Construction Insurance Claims History – How Does it Impact Insurance Coverage and Cost? 

In the construction industry, insurance is a critical safeguard against the unexpected. Understanding how claims history affects your insurance profile is essential for managing risk, fulfilling requirements and maintaining financial stability.

Could Filing Claims Make it Harder to Find Coverage?

Indeed, a history of frequent or high-value claims can make insurers wary of working with your business. Insurance providers assess risk based on past behavior, and a history of multiple claims may signal poor risk management or unsafe practices. This can lead to fewer insurers being willing to offer coverage.

Even if you are able to find policies, they may come with restrictive terms and exclusions. In some cases, contractors may be forced to seek coverage through high-risk pools or specialty insurers, which often come with higher premiums and less favorable conditions.

How Might Claims Affect My Rates?

Insurance premiums are directly tied to perceived risk. A clean claims history typically results in lower rates, while a record of frequent or costly claims can cause premiums to spike. Insurers may also impose higher deductibles or limit coverage amounts. Even a single large claim, such as a liability suit or major property loss, can trigger rate increases that persist for years. Additionally, insurers may apply surcharges or remove discounts previously granted for safe operations.

How Can I Avoid These Consequences?

Construction companies and contractors can take up several precautions and strategies to limit the potential impact of claims on their coverage options and costs. Specifically, the following steps should be considered:

• Invest in safety training, maintain equipment properly and implement strong site supervision protocols to limit accident risk.
• Document risk management efforts to demonstrate to insurers that you’re committed to minimizing concerns.
• Take time to consider whether every incident warrants a claim. In some cases, it’s more cost-effective to handle minor issues internally to preserve your claims history.
• Talk to a qualified insurance professional to help you navigate coverage options and negotiate the best available rates.

We’re Here to Help

Contact Home Loan Insurance today to discuss construction insurance and learn more about how your claims history may be relevant.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.