesn’t work on me anymore. OK, yes. Love you. Talk to you later.

Geez.

Oh! Hi there. Sorry you had to hear that. Don’t you just hate it when you’re told no without any explanation why

Whether you hear it in your personal or professional life, that can drive a person crazy.

Just like when an application is declined.

While Zurich has a vast appetite for course of construction projects, we do have some cases that are a big “oh, no!”

But rather than give you another “because I said so,” let’s talk about the reasoning behind three specific no’s.

First, structures on the historic registry.

The reasons we say no to these projects include:

• There are a LOT of cooks in the kitchen saying what can and can’t be done to the structure.
• Any work done on these projects typically takes a highly skilled craftsman and you know how hard they are to come by.
• It can be difficult to match the materials.
• And … Zurich doesn’t offer an agreed value endorsement for a predetermined value.

Second, foundation work to an existing structure.

As you know, remodeling risks are unpredictable. And, assessing the condition of an existing foundation can be very difficult. That means it’s very hard to price the account.

The major risk with foundation work is collapse. Since there’s so much unknown until the work starts, it’s just too uncertain and Zurich isn’t willing to risk the overall stability of the program.

And the last example I’ll cover today is contractor experience.

Zurich requires contractors to have two years of project-related experience.

Over decades in the insurance industry, Zurich has found that inexperience brings longer completion times, project management challenges and incomplete construction timelines. This opens Zurich up to unnecessary claims.

Keep in mind, this isn’t an exhaustive list of Zurich’s reasons to decline a builders risk application. But, I don’t want to overwhelm you right out of the gate. We’ll save those for another time.
I hope this clears up some of your questions when it comes to...

(Phone rings.)

Oh! Hi, Mom. Yes, hold on.

‘Til next time.

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