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The construction industry is evolving. The introduction of new building materials in the last two to three years such as modified and manufactured wood, insulated metal panels and insulated concrete, can make placing policies a little complicated. The introduction of these materials impact building design and engineering processes, especially since some of them are nascent and pose potential risks. This is why it is now more important than ever to consider how these changes not only affect policies and pricing but also demand a higher level of expertise from insurers and brokers.
What are the risks?
For many new technologies introduced in buildings and other construction projects, the risks are often discovered after the first claim has been made. A good example is plastic or “Kitec” plumbing. Due to its relatively cheaper price, more and more developers used Kitec plumbing throughout the mid ‘90s up to 2007 in many residential buildings. However, the product was discontinued once it was found to corrode at a faster rate than regular copper piping. This has resulted in many burst pipes, unhappy homeowners and, of course, unwanted claims. Kitec plumbing is actually still in use in many condominiums with some boards scratching their heads on how to replace the pipes or minimize the damage they would eventually cause. It will still no doubt be the source of more insurance claims going forward.
Another example is modular or prefabricated buildings. Modular buildings, mainly built as houses, are designed to reduce energy use by approximately two-thirds, since they are built in a factory first and then shipped to the preferred location. As such, they can be constructed for a fraction of the price of typical homes. However, modular homes are often built with hidden interior cavities that make it difficult to control the infiltration of outdoor air. As such, this air travel can cause physical damage and mold growth on wood framing and interior drywall, resulting in higher proclivity for water damage than a traditionally built home.
The list goes on. For instance: insulated metal panels, which are increasingly being used in construction projects, are cost-effective and easy to install. However, proper caution must be taken during installation and in the maintenance period, because these panels pose a fire risk. These are only a few of the risks that brokers need to be aware of when writing construction business.
The role of the broker
With the construction industry evolving at its current rate and with new technologies offering both efficiencies and potential risks, the broker’s role is consequently getting increasingly crucial as well. Brokers now operate in a new playing field where construction clients expect deeper expertise, to help them understand and plan around the risks arising from new and changing building materials and
processes. Therefore, brokers who take the time to understand their clients’ needs and balance them against the potential risks and advantages of various solutions in the marketplace will find themselves in an advantageous position.
Enter Keystone
RSA’s Keystone program is a unique and exclusive program that provides an extensive suite of resources for brokers to equip themselves with the right expertise and adapt quickly in this dynamic environment. Through the program, Keystone brokers have access to a Key Account Manager (KAM) who can provide insight on industry and sector trends, that will help brokers meet and exceed the expectations of their clients and grow their mid-market book of business.
To learn more about how to become a Keystone broker, visit rsabroker.ca/keystone.
