Navigating Insurance and Surety in Rocky Mountain Construction Key Insights for ABC Members BY JESSICA RICHARDS, AFSB, ACCOUNT EXECUTIVE OFFICER, TRAVELERS The construction industry in the Rocky Mountain Region is as dynamic as the terrain itself, with Colorado and Wyoming serving as key hubs for infrastructure development and growth. From the bustling urban centers of Denver and Colorado Springs to the expansive energy fields in Wyoming, construction companies face unique opportunities and risks. For ABC members, understanding how insurance and surety intersect with construction is essential for safeguarding projects, ensuring compliance and driving business success. Challenges in the Current Insurance Market in Colorado and Wyoming The insurance market in Colorado and Wyoming has faced growing challenges, particularly for construction companies. These include: • Increased Premiums: Rising insurance premiums across the U.S. — driven by inflation, natural disasters and increased claims — are affecting our region as well. For contractors, this means higher upfront costs, which should be factored into project budgets and bids. • Weather Risks: Both states are vulnerable to extreme weather events — hailstorms, snow and flooding — which require insurers to adjust premiums and policy terms to account for these risks. • State-Specific Regulatory Differences: Colorado and Wyoming have distinct laws regarding construction insurance, particularly workers’ compensation. Contractors working across state lines must navigate these differences, requiring a nuanced understanding of local laws. Insights into the Contract Surety Market Beyond traditional insurance, surety bonds play a vital role, particularly for those involved in public or large-scale private projects. Surety bonds provide assurance that contractors will fulfill their obligations, safeguarding project owners — and, in the case of public projects, taxpayers — from the risks of non-performance. In our region, the surety market has experienced several notable trends: • Steady Demand for Bonds: With growing infrastructure, energy and commercial developments, the demand for surety bonds remains strong. In Colorado, expanding urban centers like Denver and Colorado Springs drive the need for performance and payment bonds, while Wyoming’s energy sector fuels demand for surety in oil and gas projects. • Tightening of Underwriting: Due to an increase in defaults and claims, surety providers are becoming more selective. Contractors with strong financials, solid project backlogs and proven track records are more likely to secure favorable bond terms. • Market Opportunity for ABC Members: Contractors with a history of successful projects and sound financial practices are well-positioned to benefit from favorable surety terms. ABC’s educational programs and networking opportunities can help CONSTRUCTION ADVOCATE 23
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