Developers: Rising Insurance Cost? | Consider this!

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Rising insurance costs have become a significant concern, with premiums skyrocketing. Many developers are exploring new building types in order to save hundreds of thousands of dollars (or sometimes even millions!) on these premium costs!  Read on to find out more!

 

When we speak about insurance, we are mainly focused on two primary components:

• Builder’s Risk Insurance – This is a specialized type of property insurance that helps protect buildings under construction from damage from natural disasters, fire, vandalism, etc. It also helps protect materials, supplies, and equipment on-site, in transit, or at other locations.
• Commercial Property Insurance – This is insurance used to cover property and equipment from the risk of disasters such as fire, theft, and natural disasters.

What Can You Do?

Insurance is all about risk exposure. Inherently safer buildings that are less likely to suffer catastrophic damage typically cost less to insure.

One solution to consider is using cold-formed steel framed structures in lieu of wood framing.

While the upfront cost of cold-formed steel framing is most certainly higher than comparable wood framing, it’s essential to include the cost impacts on insurance, especially over the life of the building.

Insurance underwriters typically view non-combustible structures, such as those constructed with cold-formed steel, to have superior loss histories and lower risk. Consequently, often resulting in significantly lower builder’s risk and property insurance premium.

See below for a compelling example from BuildSteel.org of how cold-formed steel framing can effectively lower insurance costs. 
(Please note: Premiums and potential cost savings vary significantly by state and insurance provider)

While some types of coverage may not directly consider construction materials when pricing policies, insurance carriers associate decreased risks with steel framing. This often results in lower claim and lawsuit costs over ten years, as reflected in their underwriting process and mindset.

How Can BASE4 Help?

We understand the market and are committed to helping developers and GCs navigate these challenging times. We believe in a PRODUCT mindset—bringing standardization and manufacturing principles to the AEC industry. We help developers, general contractors, and factories find better and cheaper ways to build through innovative technology, forward-thinking design, and offsite manufacturing.

 

 

Thank you,

Blair Hildahl
BASE4 Principal
608.304.5228
BlairH@base-4.com