Until recently, the list of what would be covered or excluded in a typical builders risk insurance policy was often a cut-and-dried affair. But these days, many construction and engineering companies are seeking a more flexible range of exclusions that had been used mostly on energy and industrial projects.
To meet the demand, insurers are writing policies that adopt language published by the London Engineering Group (LEG), an association that supports engineering, energy and construction liability underwriting markets. Of the three significant builders risk-related LEG defect-exclusion wordings, LEG 3 policy language is most frequently used in the U.S. Whether this exclusion finds a permanent, widespread place in U.S. construction risk management remains to be seen.