Common Measurement Disputes on Builder’s Risk Claims-Common Measurement Disputes on Builder’s Risk Claims

Video Transcription

Video Summary

This webinar, hosted by the Inland Marine Underwriters Association and presented by Steve Gregoire, Senior VP at JS Health, focuses on common measurement disputes in builder's risk insurance claims, especially relating to delays in project completion. Steve discusses key issues from an accounting standpoint, including the application of the policy's period of indemnity, overlaps between soft costs and earnings, rental income losses, and the termination of additional soft costs. He explains delays in construction projects caused by covered perils and how these affect insured losses like lost earnings, soft costs, and additional interest financing.<br /><br />Steve highlights the importance of understanding differing policy wordings—time-based versus delay-based periods of indemnity—and how these notably impact loss calculations. He further explains the concept of operational ramp-up curves post-construction, emphasizing that losses must be measured within the policy’s indemnity period, which often leads to disputes when claimants consider stabilized operations beyond that period.<br /><br />The presentation also covers the complexities of overlapping soft costs, such as construction loan interest and real estate taxes, and the necessity to avoid double-counting these in claims. Additional soft costs like advertising and project administration expenses are reviewed, focusing on whether costs are additional, sustained during the indemnity period, and covered by policy terms.<br /><br />Through Q&A, Steve addresses real-world challenges including distinguishing delay causes during ramp-up, accuracy of cost estimates versus actual losses, documentation required for claims, tariff impacts, premium declarations, and the rise in litigation over builder's risk claims. Overall, the session provides practical insight into navigating and resolving measurement disputes in builder's risk insurance with emphasis on policy interpretation and accounting principles.

Asset Caption

A focused primer on Delay in Completion and Delay in Start-Up coverage, designed to provide practical insights for insurance professionals. This session covers key concepts including Loss of Earnings, Loss of Rental Income, and Soft Costs—explaining how these losses are defined, measured, and potentially overlap. We also examine the critical importance of understanding Period of Indemnity language, including operational ramp-up curves and timing mismatches that impact claims. Real-world examples will highlight how to identify and evaluate overlapping costs and additional soft costs.

Whether you're underwriting or adjusting, this concise session offers clarity on complex delay exposures.

Presented by:

Stephen Gregoire, CPA / CFF
Senior Vice President
J.S. Held LLC

Keywords

builder's risk insurance

measurement disputes

period of indemnity

soft costs

lost earnings

construction delays

policy wording

operational ramp-up

insurance claims