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11th March 2018
Launch of a subcontractor deductible buyback program designed to support local contractors in the US distributed through Endeavour’s local US partner via an innovative online web portal
Delegated Authority Specialist and Lloyd’s Broker Endeavour Insurance Services has announced the launch of a subcontractor deductible buyback program for large construction wraps designed to support local contractors in the US.
Distributed through Endeavour’s local US partner via an innovative online web portal, the wrap deductible buyback reduces costs for general contractors, while protecting the financial interests of subcontractors.
Wraps are complex risks often involving multiple parties, including construction contractors, developers, joint venture partners and others connected to the project. Local subcontractors can sometimes be put into a potential adverse financial position, or even lose out on projects, as a result of multi-layer deductible programmes controlled by the lead contractor, containing deductibles that are unaffordable to smaller sub-contractors.
This buyback program reduces this deductible to a more realistic level for subcontractors, while still protecting their income should issues arise on the project. Featuring follow-form wording, the policy pays the difference between the deductible of the wrap and the insured’s retention, subject to a maximum amount payable. The lead contractor in the wrap benefits as well: if all the subcontractors buy this cover it reduces their risk to deductibles and enhances their credit control.
David Price, Divisional director in Endeavour Insurance Services, comments “We were approached by a large group of subcontractors working on a large infrastructure project. They were faced with a sizeable deductible on the main wrap programme for which they were responsible and therefore, under the contract, they wouldn’t get paid until all claims against them regarding the deductible had been settled.
So we set out to create a product that would reduce the deductible down to a level that the subcontractor’s balance sheet could handle, and which would protect their profit margin in the contract if something happened. To handle the business, we built a web portal to trade the business which is administered by our local partner. It is a completely digital solution, with all documents processed electronically.”
The innovative subcontractor deductible buyback programme and online portal is the latest in a string of initiatives from Endeavour designed to tackle complex, uncovered areas of risk and improve the speed and efficiency of placing business in the London Market.
Other initiatives include Endeavour’s cyberEIS online cyber risk placement and binding, as well as free access to Endeavour clients to the innovative and efficient Advantage online claims handling platform.