Why construction insurance rates are starting to climb

Canada’s lack of skilled workers means construction projects may not be hitting the mark in terms of quality and craftsmanship, leading to the greater likelihood of an insurance claim.

It’s already happening, observes Darren Tasker, head of energy and construction in Canada for Allianz Global Corporate & Specialty.

“We saw it from the insurance side with the amount of claims increasing significantly,” he told Canadian Underwriter. Claims related to faulty workmanship and design defects ranked Number 1 in terms of frequency.

“In the construction space, these are the most prevalent types of losses that we see in Canada,” Tasker reported. “That, and water damage are probably the (Number) 1 and 2 perils we see the property side of construction.”

Tasker thinks the claims increase can be explained by “just the sheer volume of construction activity, and the lack of skilled labour to do [the work].”… [Read More]