If you’re still pining for another 1990s-style construction boom, you clearly are a contractor and not an insurer. The insurance industry might rather forget that decade. The 1990s may have brought on skyrocketing construction volume, but they produced an unprecedented level of construction defect litigation. That was the era when premiums began to go up -- and carriers began to get out.
Unfortunately, many small and mid-size contractors still struggle to find ways to insure projects that have a higher-than-normal liability. In the past couple of years, however, a growing number of them have found relief through the use of a consolidated insurance program, or CIP. Also called wrap-up insurance, these plans historically have been used only on large, high-liability projects. Savings produced by such plans have been in the 1 to 2-% range, a major reason that a growing number of underwriters are willing to extend CIPs to mid-size projects as well. The required threshold usually is about $125 million in total construction costs.