Insurance Market
Why roofing contractors are seeing pressure on umbrella capacity
Excess markets have narrowed the terms they offer roofing risks. The contractors holding their limits are the ones who can document subcontractor controls and driver quality.
Roofing contractors renewing excess programs are encountering a familiar pattern: the same limit costs more, fewer markets will quote it, and the layers above the lead umbrella are assembled from smaller participations than they were a few years ago.
The cause is not roofing alone. Auto severity, litigation funding and construction defect development have made excess casualty a difficult line across contracting. Roofing sits at the intersection of all three.
What excess underwriters are actually evaluating
Lead umbrella underwriters rarely decline a roofing account on the schedule of underlying coverage. They decline on the quality of the information behind it.
- Subcontracted labor as a percentage of cost, and the agreements behind it
- Additional insured and primary and noncontributory wording actually in force
- Driver selection standards, MVR criteria and post-accident procedure
- Loss development on prior auto and liability years, not just incurred totals
- Completed operations and water intrusion history on occupied buildings
The practical effect on limit strategy
Contract requirements have not moved down to meet the market. General contractors and owners still require limits that many roofing contractors now assemble across three or four carriers.
That structure is workable, but it changes how a program should be marketed. A submission built late, with incomplete subcontractor data, tends to produce quotes with sublimits, higher attachment points or exclusions that are discovered at claim rather than at binding.
Capacity is available. It is allocated to the accounts that can document how the work is performed.
What we recommend
Begin the excess conversation at least 120 days before renewal. Reconcile subcontractor cost to the agreements and certificates on file. Be prepared to explain loss development rather than present a loss run without context.