Residential New Construction Contractor/Pulte Homes

[ParkerH]

I lost a $50,000 account today to some competition that I am unaware of. My client is a middle market residential landscaping contractor who does all new residential construction for national home builders such as Pulte, DR Horton, etc. My renewal CGL quote was around $19,000 and we lost the account due to a "special program" that had the GL at $9500. Insured says it was designed by Pulte homes, and our MGA underwriter said she had heard of a Pulte captive in the market place writing coverage for Pulte contractors, but that the coverage was ONLY good on PULTE work. This would be a big problem for my guy, and I am almost out of time. No telling where this other guy even came from as they never requested loss runs, etc.. and my guy was just non-renewed for bad payment with prior standard market, adverse D&B, etc. and had to go to the E/S market.

Has anyone heard of this Pulte deal??
Thanks
Parker H
Austin TX

[InsMgmt]

Haven't heard of Pulte, but I gotta ask...why are you so concerned about an account with this profile? "...and my guy was just non-renewed for bad payment with prior standard market, adverse D&B, etc. and had to go to the E/S market." Most of the markets I am dealing with don't non-renew for a single bad payment, which suggests that this guy has a history.

If his business is so poorly managed, I'd say he'll be back, just as soon as the Pulte captive kicks him to the curb. In the meantime, why not just get on down the road prospecting and writing those accounts you can close.

Just a thought.

[ParkerH]

I'm with you on that one, I was not too sad to see him go, however I sure don't like to get beat and wouldn't want this to happen again on one that is worth keeping so I'm checking into it. The guy had some slow pay due to these large home builders slow-paying their subs, but still it was his fault. You would think that a 15 yr business with 5.6mil in receipts could handle the accounts payable... Thanks

[dudeman]

Sounds like an OCIP. Which means he has 1) no coverage for work performed for anyone else and 2) no coverage once the OCIP timeline ceases.

But, if payment was an issue, get the monkey off the back.

[Insurance_Family]

This is a little beside the point, but since we are talking insurance and contractors has anyone heard of Ironshore Specialty Insurance Co.? We just got a quote from them for a sewer, storm and drain contractor that seems to good to be true. I have requested a copy of the AI, etc but I was wondering if anyone has experience with them? Thanks!

[ParkerH]

Never heard of IronShore, and we write a lot of construction business mostly standard market admitted stuff, and some surplus as well. You never know - We get quotes from carrier I've never heard of, like the one on this risk that I got beat on was Gotham?? Hadn't heard of them but it looks to be solid A, 8 paper. You might try CNA or Zurich for your sewer guy?

[netbiz1]

We do quite a bit with Ironshore across the US. I'm a Specialty Broker with a focus on construction and environmental. I'm happy to assist and/or point you in the right direction, whether you go through me or not. Ironshore is a 2 yr old player originating out of Bermuda. Paper is stable. Recently, Keven Kelly.....formally of Lexington for many years.....made the jump over to there. Rumors have it that the rest of his crew will be following. The 'Iron' companies are focused on Construction, Healthcare/Medical, and Professional Liability.

[Insurance_Family]

Thanks for the 2 responses. I did noticed that the quote included an ai but it was for ongoing ops only so I asked for completed ops and they said they could do it. Haven't seen form yet, but looks okay to me. Thanks for your help!

[bjdette21]

I lost a $50,000 account today to some competition that I am unaware of. My client is a middle market residential landscaping contractor who does all new residential construction for national home builders such as Pulte, DR Horton, etc. My renewal CGL quote was around $19,000 and we lost the account due to a "special program" that had the GL at $9500. Insured says it was designed by Pulte homes, and our MGA underwriter said she had heard of a Pulte captive in the market place writing coverage for Pulte contractors, but that the coverage was ONLY good on PULTE work. This would be a big problem for my guy, and I am almost out of time. No telling where this other guy even came from as they never requested loss runs, etc.. and my guy was just non-renewed for bad payment with prior standard market, adverse D&B, etc. and had to go to the E/S market.

Has anyone heard of this Pulte deal??
Thanks
Parker H
Austin TX

As I've search from this site, Pulte Home, Inc. is a Bloomfield Hill, MI based company founded by Bill Pulte. Announced April 8, 2009, Pulte Homes has agreed to acquire Centex - creating the nation's largest homebuilding company in a stock transaction worth $3.1 billion, including $1.8 billion of debt. The companies said that, after the merger, Pulte shareholders will own 68% of the combined company, and Centex shareholders will own 32%. Pulte Company has three main parts to its business model: Sales, Construction, and Customer Service. I will suggest, to talk for that guys for a deal.

[kevinraz]

That program must be an OCP (or OCIP). Owners and Contractors Protective. That is job or client specific coverage and is not ISO standard stuff. The GL is cheaper because it limits his work to only Pulte homes and also does not have as many of the provisions as a standard GL policy does.

It's really designed to protect the big company first, then the smaller entities. The parent company will have great coverage and your client might not have very good coverage.

Signing on to an OCP requires a risk manager who is willing to read the policy and understand it. He can drool over the reduction in premium but he'll end up bare naked on a claim away from a Pulte/Centex project.

He also won't be able to get a legitimate cert if anyone else wants one. Tell him to ask the agent "what happens when Walgreens wants to be added as an additional insured since I'm cutting their lawn". He'll most likely hear "can't do that".

To everyone who says to get rid of the client: while I see your point it's hard to find clients these days. Payrolls are dropping, firms going out of business and agents are losing income with the continued soft market. If you mainly write contractors,formerly a gold mine if you had a market, your agency is in the hurt locker these days.

Not all of us have the option of only keeping our absolute best clients. This account is probably $7,500 in revenue, might as well try to keep it.

[yoyowordup]

That program must be an OCP (or OCIP). Owners and Contractors Protective. That is job or client specific coverage and is not ISO standard stuff. The GL is cheaper because it limits his work to only Pulte homes and also does not have as many of the provisions as a standard GL policy does.

OCP - Owners and Contractors Protective. OCIP - Owner Controlled Insurance Program (aka Wrap). Not the same thing.