Insurance Premiums Stay Stable as Cranes Tumble

June 20, 2008 • An article by Lloyd's published earlier this month said that despite recent crane accidents, underwriters have not increased premiums. The London, England-based specialty insurance provider reported that Mike Johnson of JLT, a U.K.-based insurance and risk management company, said that despite the frequent use and much-publicized crane accidents in the past, they have yet to throw up any red flags on the insurance industry's radar.

“Generally, cranes are not a huge issue,” Johnson said in the Lloyd's report. “Crane rates have increased a little but underwriters generally don't ask for too much detail unless there's a particularly heavy lift involved.”

“On the liability side, things get a bit more interesting,” he continued. “Some underwriters are interested to know whether the contractor has a decent maintenance regime in place. They might check for safety records and ask whether workers are sufficiently trained to deal with cranes.”

“From an employers liability perspective it would be interesting to see how many people would be using the cranes and how many people are on site. However, there are no specific things going into policies about cranes. For example, they are not separately rated within liability policies.

“Accidents do, and have, happened, and these stay in people's minds, but there's no overriding case for it to necessarily affect the policy or for rates in construction to soar.”

According to one Lloyd's underwriter this latest New York accident will not affect the market.

He said: “When you hear of these events, they are both unfortunate and tragic, but to suggest it will dramatically cause underwriters to push up rates worldwide is naive. What's more interesting with incidents occurring in the U.S., particular New York, is the liability aspect. Somebody may get sued, it's just too premature to say who and for how much.”

 

The construction industry is booming, meaning the skylines of major cities such as Dubai, London and New York are dominated by cranes. Two recent crane accidents in New York and a crane collapse in Croydon, South London, have brought to light the issue of crane safety.