While not related specifically to EIFS in Toronto, some of our American readers (and contractors) may find this information worthy of a quick read.
A southeastern based company firms works to bring its customers the strongest EIFS insurance to the table.
In 1999, Huckaby and Associates began working with specialty stucco and EIFS applicators who were finding it difficult and sometimes impossible to procure general liability insurance that would include coverage for the application of EIFS. We saw the conventional or standard insurance market discontinue writing any liability protection for the application of EIFS for our clients. The availability dried up very quickly all over the Southeastern U.S. and many applicators were searching everywhere for something that would satisfy their needs for protection.
In 2000, a relationship was established with the Carolina Lathing and Plastering Contractors Association to help its applicator membership find the best possible option for their liability insurance needs in a very difficult insurance market. The market for buyers became more difficult in 2001 following Sept. 11 and the significant losses incurred by the insurance industry—along with the high level of uncertainty surrounding our overall financial markets at the time.
By 2002, Huckaby and Associates was working with EIFS applicators all over the southeast to provide general liability and umbrella policies that included coverage for EIFS. We worked intensely with the few insurance carriers available to provide our clients with the best combination of protection, contract compliance and price. That approach was difficult because we had a poor buyer’s market at the time. The few insurance companies available were charging rates four to five times what the client had ever paid in the past. So, the rates were difficult and the coverage always contained cumbersome exclusions that limited the type of EIFS work that could or would be covered by the liability policy.
DECREASED RATES
Over the last four years, we have been able to steadily decrease the rates while at the same time expanding the coverage to different occupancies and types of construction that had been previously unavailable or excluded. More options became available to our clients because there were more insurance carriers who had the ability to include EIFS coverage and were becoming more comfortable working with our clients because of our knowledge and experience in the industry.
One of our biggest concerns when working with a client is to help them satisfy the contractual requirements of their general contractors and owners. Almost all of the contracts our applicator clients enter contain requirements for common risk transfer mechanisms. Many EIFS insurance options introduced have not been able to meet these risk transfer requirements that can cause the applicators problems in being awarded work and getting paid for their work.
We have taken a very active role in meeting with and talking to our clients’ general contractors and owners to assure them that our clients are bringing them the best liability insurance coverage available to an EIFS applicator. By working with each client locally in our region, we have been able to establish a comfort level with several insurance carriers because they depend on us to bring them the best applicators. We firmly believe this is the best approach for the client and the insurance carriers. Our group of EIFS applicator clients gets larger every year and the number of insurers who work with us exclusively continues to grow.
INSURANCE STRATEGY IS CREATED
Specialty Stucco Insurance Strategy is a concept that takes Huckaby and Associates’ regional marketing philosophy, experience and industry relationships partnered with several exclusive A-rated by AM Best insurance carriers to offer the same products to applicators in other regions of the country. Swett and Crawford, the nation’s oldest wholesale insurance broker, developed the Specialty Stucco Insurance Strategy to provide experienced insurance brokers who have an interest in working with EIFS applicators a viable and competitive insurance option for its clients. Huckaby and Associates has established a successful blueprint in our territory: the Carolinas, Georgia, Alabama and Tennessee, which SSIS hopes to duplicate in other regions of the country.
The insurance carriers we work with find our approach attractive for several key reasons. First, they like an experienced local broker who knows the applicator’s marketplace, contracts, types of work and the applicable construction laws and legal environment. Second, the carrier desires a controlled flow of applicators that meet their given criteria. The criteria could be volume, commercial work vs. residential work, type of products, experience or training to name a few. Our insurance carriers give us the exclusivity because they depend on us to determine the client’s needs before we begin any dialogue about coverage or pricing. They depend on us to work with the client to identify any past work or upcoming projects that need to be addressed.
For example, a client of ours may decide that they would like to perform the EIFS application on a condominium project. Our carriers want us to identify for them the nature of the project, the systems and controls to prevent moisture intrusion, along with the contractors experience on that type of project. Once we have established the right process is in place for the project, then we can add the project to be covered by the liability insurance policies.
The applicator as our client benefits greatly from this exclusive network arrangement. The obvious reasons are a much better coverage and pricing structure that meets all of their contractual obligations with their general contractors and owners. But, our clients benefit from this approach because they have very little fear after working with us for so many years that we will lose our products or ability to insure EIFS applicators. We are not tied to one particular insurance carrier, industry association or national program. Instead we work with a network of insurers that allow us to react to the clients needs instead of forcing them to buy a product and adjust their business accordingly. Our network creates true competition for our client’s business and enables them to move nimbly to address their changing needs. The goal of SSIS is to encourage other insurance producers in different regions to use this proven distribution blue print to work with EIFS applicator clients in their regions.
WHY SSIS?
The SSIS allows applicators access to exclusive liability insurance designed specifically to meet their needs while maintaining a relationship with a regionally local insurance broker. The applicator can obtain coverage for all commercial EIFS application and most residential application. The product includes all of the risk transfer endorsements required by general contractors and owners along with a built in mold coverage. The strategy utilizes multiple AM Best A-rated insurance carriers competing for and reacting to the needs of the applicator.
The strategy has also developed a general contractors EIFS coverage buy-back that allows general contractors the ability to purchase EIFS liability insurance. The coverage for general contractors will mandate that EIFS work must be performed by an SSIS-insured applicator. This allows applicators the flexibility to offer their general contractors EIFS coverage of their own to complement the applicator’s own insurance for a project.
Swett and Crawford—along with Huckaby and Associates—have combined both organizations’ resources to bring a strong insurance product for EIFS applicators, along with a strong national network of professional experienced insurance brokers. We have worked closely with The EIFS Industry Members Association to provide our underwriting carriers access to the very positive results of the U.S. Dept. of Energy and EIMA joint sponsored study performed at the Oak Ridge National Laboratory. EIMA has also helped us to disseminate and understand the new 2009 building codes that for the first time provide specific code standards for EIFS. Our insurance carriers see the EIMA study and recent code regulations as even more proof that this is a viable cladding and whose market share will continue to grow.
The SSIS is already being distributed in South Carolina, North Carolina, Georgia, Alabama, Tennessee, Texas, Florida, Virginia, Maryland, Kentucky, Ohio and Indiana. We depend on our long-term relationships with the EIFS industry and its distribution channels along with local and national trade associations to help us locate quality applicators interested in our services.
