Construction Defect History TrendsConstruction Defect History, Trends, Issues and Underwriting Considerations December 1, 2009,

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Construction Defects Webinar

Presenter

Senior Vice President Casualty Treaty Underwriting M i h R i A i I

Gerry Finley, CPCU

Munich Reinsurance America, Inc.

Gerry’s background includes over 30 years of underwriting experience comprised of 9 years at the primary company level (including that of a Commercial lines Underwriting Manager) and over 21 years in casualtyCommercial lines Underwriting Manager) and over 21 years in casualty treaty reinsurance underwriting. He has been with Munich Re America for 15 years.

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Construction Defect Overview

I. What It Is

II. State Considerations

III. Class Considerations

IV. Underwriting Issues(C d E )(Coverage and Exposure)

V. Special Exposures (Green Building, Imported Drywall & Recession)

VI. Key Takeaways

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Comments are based on our own analysis of available information. Independent analysis is encouraged.

Construction Defect - Introduction

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A “Perfect Storm”Construction Defect - Introduction

Damage often takes years to become knownLatency

g yStatute of Repose generally 6-10 years

Severity Multi-family units – Condos, townhomes, tract developments Horizontal Policy Limit Stacking – latency, continuous triggerExpenses Complicated cases (50% of indemnity in some cases)Expenses – Complicated cases (50% of indemnity in some cases)

Legislation and Case Law

Constantly changingCan be positive or negativePolicy trigger uncertainty

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OriginsConstruction Defect - Introduction

California Rapid population/housing growth (especially 1970-90)CaliforniaLack of skilled contractors

1995 CA Supreme Court decision

Montrose

pContinuous trigger = continuing damage?“Known Loss” defense application limitedAll carriers exposed are at risk for entire loss

Buyer Expectations

Home buyers expect perfection Increasing trend

Economic Loss Doctrine & “Your

Economic loss = Breech of contract, not a tort?Business risk exclusion = “Damage to contractors own work”?

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Doctrine & Your Work” Exclusion

Business risk exclusion Damage to contractors own work ?No coverage, right? – What’s the issue?

“Your Work Exclusion”Construction Defect - Introduction

l. Damage To Your WorkISO E d t

"Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard ”

ISO Endorsements:- 2294 1001 – Broad Form- 2295 1001 – Designated Site or

Operationoperations hazard.

Eliminate the subcontractor exceptionEliminate the subcontractor exception

Sub-contractor Exception :

May be difficult to get on a general contractor’s policy

“This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a

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p y ysubcontractor.”

DefinedConstruction Defect - Introduction

Completed Operations vs. The issue is completed operations and, to a lesser extent,

d t t i tivs. Ongoing Operations products - not ongoing operations.

Residential Both may be impactedResidential vs.

Commercial

Both may be impacted.Residential has the greater loss potential – class actions, per project aggregates.

New Constructionvs.

Repairs

Multi-ownership new construction – KEY“Exposure equivalent” - major repairs, renovations, remodeling if multi-ownership projects.

Type of activities Design deficienciesM t i l d fi i i

Construction deficienciesG h i l/ b f

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Type of activities Material deficiencies Geophysical/subsurface

State Considerations

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Partition of StatesState Considerations

Tier 1 States Tier 2 States

Well-established history of loss activity and characteristics typical of exposure

A i N d

States with emerging / potential loss issues or characteristics of increased exposure

Al k * M l dArizona

California

Colorado

Nevada

Oregon

Texas*

Alaska*

Hawaii

Louisiana**

Maryland

New Jersey

North Carolina

Florida Washington

* 2007 TX Supreme Court decision (Lamar Mid C ti t) d t i d d fi iti l

Mississippi** South Carolina

* Alaska contractors may do work in other t t t tv. Mid-Continent) determined definitively

that a construction defect claim was the type contemplated under a CGL policy; i.e., qualifies as both an “occurrence” and “ t d ”

west coast states.

** LA and MS are Tier 2 due to Katrina, Rita, Wilma related construction activity.

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“property damage”.

Key State Factors State Considerations

Legal Climate• Proactive plaintiff bar?

P l i tiff j di i ( l t d i t d)?• Pro-plaintiff judiciary (elected or appointed)?• Adverse or favorable case law?• Legislation – (e.g., right to repair, homeowners warranty, statute of

repose, anti-indemnity statutes) – adverse or favorable?

Demographics (incl. Type of Homes, Climate, Geography/Topography)Geography/Topography)• Climate/Terrain – water intrusion/moisture; earth movement or soil

issues; natural catastrophes?• Nature of Construction/Ownership – extent of multiple ownership

projects – condos; townhomes mega tract home developments;projects condos; townhomes, mega tract home developments; construction quality (material, labor)?

• Population and housing trends?

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Population Growth Estimates 2000-2010 State Considerations

Numerical Population Change10 Largest States

Percentage Population Change10 Largest States

California 4,195,486 12.4%

Texas 3,797,068 18.2%

Florida 3 269 313 20 5%

Nevada 692,274 34.6%

Arizona 1,506,749 29.4%

Florida 3 269 313 20 5%Florida 3,269,313 20.5%

Arizona 1,506,749 29.4%

Georgia 1,402,627 17.1%

Florida 3,269,313 20.5%

Texas 3,797,068 18.2%

Idaho 223,338 17.3%

No. Carolina 1,296,510 16.1%

Virginia 931,730 13.2%

Nevada 692 274 34 6%

Georgia 1,402,627 17.1%

Utah 361,844 16.2%

No Carolina 1 296 510 16 1%Nevada 692,274 34.6%

Washington 647,892 11.0%

Maryland 608,484 11.5%

No. Carolina 1,296,510 16.1%

Virginia 931,730 13.2%

Delaware 100, 742 12.9%

12Source: U.S. Census Bureau data

State Evaluation Some Specific Key Drivers

State Considerations

Demographics - Economic conditions; growth and make-up of population; growth and make-up of housing; terrain; catastrophe potential (EQ, hurricane)

Statue of Repose – How long and when does it start?

Transfer of Liability - Extent and nature allowed (sole v. partial)?

Coverage Trigger – Is there a compelling precedent or tendency for courts to apply a particular trigger to CD cases and what are the implications (horizontal vs. vertical stacking)?stacking)?

Legal – Are judges appointed or elected; Is there a right to repair or home owner

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warranty program and how effective are they? Case or legislative law?

State Considerations

State Evaluation – Kansas Some Specific Key Drivers

Kansas

Demographics Stable/weak population; falling housing demand; hit hard byDemographics Stable/weak population; falling housing demand; hit hard by recession; tornado activity.

Statute of Repose 5 years for actions based on contract; 3 years if based on breach of contract.

Transfer of Liability

Not allowed to pass on sole or partial negligence; broad anti-indemnity statue applicable to both contracts and additional insured coverage.

Coverage Trigger Injury in Fact* and Continuous* rulings, but not specific to construction defect.

Legal Balanced judiciary - “Your Work” exclusion applied in a major id ti l (O i Giff d 1985) Mi d lt thresidential case (Owings v. Gifford, 1985); Mixed results on other

commercial construction cases; weak “right to cure” statute.

* Injury-in-Fact: Date the actual damage takes place May be multiple dates

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Injury-in-Fact: Date the actual damage takes place. May be multiple dates* Continuous: Period from initial exposure to manifestation/discovery

State Evaluation – Nevada Some Specific Key Drivers

State Considerations

Nevada

Demographics Strong population growth/building rate, weak transient/labor force.Demographics Strong population growth/building rate, weak transient/labor force. Hit heavily by the recession with high foreclosure rate; large build up of supply.

Statute of Repose 10 years for known defects / 8 years for latent defects from substantial completionsubstantial completion

Transfer of Liability

Contractual and AI – For both, can pass on sole or partial negligence unless excluded.

Coverage Trigger Generally follows CA (Continuous*)

Legal Elected judiciary & pro-plaintiff judicial system (e.g., Kitec; Westpark; Del Webb cases)

* Continuous : Period from Initial exposure to manifestation/discovery

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Class Considerations

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Partition of ClassesClass Considerations

Tier A = Known Exposure Classes – Direct / Active loss history

DevelopersDevelopers

GC – If > 10 units per year; or multi-family housing (townhomes; condos; tract homes); or apts. without mold, EIFS and Montrose exclusions

T d t t R f idi i d f f d ti l d di / itTrade contractors – Roofers, siding, windows, framers, foundation, land grading/site preparation, etc.

Products – Manufacturers, building material dealers & contractors (expense) –past (Entran Pipe, EIFS); current (Imported Drywall); future (Green Products)past (Entran Pipe, EIFS); current (Imported Drywall); future (Green Products)

Tier B = Potential / Emerging Exposure Classes – by nature of work

Other Classes – Water or structural integrity of building g y g

Repair/Remodeling – Structural Multi-ownership projects

Mechanical – Heating/AC, Plumbing

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Size of the Contractor is Less Important Type of Ownership and Nature of the Work are Key

Landscapers & Carpentry –Special Considerations

Class Considerations

Not all operations risks in a given class are equal – Be inquisitive(Find out: What have they done in the past.......... What they can do in the future)What do they tell the public: Check their website; phone book; brochures etcWhat do they tell the public: Check their website; phone book; brochures, etc.

Landscaping / LandgradingEquipment list Historical list of jobsHistorical list of jobs Landscaping - typically post-construction (e.g., lawn/shrub/tree workLand grading - typically pre-constructiong g yp y p(e.g., site prep, foundation, street/road)

Carpentry Structural (e.g., framing/roofing) vs. finish(e.g., sheet rock, molding, cabinets)Exterior (e.g., doors/windows) vs. interior (e.g., stairs, flooring)Mi i / d li j i / d li

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Minor repair/remodeling vs. major repair/remodeling (“new construction like”)

Renovations – Special ConsiderationsClass Considerations

Not all “Renovations and “Remodels” are Made Equal

Some are minor:Some are minor:Bathrooms, kitchensPlumbing, electricalPainting wallpaper finished carpentryPainting, wallpaper, finished carpentry

Some are more like new constructions: Structural – building envelope; load bearing g p ; gwalls, roofs, etc. “Major” work – mechanical

Keys:Multiple ownership projects involving structural/building envelopeKnow what the contractor is doing – beware of “NOC” classes

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Underwriting Issues Coverage and Exposure

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CoverageUnderwriting Issues

Know exactly what is covered and how it is covered

Coverage issues are critical regardless of the state or class. Even states or classes that are not viewed as problems need attention to coverage issues.

Tier 1 states or Tier A classes need special attention to coverage issues – minimal margin p g gfor error.

Coverage is always prone to market cycle influence – Discipline is important

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Coverage – Available ExclusionsUnderwriting Issues

Depending on Objectives

Exclusions Usage

Mold (CG 2167 1204) - Common usage

Montrose – known loss (CG 0057 0999 / Current CGL) Common usage – p/o ISO form

Earth movement / subsidence – Land grading, paving, etc. (manuscript) Common usage

Products – all states (EIFS, Entran Pipe, CCA, FRT) – Mfg; GC; developers; building material dealers; trade contractors (manuscript or standard ISO exclusion) ------ Chinese Drywall???????

Common usage

Townhome condo multi tract dev’l apt (Manuscript or standard ISO Common usageTownhome, condo, multi tract dev l, apt .(Manuscript or standard ISO exclusions) - Can use CG2134

Common usage

Designated work/operations (CG 2134 0187) – multiple uses (Prior work, condo, specific products or work, etc.)

Less common usage

Prior work (Manuscript; CG 2134 0187) - more on this later Less common usage

Progressive/continuous loss (Manuscript) - more on this later Less common usage

Damage to work performed by subcontractors (CG 2294/2295 1001) Less common usage

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Wrap up exclusion (CG 2154 0196) Less common usage

Special Coverage Triggers/Exclusions Attempt to address “Horizontal Stacking”

Underwriting Issues

Occurrence(Standard Trigger)

Injury / damage must occur during the policy period. Continuing injuries / damage may trigger multiple policies (“horizontal stacking”) in certain circumstances according to some courts

Special TriggersClaims Made Claim first made during the policy period provided the loss occurred after

retroactive date Addresses “horizontal stacking” but not date of loss

in certain circumstances according to some courts.

retroactive date – Addresses horizontal stacking but not date of loss occurrence

Manifestation Policy is triggered when the damage “manifests” (becomes known or should be known) – Addresses “horizontal stacking” but is not compatible with other forms in the event the insured changes carriers

Progressive Injury Exclusion

Exclusion - restricts the occurrence to only damage that started during the policy period - excludes any damage that first took place prior to the inception of the policy period and “progresses” or “continues” into the policy p p y p p g p yperiod. Addresses “horizontal stacking” but is not compatible with other forms in the event the insured changes carriers.

Prior Work Exclusion

Exclusion – eliminates some or all work that was started (or conversely, completed) prior to the policy period The exclusion can apply to specific

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Exclusion completed) prior to the policy period. The exclusion can apply to specific prior projects or specific years of work .

Transfer of Liability Issues / Considerations

Underwriting Issues

N t f C Bl k t D i t d J b d f t l dNature of Coverage How is the liability

transferred

Blanket vs. Designated Job – degree of control and understanding exposuresContractual vs. Additional Insured

Ongoing operations s completed operations

Scope of Coverage What liability is transferred

Ongoing operations vs. completed operationsSole negligence Defense“Caused by” vs. “Arising out of”Damage to “Your Work”

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Transfer of Liability Comparison of Key Issues

Underwriting Issues

y

Additional Insured Contractual Comments

Sole Negligence

Non-Transferable 07/04 or later versions of

Coverage may be available to an indemnittee

Older A/I forms provide coverage to the A/I “arising out of” the named insured’s work. The Negligence 07/04 or later versions of

forms CG 2010; CG 2033; CG 2037 (or) any in AZ, FL, MT, NM, ND, OR & WA

Yes Transferable

depending on the state statute or case law and circumstances.

(See note below)

gnewer forms (07/04 and later) provide coverage on a “caused by” basis which is more restrictive.

Seven states have statutes prohibiting A/I endorsements from providing defense or Yes - Transferable

All ISO forms prior to 07/04

p gindemnity coverage to A/I’s for other than the NI’s own negligence or share.

Damage to “Your Work”

Non-Transferable 10/93 or later versions of f CG 2010 d CG

The indemnittee can not get greater coverage than that which is available to

“Your Work” (Exclusion L) applies to the GC Named Insured’s (GC NI) completed operations. Subcontractor exception provides coverage

(Completed Operations)

forms CG 2010 and CG 2033

Yes - Transferable CG 2010 11/85 edition andCG 2037

that which is available to the named Insured.

(See note below)

Subcontractor exception provides coverage under GC NI policy for the GC NI if the work has been subcontracted. If the GC NI is an Additional Insured (AI) under the Sub’s policy there may be additional coverage for the GC NI if the Sub also subs work out.

Primary Defense

Follows the coverage noted above depending on the form and edition used

Yes, but only if the loss is otherwise covered under the indemnitors’ policy and the policy explicitly requires defense coverage

Same comments as above

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requires defense coverage

Note: CG 2426 0704 amends the definition of an insured contract. It limits coverage to BI or PD “caused, in whole or in part, by you or by those acting on your behalf.” This approach tailors contractual coverage to match more closely the protection providedto the named insured’s indemnittee as an A / I under the updated (0704) A / I endorsements.

Additional Underwriting IssuesUnderwriting Issues

Aggregate Limits – Per Project Basis

Common approach adds to the risk of bad contractorsCommon approach – adds to the risk of bad contractors doing bad work over multiple projects

Selecting capable contractors is critical

Homeowner Warranty Coverage / Right to Repair

May not insulate GL policy

Statue of repose outlives meaningful coverage

Must understand fully…Not a silver bullet

W / OCIPWrap-ups / OCIPBecoming more common

Coverage excess of wrap-ups is a challenge

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Be careful of gaps and lack of control

The Ultimate Key: Risk SelectionUnderwriting Issues

Startups or new contractors warrant close scrutinyyMultiple names or name changes is a signal warranting further caution – reputation risk

Stable Track Record

Quality of homesAbility/willingness to make repairsSt i

Financials are Staying powerReputation

Fundamental

Equipment scheduleQuality of employees and subsForms – exclusions, triggers, A/I coverage or contractual agreements

Understand Coverage & E

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agreementsActual construction & project – inspect quality of large jobsClaim history/prior carrier information

Exposures

Underwriting Issues Overview

Issues Possible Approaches

Loss activity - horizontal vs vertical Claims made & reported or manifestation trigger; perLoss activity - horizontal vs. vertical stacking

Claims made & reported or manifestation trigger; per policy aggregate limits; prior work, progressive injury exclusions;

Runaway defense Defense in limit, caps on defense

Contractual shifting of liability/expense

Extent and nature of additional insured coverage; per job contractual with tightly drafted contracts

“Tsunami Effect” – rolling forward past exposures

Claims made & reported/retro inception; prior work exclusion; progressive injury exclusion

Completed operations “Your Risk selection (choose quality builders/contractors);Completed operations – Your Work” product warranty

Risk selection (choose quality builders/contractors); extent of subcontracted work

Moral risk Risk selection – track record for quality and reputation (Weak contractors build bad homes)

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( )

Special Exposures

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Emergence of Green Construction Special Exposures

New Products or Recycled

Materials

New Risks

****************New

Processes &New Laws & **************** New

Opportunities

Processes & Technologies

New Laws & Regulations

Buyer Expectations****************

Contractor

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QualificationsContractor

Qualifications

Emergence of Green Construction Basic Issues

Special Exposures

What is “Green Construction”?

Important to distinguish truly unique green exposures from those that also exist in traditional construction projects.

Contracts must be clear and precise regarding “green” expectations and remedies if expectations are not met

Higher Standard of Despite LEED – “Green Contractor” qualifications are still an openHigher Standard of Care / Builder Qualifications

Despite LEED Green Contractor qualifications are still an open issue and standards are not strong.LEED is focused on commercial more than residential

Higher Buyer Energy savings, tax credits, health benefits, etc. – expectation will be Expectations higher……..functional equivalent to “financial guarantee”???

(Shaw Development v. Southern Builders, MD, 2007)New or Recycled Products /

More a products issue than completed operations issue except if wrong product used or right product misused …or indirect exposure

Technologiesg p g p p

through transfer of liability

Coverage Issues Still evolving…..Few court cases to date

M t d d f ill b j t

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More to come and defense will be a major component

Special Exposures

Emergence of Green Construction Basic Issues

Evaluating Contractors “Green” Qualifications

What is the extent and nature of green activities they are involved in or plan to be involved in during the term of coverage?

What is their experience with “green” construction? Have they had training and are theyWhat is their experience with green construction? Have they had training and are they certified? If so, is certification meaningful? (The internet is a good source for information about the “certifying body” )

What types of new products, technologies, systems, or materials have they used in the past? Do they use now or do they plan to use during the term of coverage? What is their experience with them?

How does the contractor manage the buyers expectations about the benefits of green construction? (How do they avoid “overpromising”?)

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Review all construction contracts – What’s promised and can the contractor deliver?

Chinese Drywall Challenges The Issue

Special Exposures

• Importation of low cost Chinese Drywall - 2002-2008 construction boom and Katrina - Depleted domestic drywall supplies

Origin

p y pp• May have been recycled and used by U.S. manufacturers to make

domestic drywall• Is it just imported drywall?

• High Humidity seems to produce the emission of sulfuric gases -Corrodes components of electrical , HVAC systems, other fixtures and appliances in the home

Problem • Illness and unpleasant (“rotten egg”) odor also reported

• 32 Sates (and growing) – FL, LA, TX, MS, OH, NC and VA dominate

Estimated Magnitude

• 550 - 600 million pounds of Chinese Drywall (6.2million sheets) • 100,000 homes impacted (2,100 claims so far) - estimated aggregate

cost of $25 Billion including diminution of value, indemnity, $5-10 Billion legal fees

• Ultimate scope of the problem still to be determined

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• Ultimate scope of the problem still to be determined

Chinese Drywall Challenges The Actors

Special Exposures

Congress – 7 legislative initiatives in total including: Drywall Safety Act of 2009- Drywall Safety Act of 2009

- Mortgage Reform and Ant-Predatory Lending Act - Foreign Manufacturers Legal Accountability Act of 2009

PlaintiffsHomeowners /Tenants

Condo AssociationsBuilders/Developers

DefendantsHomeowner Insurers (Coverage unlikely)

Mfg / Importers / Exporters$$$Builders/DevelopersContractors/Subcontractors

Material Suppliers

Mfg. / Importers / ExportersBuilders/Developers

Contractors/SubcontractorsMaterial Suppliers

$$$

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Courts:- Multi District Litigation (MDL) – Coordinate State Actions

Court Ordered testing of Homes

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- Court Ordered testing of Homes

Chinese Drywall Challenges Coverage Questions (1 of 2)

Special Exposures

• Negligence – Design, Mfg. Testing, Distribution, Information• Strict Liability – Product Liability throughout the Chain of

Commerce > Manufacture through Installation Breach of Warranty Express or Implied

Causes of Action• Breach of Warranty – Express or Implied• Misrepresentation – Negligent or Fraudulent

• Exposure – Date the drywall installation & proximity to it • Injury In fact - Date the actual damage or injury takes place• Manifestation – The date when the damage/injury becomes

evident, is discovered or should have been.C ti P i d f i iti l t di

Policy Coverage Triggers & Allocation

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• Continuous – Period from initial exposure to discovery

Chinese Drywall Challenges Coverage Questions (2 of 2)

Special Exposures

Standard Policy Exclusions….Will they apply??

(a) Expected or Intended – Are the injuries/damage excluded because the policyholders knew or should have known that the drywall would lead to the emission of

(j-6;) Damage to Property that is “Your Work” (l) Damage to Your Work - “sub-contractor exception”?

certain chemicals? How do these exclusions apply?

(f) Pollution – Is the off-gassing of sulphurcompounds in a home “pollution” if the

(m) Damage to Impaired Property or Property not Physically Injured – Is loss of

Pollutants are brought to the job site by the insured and thus excluded?

use of property not actually damaged the result of failure of the performance of the product or service excluded?

(k) Your Product How does this exclusion (n) Product Recall Is the withdrawal(k) Your Product – How does this exclusion apply to the drywall itself? To related damage to the home?

(n) Product Recall – Is the withdrawal, inspection, repair, replacement, or loss of use excluded if the drywall is withdrawn because of a suspected defect?

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More questions than answers at this point. Many issues need to play out on a case by case basis in court.

Chinese Drywall Challenges Underwriting Considerations

Special Exposures

No Easy Answers

Risk Selection – Classes – Who supplied, not just installed, the drywall Supplemental Applications Actual Work – understanding past work activities - critical

Contain Limits / Defense Sub-limits for Chinese drywall claimsDefense within limit for Chinese drywall

P li T i T Cl i M d R d i k (R i iPolicy Triggers – To Contain Horizontal Exposure

Claims Made – Retro date is key (Retro inception as respects imported drywall?)Manifestation – Less effective. Intent is to apply one limit, but roll forward if past work still an issue

Additional Exclusions – To Avoid Coverage

Must be drafted carefully, not too broad

Imported Drywall – Most absolute approach but exclusion must be realistic ---May impact application of standard exclusion Progressive Injury – Excludes injury or damage that y,

Consider impact on standard exclusions

g j y j y gcommenced prior to the policy period.Prior Work – Excludes work that was started (or completed) prior to the policy period – Best alignment of exposure and premium

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p pNo Universal Solution – Need to Consider

New v. Renewal; Type of Operations; Insured Quality, etc

State of the Market 2008/2009 Housing Crises Economic Recession/Recovery

Special Exposures

Short Term / Possible Positives

May improve the quality of home construction currently taking place.y p q y y g pBuilders “slow down” and use their more highly skilled trade contractors to work on the homes they do build.

Long Term / Possible Negatives

Statutes of repose - Next six to ten years, insurers will be responsible for construction sold over the recent several years.Strained financial condition of builders - May force builders to cut back on quality control efforts.efforts. Backlogged inventory of homes and weakened financial situation may make builders less likely/able to make necessary repairs in response to buyers’ demands. Bankruptcy = Insurers are the “deep pockets” with no defense assistance from contractor.

The broad downturn in the economy has impacted the housing industry

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The broad downturn in the economy has impacted the housing industry significantly and, from an insurer’s perspective, more negatively than positively. Underwriting contractor financial condition is more important than ever

Key Takeaways

Classes

GC/Developer vs. Sub

States

Know the drivers GC/Developer vs. SubEnvelope/structural vs. interior/finishGreen ConstructionMass Tort/Class actions –Common/Close Owners

Know the driversMonitor demographic, legislative, regulatory and judicial trends and developments

Common/Close Owners

Emerging Exposures:

Coverage/Pricing Economy

Green Building; Imported Drywall

Completed operationsAggregation/accumulationTransfer of liability Tie in to states, classes, coverage

Additional challengesStay with the basicsUnderwrite financials closely

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Highly market driven

More Information Client Resources

Emerging Exposure

Produced quarterly Provides the latest news, reports, and publications available on Exposure

Newsletter, p , p

many emerging issues that could have an effect on future claim and underwriting activity

R d i f ti i li f b i i d tConnect –

Extranet Site

Resources and information concerning lines of business, industry topics, claims, timely insurance news, and trainingMunich Re publications, presentations, newsletters, white papers, state profiles, and more.

Discuss specific emerging exposuresClient Visit

Your company’s Munich Re America Client or Broker Manager is your first

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Your company s Munich Re America Client or Broker Manager is your first point of contact to discuss all of these services.

Construction Defect History, Trends, Issues and Underwriting ConsiderationsIssues and Underwriting Considerations

December 1, 2009

© Copyright 2009Munich Reinsurance America, Inc. All rights reserved. The Munich Re America name is a mark owned by Munich Reinsurance America, Inc.

The material in this presentation is provided for your information only, and is not permitted to be further distributed without the express written permission of Munich Reinsurance America. This material is not p pintended to be legal, underwriting, financial, or any other type of professional advice. Examples given are for illustrative purposes only. Each reader should consult an attorney and other appropriate advisors to determine the applicability of any particular contract language to the reader's specific circumstances.

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