Times are Changing | Road to Resolution for Self-Insured Contractors by Ed Martinet

“The times they are a changing,” has been rattling around in my head recently. The times surely are, or should I say that they have been changing, and will continue to do so in the foreseeable future.

Given the current housing construction situation, general contractors, developers, subcontractors, suppliers and related companies will only survive to see another day by continuing to find ways to successfully cut expenses without detriment to their core business.

Previously, many looked to taking on all or a significant part of the liability insurance burden when rates began to skyrocket and insurance coverage was headed south. Most of the entities alive today in the construction arena are partially or completely self insured.

The challenge for these entities is that much of the expense to address claims and litigation are coming off the bottom line at a time when the bottom lines are not very good, to say the least. Construction defect lawyers and insurance adjusters have been trained to leave no stone unturned, making the other side “pay a price.” But this approach consumes insurance policies and causes insurance rates to go ever higher while providing less coverage.

The good news is that these same self insured entities can have greater input and influence into how their claim is addressed. By staying connected to their cases, they can make sure the defense team is really looking out for the company’s best interests. The more reasonable, practicable and equitable approach is to get into serious evaluation of the allegations as quickly and efficiently as possible so that the funds can be better utilized.

Ultimately, defendants – especially those who are self insured – now have a greater say in all decisions along a “road to resolution” and can benefit from a lower overall cost to resolve complex cases, should they make positive decisions. In my next blog entry, I’ll explore the ways we are doing this and how companies can take steps in the right direction.