A very large subcontractor was interested in having their excess liability limits separate for jobs performed under a wrap-up arrangement. The Lockton team achieved this structure with the lead umbrella carrier, subject to an Anti-Stacking endorsement which effectively eliminated coverage for about 40 percent of their jobs. The Lockton team was also able to persuade the insurance carrier to structure the subcontractor’s sublimits to drop down whenever the lead carrier was conflicted with their Anti-Stacking endorsement.

A large apartment owner/developer approached Lockton to structure an apartment project with the option at a later date to convert and sell as condominiums. Lockton successfully negotiated a Wrap-Up insurance program that allowed the owner this option.

The unique cost structure was based on the reduced apartment construction liability premium with the option up to 36 months after completion of the project to convert to condos. At that time, an additional premium would be paid initiating a new completed operations extension equal to the state statute of repose.

This condo premium deferral gave the owner the benefit of cash flow and assignability when selling to a new owner providing coverage to the new owner as well as the former owner. It also allowed the owner to time the volatile residential market while taking advantage of the increase in rental income property. The owner and their equity partners called it one of the most innovative and creative programs they’ve seen in the current insurance market.

While most contractors are trying to tread water during the recession, this concrete subcontractor experienced rapid revenue growth. As Lockton began to review the prospect’s policies, the team found a growing company with insufficient coverage, including theft exclusions and expensive equipment left uninsured. Lockton fixed each of the gaps while keeping the total cost of risk for the client flat. Now, the concrete contractor client is implementing a loss control plan to reduce its risks for the long term, so it can keep growing.

A design-build firm had more than $40 million in collateral posted with its incumbent carrier when Lockton was designated the broker.   The collateral situation was in shambles despite our client’s investment-grade credit profile.  The client had never been told by its prior global broker that paid loss credit was deserved.  No broker had ever produced analysis substantiating the collateral need.  Furthermore, the carrier was holding excess collateral due to a dispute about outstanding audits.  Lockton dug in, immediately involving key decision-makers from the carrier (some of whom the client had not spoken to in years) and beginning work to bring the account back to market-efficient level.  Eventually, after number of meetings, phone calls, and analyses, the tireless efforts bore fruit.  Despite the additional exposure of adding another year to the program, the client saw a collateral return of nearly $15 million at their next renewal.

A large construction company suffered from a substandard surety program due to poor distribution and miscommunication of information to their surety. The company turned to Lockton because they were restricted in taking on new work and potentially faced financial risks to their company. After analyzing the client's current program, Lockton restructured and presented a program with more bonding capacity. The client benefitted from improved management of their surety program and better communication with their surety underwriter. The client significantly increased their capacity, from a previous limit of $10,000,000 to now having bonded a single $80,000,000 project.

The risk manager of a large heavy construction and fabrication company needed to quantify the performance of their risk management program and increase overall efficiency. Based on behavioral safety and productivity observation, Lockton developed and implemented a job planning process for the client. The new changes reduced incurred claims costs from $1.37 per man hour to $.17 per man hour. It improved bid competitiveness due to $1.20 cost per man hour reduction in labor costs and improved the experience modifier from .90 to .42. The client also reduced payroll expenses by $30 million by improving the productivity 10 percent.

A large construction and fabrication client of Lockton wanted to buy a large competitor. Lockton worked with the client to develop and implement many improvement processes. The client saw an immediate reduction in injuries. The acquisition was blended into the client’s operations with no increase in claims costs per man-hour. Overall, the changes eliminated the potential annual recurring cost of $6 million in accident costs each year and netted $30 million over five years in accident cost reduction.