Economic Stimulus Package Promotes Infrastructure Projects; Need for Construction Insurance
This is positive news for construction contractors, who may be in a position to execute the "shovel-ready" infrastructure projects expected to get underway with this government funding. These projects are expected to be under contract within 180 days--and will undoubtedly put people to work.
This expected influx of construction work will also give way to the need for insurance coverage and risk management services for these upcoming projects. This is especially true since the construction industry has seen tremendous advances in procurement processes allowing for greater use of alternative project delivery systems such as Design/Build.
Liberty Mutual, which has been involved with the construction industry since its founding in 1912, has been focusing recently on the expected push in rebuilding the nation's infrastructure. Last year, Liberty Mutual began working with government transportation specialists to understand and scope out opportunities in the infrastructure arena, including the identification of how funds are allocated to states for infrastructure projects, which states have the greatest underlying needs, and which states were most likely to attract government funding.
Although much has been written about selecting projects to create jobs, the stimulus package relies on the existing planning process to determine which projects are eligible for funding. Any proposed project will have to be already listed on a state's transportation improvement plan in order to be eligible.
"We have consistently served the construction insurance market for decades and are constantly adapting our products and services to the times and the needs of our buyers and their brokers," says Jim Conroy, chief underwriting officer, National Market Construction at Liberty Mutual. "When the country began to develop and expand the superhighway system in the 1950s to meet the exploding need for roads to carry raw materials and finished goods to a rapidly growing industrial and residential base, Liberty Mutual was there."
Today, Liberty Mutual continues to remain on the cutting edge of providing products and services designed to meet contactors' changing needs. Liberty Mutual's National Market Construction Group focuses exclusively on insurance programs for larger construction contractors and wrap-up projects in excess of $100 million in construction value.
"We have significant expertise in the administration and service of wrap-up projects, which are particularly useful for many of the anticipated infrastructure projects posed by the economic stimulus package," notes Conroy. Wrap-ups refer to an insurance policy or series of policies written to insure all individuals or entities that work on a specific construction project, from beginning to end.
According to a series of white papers published by agencies of the federal government, ranging from the Federal Highway Administration to the General Accounting Office, wrap-ups are particularly well-suited for large infrastructure projects and can broaden insurance coverages while helping save significant amounts of money when it comes to the purchasing of insurance. In fact, the GAO report states "Officials from the six transportation projects we reviewed estimated insurance savings from $2.9 million to $265 million by using wrap-up insurance" and the costs associated with establishing wrap-up programs are eligible for federal funding.
Liberty Mutual's experience in the construction market has brought significant expertise to bear on wrap-up projects for airports, light rail, tunnels, roads, bridges and ports - particularly in the areas of underwriting, loss control and claims handling services.
"Through the decades, we have adhered to our mission of 'helping people live safer, more secure lives.' Our goal is to help prevent people from getting injured in the first place, and to get people who have been injured back to work in as strong a capacity as possible," stresses Conroy. "We strive to serve contractors and the construction industry in whatever capacity they need--by responding to the industry's changing needs and providing them with products and services that protect their business."
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May 11, 2009
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