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What Roofing Contractors Need to Know About Property & Casualty (P&C) Insurance

What Roofing Contractors Need to Know About Property & Casualty (P&C) Insurance

by Marie King

Claims form

Your roofing insurance provides general liability and workers compensation coverage, which protect your business and employees. However, you get paid through the property and casualty insurance that your clients’ carry.

According to an article on Marsh. com “10 Years After Hurricane Katrina: Lessons in Preparedness, Response, and Resiliency”, changes over the past 10 years in the property and casualty insurance industry were all influenced by Hurricane Katrina, as well as Hurricane Ike and Superstorm Sandy. The report reviews how property insurance, claims, analytics, risk engineering, and crisis management have changed since Katrina—and explains what has been learned from Katrina and other disasters about protecting people, property, and profits.”

Five Major Changes

In an article entitled “5 Major Changes in P&C Insurance Since Hurricane Katrina” published by Property Casualty 360. These five major changes in Property and Casualty Insurance were listed:

  • Catastrophe Modeling
  • Policy Wording
  • Commercial Policyholders and Claim Teams
  • Risk Engineering
  • Crisis Management and Business Continuity

These major changes in P&C insurance directly affect what compensation you receive for a roofing job. Understanding these major changes can safeguard your business and its profits.

Catastrophe (CAT) Modeling

According to the information in “5 Major Changes in P&C Insurance Since Hurricane Katrina”:

“Before Katrina, the modeling of catastrophe exposures was typically done on aggregate portfolios for reinsurance purchasing. Modeling was a “nice to have” item, and was not considered from a per-risk standpoint. Since Katrina, CAT modeling has generally been used on a per-risk basis.

Today, virtually every risk with catastrophe exposure is run through one or more models to consider potential loss scenarios. For an insured, understanding CAT exposures is a key to negotiating with insurers.” For a roofing contractor, having an in-depth understanding of CAT Modeling, can help you get bids, increase profits, calculate business risks and reduce your company’s liability.

Policy Wording

“One of the lessons learned from Hurricane Katrina is the importance of understanding what your insurance policy says and how it will respond to a claim. Katrina claims disputes led insurers to tighten their policy wordings, particularly around the flood peril. After Katrina, many businesses were surprised to learn that, despite having windstorm coverage, they weren’t covered for storm surge—responsible for most of the damage in New Orleans and surrounding areas,” states Jayleen R. Heft of PropertyCasualty360.com.

As a roofing contractor, you need to be able to help your clients interpret the language in their P&C policies. The tightening of wording policy doesn’t necessarily mean that all “inclusions” and “exclusions” will be clearly categorized under those headings in the new policy language.

It’s imperative that you understand what your client’s insurance covers before you start a roofing job!

Commercial Policyholders and Claim Teams

Claim Teams have worked at having closer ties and being more accessible to commercial policy holders since Hurricane Katrina. However, claim teams work for the insurance companies, and their job is to help the insurance companies save money. Part of your job is to share your expertise in roofing with your clients and ideally claim teams. As a reputable roofing contractor, you not only want to install a roof that is eye-catching, but more importantly one that will be able to withstand the recurring storms in your area. You need to convince claims teams that a more expensive, structurally-sound roof will save the insurers more money in the long run.

Risk Engineering

According to Heft:

“Katrina increased awareness of the risks associated with property locations. Property risk engineering looks at the design and construction of physical assets for the purpose of better protecting those properties and the people who occupy them. Katrina forced thousands of businesses to shut down and New Orleans’ failed flood protections came under scrutiny.

Manufacturers and other businesses started paying closer attention to their proximity to waterways following Katrina.”

Crisis Management and Business Continuity

Heft goes on to say:

“There have been changes in both government and private industry disaster planning since Katrina. For example, the National Response Framework now defines how all federal agencies will respond to emergencies. According to a Federal Emergency Management Agency (FEMA) report, two-thirds of businesses checked and updated their disaster recovery plans after Katrina.”

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