As an insurance agency servicing construction businesses in Austin and across Central Texas, we have firsthand experience in observing how insurance needs and purchases can significantly differ based on the specific niche of a construction company. While we’ve always had anecdotal evidence to support this, there needs to be more data to validate our observations further.
However, the release of the Assurex Global 2023 Construction Benchmark Report has shed more light on this topic, offering in-depth insights into the insurance purchasing decisions made by 1,624 construction companies spanning five unique specialties, all categorized by their specific NAICS code.
The specialties featured in the report include:
- General construction (NAICS 2361XX and 2362XX)
- HVAC, electrical, and plumbing (NAICS 2382XX)
- Highway/underground construction (NAICS 2371XX and 2373XX)
- Trade contractors (NAICS 2381XX and 2383XX) – which comprises foundations, exterior finishes, framing, masonry, and more
- Other specialties (NAICS 2389XX) – an “all other category”
The data confirms many known differences in the industry. For instance, payroll as a percentage of revenue can fluctuate greatly, with highway and heavy contractors typically having the lowest payroll percentage and the HVAC/plumbing group having the highest. The degree of contractor’s equipment coverage also varies, with the highway/underground sector usually possessing the highest coverage limits.
The report also reveals subtler yet intriguing disparities between specialties:
- Contractor size demonstrated significant variability across specialty areas.
- Excess liability limits have seen a marked rise compared to the previous year.
- Excess liability rates and premiums increased moderately to significantly, depending on the class of the contractor.
- The limits for the contractor’s equipment were lower than anticipated. Therefore, despite the highway/underground category having the highest values, these numbers seemed relatively modest.
- The proportion of companies opting for contractor’s professional liability saw an uptick compared to the last survey.
- The percentage of firms investing in environmental impairment liability coverage has also increased.
Are you a construction business owner in Austin or Central Texas interested in learning more about how these insights could affect your insurance decisions? Contact our team at Watkins Insurance Group for further details.
