This week we're featuring a dicussion with Cady Sinks, Assistance Vice President, Contractors Division, at Victor O. Schinnerer & Company.
We spoke with Cady about the contractor industry in general, as well as the products Schinnerer provides, including a program for artisan contractors that was launched the beginning of this year.
Cady joined Schinnerer nearly eight years ago. She began her career with the Chevy Chase, Maryland-based firm in the Technology division before moving to Contractors. Schinnerer is one of the largest and most experienced underwriting managers of professional liability and specialty insurance programs in the world, and has been offering solutions for contractors since 1991.
Annie George (AG): Are you seeing an improvement in the contractor industry for 2012 with the economy beginning to show some positive turns?
Cady Sinks (CS): “When I first started in our Contractors Division about six years ago, the economy was doing well, and the industry was experiencing growth. In 2007-2008, things began to shift. We started to see contractors going out of business and experiencing a dramatic drop in their billings. It became a difficult market, with a tremendous amount competition among contractors. To cut down on their expenditures, some opted to go bare when it came to Professional Liability, as they considered this a secondary coverage they could go without. Since this coverage is contract-driven, when the project was done, they would let their Professional Liability lapse.
“In the last year or so, however, things have started to trend upward. Contractors in hard-hit places such as California and Georgia are beginning to see an improvement. In fact, for 2012, we’re expecting some growth. Contractors are taking on more projects – whether it’s from new construction projects, renovations, or public programs. We’re not quite out of the woods yet, but it is getting better.
“Additionally, contractors are understanding they do have a Professional Liability exposure that requires insurance protection – that going without coverage opens them up to a great deal of risk.
“In 2011, we launched a new Professional Liability and Pollution Liability form designed specifically to address a contractor’s needs. Our premium level is up 24% from this time last year. This is primarily due to the fact that the form has significant enhancements to meet the requirements of contractors, which is attracting new business for us.”
AG: What makes your policy form different?
CS: “On the Professional Liability side, we provide rectification coverage. This is basically first-party coverage in the event of a design defect circumstance. For example, let’s say an architect on the contractor’s staff designs a retail shop. In the course of the construction process, the contractor realizes there is a design error. Now, the contractor is in a position in which a potential for a lawsuit and claim exists because of the design defect. Rectification coverage enables the contractor to come to us with the design error and under the policy receive the money needed to rectify the situation before any claim is filed by a third party. This allows the contractor to prevent potential lawsuits, quell the possibility of an adversarial relationship with the client, and resolve the situation quickly.
“On the Pollution side, we provide proactive coverage for mold, and coverage for transportation pollution liability and non-owned site disposal.”
AG: In January you came out with a new product for Artisan Contractors. Tell us about this.
CS: “Our Artisan Contractor E&O and Pollution Program provides coverage for faulty workmanship, design, and products. It includes coverage for: faulty workmanship, negligent errors or omissions by the contractor or on his/her behalf in the design of the work, and the use of defective materials or products in the work performed. This policy speaks to any artisan contractor – electrical, mechanical, plumbing, etc. – because every contractor could potentially have a workmanship issue during the course of construction.
“What’s more, very few insurance carriers offer this coverage or they offer it to brokers on a selective basis. Written on CNA paper, our program is open to all brokers across the United States.
“The Pollution portion of the policy is just as broad as our other program, providing proactive coverage for mold and for transportation pollution liability and non-owned site disposal.”
Schinnerer provides risk management services as part of their Contractor programs, including a quarterly newsletter called Constructive Comments. The newsletter includes new trends in the industry and information about claims.
For more information on Schinnerer’s Contractor programs, please contact Cady Sinks at (301) 951-6939, or via email at Cady.M.Sinks@Schinnerer.com.
Also, visit www.schinnerer.com/Contractor for additional information.