Zurich's Construction Parametric solution now covers snow

Providing contractors with answers to growing severe weather risks is why Zurich North America Construction offers Construction Weather Parametric Insurance. We are pleased to announce that we are expanding the list of perils covered by our parametric solution to include snow accumulation – joining the existing perils of rain, wind, heat and cold.

Construction Parametric Insurance provides coverage for weather events that can impact operations and increase costs for contractors and building owners without incurring any physical damage to jobsites, materials and equipment. This innovative insurance product establishes predetermined parameters and payments for risks that can be objectively measured and verified by a third-party authority. Policy limits based on the contractor’s Average Daily Loss Value (ADLV) exposure are determined in advance of policy inception, during the application and underwriting process. If the agreed-upon measurement is triggered by a weather event the claim is paid.

How does the snow parametric option work?

Under Zurich’s new snow peril extension, coverage for the ADLV is triggered upon the accumulation of snow meeting the preset threshold.  For example, using a 6-inch trigger,  coverage will respond whether the accumulation threshold is reached by a single event or multiple events. Consider a scenario in which 4.5 inches of snow falls on a given day. Because it is less than 6 inches, the trigger is not met. However, if a second wave overnight drops another 3.5 inches, the total accumulation is now 8 inches, triggering ADLV coverage for each workday on which the daily interruption trigger is met. If 1 inch of accumulated snow melts the next day, the 7 inches remaining will still exceed the 6-inch trigger, resulting in another day of parametric coverage.

This expansion of Zurich’s Construction Weather Parametric solution may be of particular interest to contractors engaged in linear projects, such as highway construction, bridges and other projects exposed to the full range of winter weather. After an event delivering significant accumulation of snow, a road contractor may not have the ability to clear 20 miles of work in progress in a reasonable period. The result will be lost workdays, throwing off schedules, driving up costs and potentially accruing penalties.

The threshold for each peril, including Zurich’s new snow option, is modeled against historical weather data based on the location of the project and the selected coverage period. Delays due to wind, heat and cold, and now snow accumulation, are measured based on working hours, typically between 7 a.m. and 4 p.m., unless specified otherwise. Policy terms are written for up to 12 months. Customers can choose coverage for a single peril or any combination of perils. In addition, coverage can be tailored to a specified period within the 12-month policy term when the customer is most concerned with the potential for a particular weather event or will be at a key milestone/ critical path in the construction schedule.

The minimum deductible is 6 days. After the deductible has been met and the next triggering event occurs, the ADLV will be paid each day the trigger is met until the policy aggregate limit is reached.  Deductible days do not have to be consecutive and if multiple perils are purchased, each peril trigger will count toward the single deductible.

A customer-led solution

The addition of snow accumulation to Zurich’s Construction Weather Parametric Insurance offering is another instance of providing a truly customer-led solution from start to finish. The inclusion of this peril was a result of consultations with customers and brokers, then developing a solution to meet their unique needs.

Zurich Construction Parametric Insurance offers customers great flexibility, customization and competitive cost:

• Builders Risk coverage not required — While Construction Weather Parametric Insurance complements Zurich’s Builders Risk policies, having a Builders Risk policy is not a prerequisite if a customer holds any active line with Zurich.
• Customization — Customers can select one or a combination of perils, determining the coverage period in which the perils will apply.
• Attractive cost — While some competitive parametric products can cost tens of thousands of dollars, the minimum premium for Zurich Construction Weather Parametric Insurance is $5,000.

The goal of Zurich’s parametric coverage is to help customers of all sizes de-risk unforeseen weather events beyond the protections typically available through Builders Risk and other forms of traditional insurance.

To learn more, download our Construction Weather Parametric Insurance brochure, or contact your local Zurich Construction Property Underwriter or Regional Construction Property Underwriting Manager.

Zurich North America Construction

Any discussion providing a general description of certain types of insurance and services available to qualified customers through the companies of Zurich in North America, is provided solely for informational purposes.  Nothing herein should be construed as a solicitation, offer, advice, recommendation, or any other service with regard to any type of insurance product underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company, 1299 Zurich Way, Schaumburg, IL 60196. Your policy is the contract that specifically and fully describes your coverage, terms and conditions.  The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy.  Coverages and rates are subject to individual insured meeting our underwriting qualifications and product availability in applicable states.  Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.