A new client was introduced to us by a friendly competitor who needed help with a Builders Risk placement. He knew we were experts in construction and trusted us to do the right thing. When presented with the facts, we knew the placement would be out of the ordinary and a challenge.
The client was a well-recognized non-for-profit institution dedicated to research and education on issues of government, politics, economics and social welfare. The project was the renovation of a historic building located near DuPont Circle built in 1917. The project included adding a second basement level below the first and adding a Penthouse level. A large first floor auditorium was added and the entire structure was to be completely restored to its original condition. Construction costs were expected to be $46 million. Clearly, an “off the shelf” Builders Risk insurance policy would not meet the complex needs of this particular project.
The challenge was to write a policy that would respond to the historical nature of the project. A typical builders risk policy would restore a loss with “like kind” materials. The building was made of plaster and limestone. Like kind could have meant drywall. The client requested we find a policy that would respond to “historical” replacement cost. The IA, a Marsh & McLennan Agency LLC Company underwriting team worked with one of our major insurance company partners to manuscript a policy to address the unique building materials involved. This was an involved process which included site visits and review of building specification.
With the cooperation of all parties involved; the owner, general contractor, IA, a Marsh & McLennan Agency LLC Company and our Insurance Company partner the policy was written correctly and the project has been a success.
Information about the Author: Steve joined Insurance Associates, a Marsh & McLennan Agency LLC Company in 1987, and is currently the firm’s President. In addition to leading the company, he serves as the Account Manager for several large construction clients. Steve began his career with the Fireman’s Fund Insurance Company as a surety underwriter in 1980. He is a Past Director for the National Association of Surety Bond Producers and is a current member of the Surety Information Office Policy Board and the Montgomery County Chamber of Commerce.