One of North America’s leading insurers in Excess & Surplus, Zurich North America’s Excess & Surplus (E&S), has increased its builders’ risk coverage from $50 million to $75 million on a project-by-project basis, responding to a sharp rise in demand for mass timber coverage from wholesale distribution partners.
The move reflects the rapid growth of large-scale commercial and mixed-use projects utilising mass timber — a sustainable alternative to steel and concrete — and the need for higher coverage limits to match the scale and complexity of these builds.
“We’re seeing significant growth in the number and scale of mass timber projects, and our wholesale partners need the flexibility to place larger, more complex risks,” a Zurich spokesperson told The Insurer earlier this week. “Increasing our builders’ risk capacity to $75 million per project allows us to better support that demand while maintaining the underwriting discipline and risk engineering expertise our clients expect.”
Mass timber construction has gained momentum in North America in recent years, with Wood Central reporting that more than 2,000 mid-rise and high-rise mass timber buildings have been designed, under construction, or constructed across the United States, with the number of buildings growing by 114% during the COVID years alone. However, it also presents unique underwriting challenges, including fire risk, moisture management, and ensuring compliance with rapidly changing standards.
Last year, Wood Central reported that global insurers are scrambling to introduce new policies to meet the demand for mid-rise and high-rise buildings, with developers increasingly looking at mass timber due to its growing price competitiveness, speed of construction, and prefabrication and assembly systems. It comes as risk managers and brokers are now working with the industry to develop “tailor-made” policies to help drive the adoption of new construction systems and technologies.
That is according to Michael Bruch, global head of Risk Advisory Services for Allianz Commercial, who said actuaries are working on risk scenarios ahead of a tidal wave of new timber builds hitting the market. “In any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, as well as bringing benefits, and mass timber is no different,” Brunch said, who added that Allianz’s mass timber report, the first of its kind, addresses many of these scenarios. “The good news…is that you can manage these risks,” he said, adding that fire and natural disasters are among the top risks for the insurers underwriting assets.
- To learn more about insurance for mass timber buildings and why global insurers are now developing tailor-made packages for the industry, click here for Wood Central’s special feature from last year.
