Gallagher McIntyre

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Case Studies

Building Contractor – Improved Coverage & Premium Savings

A building contractor specializing in the construction of large “Big Box” retail stores, warehousing and airplane hangar-type structures.

Business Situation/Challenge

This McIntyre Group client is a rapidly growing specialty building contractor with integrated trades enabling site preparation, concrete work, steel fabrication and erection, crane operations, sheet metal construction and heating, venting, and air conditioning to be performed by subsidiary or commonly owned companies.

This contractor had grown rapidly during the four years preceding our involvement, purchasing a steel fabrication facility, a crane rental operation and an HVAC company. Their insurer had an appetite for all of these operations, except the crane rental sister company, and issued policies that excluded this entity and any associated liability arising from the use of cranes.

Separately, Commercial General Liability insurance was placed for the sister company that rented cranes informally to the building contractor sister company, but this policy was not included in the Building Contractor’s Umbrella. The lower limits of coverage for the related crane rental company did not include coverage for the building contractor, and the coverage for the building contractor companies excluded crane operations.

Gallagher McIntyre identified that there was no contract in place between the related companies requiring indemnity or additional insured status. The crane rental between the two entities was more of an internal accounting transaction. We identified a significant uncovered liability for the building contractor should a claim arise from jobsite supervision of the crane rental company that caused injury or damage. If the building contractor were sued, its policy would exclude the claim as it arose from the operation of a crane that was excluded. If they looked to the crane rental company’s policy, there was no coverage for them under that policy as there was no contract in place requiring additional insured status.

Solution

Gallagher McIntyre resolved the issues by:

  • Consolidating the insurance programs with an insurer who had an appetite for all of the insured’s subsidiaries
  • Encouraging the insured to enhance its Crane Rental Agreement with respect to external transactions

Benefits

By consolidating the separate policies under one master program, Gallagher McIntyre accomplished the following:

  • Eliminated a significant uncovered exposure to loss
  • Improved coverage for the crane rental company by extending the umbrella coverage to include their operations
  • Provided consistent coverage over all entities
  • Eased the administrative burden created by the need to manage separate policies expiring at different times
  • Saved the client premiums by leveraging the buying power of the entire family of companies under one consolidated program with a common effective date

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