Related Links: Is Trouble at Surety First Sealord a Signal of Trouble Among Small Subcontractors? Before Pennsylvania determined that First Sealord Surety, the small surety shut down by the state on Feb. 8, was a financial wreck, the company fought costly legal battles in different states where it had provided bonds.The state Dept. of Insurance examines licensed companies in the state once every five years and First Sealord got a generally healthy report card from an examination in 2005. It isn't clear if that is the last time the Villanova, Pa.-based surety firm was examined.A.M. Best did not downgrade First
Is it possible to save on costly “e-discovery?”Some attorneys are testing ways to head off runaway legal costs in construction lawsuits, including contract clauses ruling out emails as discoverable evidence.The idea is inviting because one of the biggest risks in a lawsuit is the size of the invoice that arrives from your own attorney.Propelled by the explosive growth of email, litigation costs today run 20% to 30% higher than six years ago, say attorneys and insurance agents. And recession hasn’t cut litigation and may actually provide more incentives for lawsuits, they say.Project team members already understand that the ballooning number
Insurance underwriters want 5% to 10% more to renew their accounts, and some lines of coverage and underwriters want or need more, but they can’t get it without risking losing clients, says Jeffrey W. Cavignac, a San Diego-based broker. “Fortunately for those who buy insurance, the industry’s robust surplus is keeping rates on preferred accounts from increasing,” he says.The frequently mentioned prospect of a hard insurance market, characterized by higher prices and stricter underwriting, has not yet materialized.That’s one of the main ideas conveyed by Cavignac & Associates in its forecast for insurance markets in 2012. As Cavignac sees it, insurance rates
The construction recession is killing off numerous smaller companies and surety losses are growing, said insurers at the International Risk Management Institute's construction conference in San Diego, which ended Nov. 17. But bigger, better-managed companies continue to win jobs, so surety losses overall will be manageable.At the same time, risk managers, brokers and insurers in attendance at the IRMI event said the never-ending legal wrangling over scope of coverage has led lawmakers in four states to attempt to assure that construction defects are covered under contractor liability insurance. As a result, they added, a few insurers reportedly are steering clear
Related Links: Biography of Zachry's Susan Staff Website of insurance consultant Wrap Strategies Website of Aon, Chicago-based insurance broker Link to release last year about broker JLT Specialty Ltd. name change The number of new contractor-controlled wrap-up insurance programs has probably pulled even with the number of new owner-controlled programs, Richard Resnick, senior vice president of Aon Construction Services Group, told an audience at the International Risk Management Institute's construction conference in San Diego Nov. 14. Other speakers at other sessions joined in "debates" set up by IRMI over whether a contractor-controlled program (CCIP) was better than an owner-controlled one (OCIP). Susan
Related Links: Jefferson County Commissioners Send Refinancing Plan to Alabama Legislature Jefferson County, Ala., Commissioners in Last-Ditch Renegotiations Over Muni Debt Spending on Sewers, Risky Financing Push Alabama County Near Bankruptcy Jefferson County, Ala., commissioners, faced with massive sewer-system debt and loss of a major revenue source, filed for bankruptcy Nov. 9, saying efforts to negotiate with creditors had failed and future talks would not be productive.With $4.1 billion in sewer, school and general obligation debt, the filing would be the largest municipal bankruptcy in U.S. history, outpacing the $1.7 billion bankruptcy by Orange County, Calif., in 1994.Jefferson County, with
Related Links: Online database of stalled projects Stalled Construction Projects and Financing In an effort to try to relieve some of the stress of the recession in construction, the American Institute of Architects is becoming an online matchmaker, of sorts. On Nov. 7, the AIA launched a stalled-projects online database intended to hook up developers, architects and other industry leaders with investors and funders to restart mothballed U.S. building projects. The find-a-business-partner initiative is designed to help architects and their clients find a solution to the “primary issue plaguing the design and construction industry—access to credit,” says the AIA.“The Match.com
Related Links: Jacobs Announces Acquisition of KlingStubbins Jacobs Engineering Group said that it has acquired architect KlingStubbins, a move that boosts the parent’s design capabilities and adds 500 U.S. and Asia-based employees.KlingStubbins, Philadelphia, is No. 111 on ENR’s list of the Top 500 Design Firms, with $98 million in 2010revenue.Avram Fisher, an analyst with BMO Capital Markets, says that the justification for the purchase appears to be a desire to better compete with other big players.Calling the deal "a small, bolt-on acquisition" for Jacobs, Fisher said buying KlingStubbins enables Jacobs, "which is at heart an engineering services firm, to better
Photo by Bruce Buckley Robert Murray, vice president of economic affairs for McGraw-Hill Construction, sees no upswing in construction volume in 2012. Related Links: YouTube Video of McGraw-Hill Construction's Forecast for 2011 A fifth straight year of decline is how 2011 will go into the record books, with no growth likely next year. That's the sobering forecast from McGraw-Hill Construction.In light of the sluggish economy, construction spending continues to limp along in a depressed state with few limited signs of hope on the horizon. McGraw-Hill Construction, the parent of ENR, estimates that 2011 will close out with a 4% drop