Business Insurance

The distinction between an employee and an independent contractor is one of the most consequential classification decisions a construction firm makes, and it is also one of the most consistently reviewed by state labor agencies, insurance auditors, and federal regulators.

Construction is among the industries most often examined for misclassification because the use of subcontractors, specialty trades, and project-based workers creates genuine complexity around how workers are engaged. Some of that complexity reflects legitimate independent contractor relationships. The issue that generates regulatory and insurance exposure arises when the label ‘independent contractor’ is applied to workers whose actual working relationship meets the legal definition of employment, whether intentionally or through outdated practice that has not kept pace with the current enforcement environment.

What the Classification Tests Actually Look For

Whether a worker is an employee or an independent contractor is not determined by the contract both parties sign or the label they agree to use. It is determined by the actual nature of the working relationship, evaluated against tests established by state and federal law.

The most commonly applied factors include whether the hiring party controls not just the result of the work but how the work is performed day-to-day, whether the worker is economically dependent on a single firm or operates an independent business serving multiple clients, whether the work is part of the hiring firm’s core business operations, and whether the relationship is ongoing and continuous rather than limited to a single defined project.

A specialty trade worker who works exclusively for one general contractor, uses that contractor’s equipment and materials, works the hours the contractor specifies, and has no other clients meets most of the criteria that point toward employee status under the majority of state and federal tests, regardless of whether both parties characterize the relationship as a contractor arrangement. Courts and regulatory agencies focus on the substance of the working relationship rather than the paperwork.

The Regulatory Environment in 2026

State enforcement activity around worker misclassification has been increasing. According to a 2026 report from the Economic Policy Institute, lawmakers in at least 12 states proposed or passed new legislation to address misclassification in 2025 and 2026. Several of those laws specifically address the construction industry, extending liability to general contractors for misclassification that occurs at the subcontractor level. Delaware passed a law holding general contractors liable when their subcontractors misclassify workers, and Colorado enacted a law imposing penalties on employers that willfully misclassify.

Insurance premium audits conducted at policy expiration have also been a practical mechanism for identifying misclassification. Workers’ compensation auditors review payroll records, subcontractor certificates of insurance, and the actual nature of work performed. When auditors identify workers who were classified as independent contractors but whose working arrangements meet employee criteria, the result is typically a retroactive premium adjustment to reflect the correct classification, which can generate a substantial audit bill at the end of the policy year.

What Misclassification Means for Workers’ Compensation Coverage

The most significant insurance consequence of misclassification involves workers’ compensation coverage. A worker who is legally an employee but has been classified as an independent contractor is not covered under the employer’s workers’ compensation policy. If that worker is injured on the job, the employer faces both the financial exposure from the injury and the absence of insurance coverage to respond to it.

Several states have statutory employer provisions that extend this exposure. If a general contractor’s subcontractor has misclassified workers and one of those workers is injured, the general contractor may become the statutory employer and have their own workers’ compensation policy called upon for the resulting claim. According to OSHA, construction consistently accounts for a disproportionate share of workplace fatality and serious injury rates relative to overall employment, which underlines why coverage structure in construction is particularly consequential.

Reviewing a commercial insurance program with worker classification in mind is a practical step for any construction firm. Confirming that the classification of every worker is documented, supported by current facts, and consistent with applicable state tests is a meaningful part of confirming that coverage will respond as expected when it is needed. For additional loss control and risk management resources, the Dynamic Risk Synergy Portal provides tools that help contractors identify and address operational vulnerabilities proactively.

Ready to review whether your classification practices align with your coverage structure? The team at Tooher-Ferraris has been helping contractors build complete, accurate insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

The August 2024 practice changes stemming from the NAR settlement are now fully embedded in daily real estate practice. Written buyer-broker agreements are mandatory before touring. Commission offers cannot be communicated on MLS platforms. Compensation disclosures are required at the transaction level. Most brokers understand the new rules in principle.

The E&O exposure is not in understanding the rules. It is in the documentation gaps that appear when the rules are applied imperfectly to the thousands of small decisions made in an active transaction. Plaintiffs’ attorneys have been monitoring implementation closely since the settlement went into effect, and the 2026 Code of Ethics amendments have further refined what brokers are required to disclose, document, and confirm in writing.

For broker-owners running active teams, the compliance risk is compounded: every agent working under the broker’s license creates exposure the broker may not fully see until a dispute surfaces.

What the New Documentation Requirements Actually Mean

The settlement’s most significant practice change for E&O purposes is the written buyer-broker agreement requirement. Before the settlement, many buyer-agent relationships were governed by informal understandings. The settlement requires that compensation terms, the rate or amount of compensation, and the prohibition against exceeding agreed-upon amounts all be specified in writing before a buyer tours a home.

The documentation requirement is not merely procedural. A buyer who later claims they did not understand the compensation structure, or were not informed that they might be responsible for paying their agent’s commission directly, has a potential E&O claim if the broker cannot produce a written agreement showing the disclosure was made and acknowledged. The absence of a signed agreement is not a defense; it is the exposure.

Compensation disclosures have also become more nuanced. Under the 2026 Code of Ethics amendments, brokers who accept compensation from more than one party in a transaction must disclose this to their own client and obtain informed consent. Dual or variable rate commission arrangements carry specific disclosure requirements. The documentation trail for each transaction needs to reflect that these disclosures were made, when they were made, and to whom.

The Agent Supervision Problem

For brokerage owners, the post-settlement compliance environment introduces a supervision dimension to E&O that was less acute under the prior practice framework. Agents who are not using compliant written agreements, who are verbally discussing compensation in ways that don’t match their written disclosures, or who are maintaining informal practices that predate the settlement are creating liability the broker will be responsible for.

According to the National Association of Realtors’ own guidance, brokers should incorporate carrier-led E&O training into their annual education calendar and use the questions asked in annual E&O questionnaires as a ‘treasure map’ of what carriers consider high risk. Those questionnaires in 2026 will prominently feature buyer agreement compliance and compensation disclosure documentation.

What Good Documentation Looks Like

Every buyer engagement should begin with a signed written buyer-broker agreement specifying compensation terms. Every transaction file should contain completed disclosure forms confirming negotiability of commissions. Where a broker receives compensation from more than one party, written consent signed by the client should be in the file. The commercial insurance and specialty programs that protect real estate brokerages cover licensed professional activities that are properly documented. Documentation is not compliance paperwork. It is what makes the coverage work when a claim is filed.

Ready to make sure your brokerage’s documentation practices are protecting your E&O position? The team at Tooher-Ferraris has been helping real estate professionals manage risk since 1932. Contact us today to schedule a no-obligation consultation.

The architectural review committee denied a homeowner’s request to add a pergola. The homeowner hired an attorney. The lawsuit named the association  and the three board members who voted on the denial, individually, by name.

This is not a hypothetical edge case. It is a pattern playing out in community associations across the country in 2026, and board members who assumed their volunteer status provided meaningful personal protection are discovering otherwise. According to research cited by Kevin Davis Insurance Services, 31 percent of homeowners believe their HOA board has too much power. This figure correlates directly with the likelihood of disputes escalating to litigation when homeowners feel a decision was wrong.

What D&O Actually Covers

D&O insurance protects board members and the association against claims alleging wrongful acts related to the performance of governance duties. These claims can arise when homeowners allege that the board enforced rules inconsistently or selectively, mishandled election procedures, made arbitrary or discriminatory architectural decisions, failed to follow governing documents, or breached its fiduciary duties through financial management decisions.

When a claim is covered under the policy, D&O insurance typically provides coverage for legal defense costs, which are often the most significant financial exposure in governance disputes, as well as indemnification for settlements or judgments up to the policy limit. Board members receive defense counsel, and their personal asset exposure may be limited to amounts that exceed the available policy coverage.

What D&O Does Not Cover

D&O does not cover bodily injury or property damage. Those claims fall under general liability coverage. Intentional fraud and criminal acts are excluded. Actions taken outside a board member’s official authority are typically excluded. Suits between covered persons, such as one board member suing another or the association suing a former director, are generally excluded, though some policies include carve-backs for non-collusive disputes.

The policy is written on a claims-made basis, which means the coverage in force when the claim is reported is the coverage that applies. Boards that change carriers or allow coverage to lapse need to address prior acts coverage and extended reporting periods. These gaps can leave past decisions without coverage even when a new policy is in place.

How Much Coverage Is Enough

For most associations, a minimum of $1 million in D&O limits is appropriate. Communities with 50 or more units, active common areas, a history of governance disputes, or an active litigation environment should consider carrying $2 million to $5 million in coverage. D&O premiums for community associations in 2026 typically range from $900 to $5,000 annually for small to mid-sized communities. This makes D&O one of the most cost-effective coverages in any insurance program given the level of protection it provides.

Annual D&O reviews should confirm that the policy’s retroactive date provides full prior acts coverage and that limits remain appropriate based on changes in community size, operations, or litigation history. Specialty programs for community associations include D&O policy structures designed specifically for the governance dynamics of HOAs and condominium boards.

Ready to make sure your board members are protected? The team at Tooher-Ferraris has been helping community associations and their leadership since 1932. Contact us today to schedule a no-obligation consultation.

Ask most small business owners what their risk management program looks like and you will get one of two answers: a description of their insurance policies, or a blank look.

Insurance is a risk management tool. It is not a risk management program. The distinction matters because insurance only addresses risks that have already happened. It pays for losses after the fact. Risk management addresses what leads to those losses: the exposures, the controls, the monitoring, and the financial planning that determine how well a business weathers a serious disruption.

The framework below is not complicated. It is four questions that, answered honestly, tell you where your business stands and what to do about it.

Identify: What Could Actually Hurt Your Business?

Risk identification is the starting point most businesses skip. It requires stepping back from the day-to-day and asking: what scenarios could seriously damage or destroy this business?

The categories are consistent across most small businesses. Property damage, including fire, flood, theft, and equipment failure, can interrupt operations and generate repair or replacement costs that a business cannot absorb without insurance or sufficient reserves. Liability claims, including those arising from a customer injured on your premises, a product defect, or a professional error, can trigger lawsuits that outlast the underlying incident. Workforce disruptions, including a key employee being injured or incapacitated, labor shortages, and workers’ compensation claims, can affect operational continuity. Financial and cyber risks, including fraud, ransomware, business email compromise, and regulatory penalties, are increasingly common even for businesses that would not describe themselves as technology-dependent.

According to the Federal Emergency Management Agency, approximately 40 percent of small businesses do not reopen after a natural disaster. The businesses that do recover consistently share one characteristic: they had thought through the scenario before it happened.

Assess, Control, and Transfer: The Full Framework

A risk assessment forces prioritization: for each identified exposure, how likely is it to occur, and how severe would the impact be if it did? High likelihood and high severity risks deserve the most immediate attention, both in terms of prevention and insurance. Low likelihood risks with catastrophic potential — a major product liability suit, a significant natural disaster — may warrant insurance even when the probability is low, because the financial impact of not being covered is existential.

Loss control is where the insurance bill and the risk management program intersect. Carriers look at your loss control practices when underwriting your coverage and businesses with formal safety protocols, documented procedures, and evidence of risk management investment consistently receive better terms than those without.

The Dynamic Risk Synergy Portal provides practical loss control tools that help small businesses identify and address operational vulnerabilities before they become claims. The final step is ensuring the risks that cannot be retained are properly transferred and that requires a thorough commercial insurance review confirming that coverage limits are adequate, exclusions are understood, and gaps between policies are identified. Risk management and insurance work together. The businesses that treat insurance as a last resort rather than a planning tool consistently discover their gaps when they can least afford to.

Ready to build a risk management program for your business, not just an insurance policy? The team at Tooher-Ferraris has been helping small and mid-size businesses manage risk intelligently since 1932. Contact us today to schedule a no-obligation consultation.

Builder’s risk insurance is a standard component of most construction project programs, and the policy form that works well for a traditional design-bid-build project may benefit from review when the delivery method is design-build.

The distinction matters because design-build projects create exposures that standard builder’s risk forms were not written to address. Understanding where those considerations arise is useful for any design-build firm that wants to confirm its project insurance program is appropriately structured before work begins.

What Standard Builder’s Risk Covers

A standard builder’s risk policy covers the physical project under construction against direct physical loss or damage from covered causes, which typically include fire, wind, lightning, theft, vandalism, and accidental damage during the construction process. Coverage attaches when physical construction begins and terminates at project completion, occupancy, or policy expiration.

The policy insures the value of the work in place, including materials stored on site and, in many forms, materials in transit to the project. Most policies also include coverage for the cost of demolition and debris removal following a covered loss.

Standard builder’s risk was designed around a project delivery model in which the design is substantially complete before construction begins. The contractor builds from finalized plans, and the risk the builder’s risk policy addresses is primarily physical — what happens to the structure and materials while they are being assembled.

How Design-Build Changes the Coverage Equation

In a design-build delivery, the design and construction processes overlap. The design-build contractor begins performing design work before any physical construction starts, and design development continues in parallel with early construction phases on many projects. This creates a pre-construction design phase during which costs are accumulating and contractual commitments are being made, but no physical construction exists to trigger coverage under a standard builder’s risk form.

Standard builder’s risk policies also include professional liability exclusions, which remove coverage for losses arising from design errors, omissions, or professional negligence. In a traditional design-bid-build project, this exclusion does not create a significant gap for the contractor because the contractor is not responsible for the design. In a design-build project, where the contractor holds both the design and construction obligations, the professional liability exclusion in the builder’s risk form intersects with the contractor’s own professional liability exposure in ways that deserve careful attention.

According to the Design-Build Institute of America, design-build delivery now accounts for more than 44 percent of US construction volume across commercial, institutional, and infrastructure sectors. As design-build has grown as a delivery method, the insurance market has developed coverage options specifically structured for the design-build environment, including policy forms that address the pre-construction phase, modified delay in completion coverage, and more explicit treatment of professional liability exposure in the context of builder’s risk.

The question of who provides the builder’s risk policy on a design-build project, whether the project owner or the design-build contractor, is determined by the contract and should be confirmed before the project begins. The contract should clearly specify who is responsible for obtaining the policy, what coverage limits apply, who is named as an insured, and how the builder’s risk policy interacts with the separate professional liability coverage carried by the design-build contractor.

What to Review in Your Design-Build Builder’s Risk Program

A design-build firm reviewing its project insurance program should confirm several specific items.

Coverage for the pre-construction design phase should be addressed in the program structure, whether through a soft costs endorsement, a design-build specific policy form, or another mechanism. The interaction between the builder’s risk form and the firm’s professional liability policy should be reviewed to confirm that the professional liability exclusion in the builder’s risk form does not leave a gap for design-related losses.

Delay in completion coverage, which addresses the financial costs of project delays, should be reviewed specifically for how design-caused delays are treated. An exclusion for delays attributable to design errors can create gaps on design-build projects that would not exist on a traditionally delivered project of comparable scope and value.

Subcontractor coverage is another consideration. Whether subcontractor work is covered under the design-build contractor’s builder’s risk program, or whether subcontractors are required to obtain their own coverage for their scope, should be clearly addressed in both the policy and the contract with each subcontractor.

Reviewing specialty programs available to design-build contractors alongside the commercial insurance program is a practical starting point for confirming that the project insurance structure is appropriate for the delivery method your firm uses.

Ready to review your builder’s risk program for design-build work? The team at Tooher-Ferraris has been helping contractors and design-build firms structure appropriate project insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

Most community associations carry at least some insurance. The question worth asking is whether what they carry is actually complete and whether the gaps they do not know about will surface at the worst possible moment.

The Community Associations Institute identifies four essential pillars of a complete community association insurance program: property coverage for common areas and shared structures, commercial general liability, crime and fidelity coverage, and directors and officers liability. Most associations carry the first two by requirement or lending mandate. The third and fourth, crime and fidelity, and D&O, are where coverage gaps most consistently live, and where the financial and personal consequences of being unprotected are most significant.

Pillar One: Property Insurance

Property coverage protects the physical assets the association owns or is responsible for. These assets include common area buildings, amenities, shared structures, and, in condominium communities, often the building envelope itself. For condominiums, clarifying what the master policy covers versus what individual unit owners are responsible for is one of the most common points of confusion for boards and residents.

Property coverage must be reviewed not just at renewal but whenever construction costs change meaningfully. Many associations set their property values based on estimates that are now several years old. Given that construction costs remain significantly elevated above pre-pandemic levels, those values may no longer reflect what a rebuild would actually cost. This creates an underinsurance risk that most boards do not discover until a major loss occurs.

Pillar Two: General Liability

Commercial general liability covers third-party bodily injury and property damage occurring in common areas. Slip and fall incidents, injuries at pools and playgrounds, and property damage caused by association maintenance activities all represent GL exposures. Summer is peak liability season for common area amenities, with pool decks, waterfront areas, and recreation facilities seeing maximum use and maximum incident frequency.

Pillar Three: Crime and Fidelity Coverage

Crime and fidelity coverage protects the association’s financial assets against theft, embezzlement, forgery, check fraud, and funds transfer fraud by board members, employees, managers, or vendors. Reserve funds and operating accounts represent attractive targets and the people with access to those funds are exactly who this coverage addresses.

Many associations carry a basic fidelity bond that covers employee dishonesty. What most do not realize is that a fidelity bond does not cover business email compromise or wire fraud. These schemes are the most common financial attack vector affecting HOAs in 2026. Funds transfer fraud and social engineering are separate insuring agreements that must be specifically added to a crime policy. Industry guidance typically recommends crime coverage equal to at least three months of regular assessments plus the total reserve fund balance.

Pillar Four: Directors and Officers Liability

D&O insurance protects board members from personal financial liability arising from governance decisions. A homeowner who alleges the board enforced rules inconsistently, denied an architectural request improperly, managed finances irresponsibly, or conducted an election unfairly can name individual board members in a lawsuit. Legal defense costs alone average tens of thousands of dollars even when the board ultimately prevails. Volunteer status does not reduce this exposure. A mid-year program review confirming all four pillars are in place at adequate limits is one of the most valuable steps a community association manager or board chair can initiate. Specialty programs designed for community associations address all four pillars in a coordinated structure so coverage lines are complementary rather than leaving gaps between policies.

Ready to make sure your association’s program is complete? The team at Tooher-Ferraris has been helping community associations protect their communities since 1932. Contact us today to schedule a no-obligation program review.

For decades, captive insurance was a tool that large corporations used and mid-market businesses read about. The capital requirements, administrative complexity, and domicile setup costs kept most companies below a certain threshold on the outside looking in. That is changing and in 2026, it is changing fast.

The global captive insurance market was valued at approximately $79 billion in 2024. According to Zion Market Research, it is projected to reach $120 billion by 2034 and the growth is no longer concentrated at the top of the market. Protected cell companies, group captives, and cell structures are making captive access viable for businesses that would have been turned away a decade ago. The Cayman Islands, one of the leading captive domiciles, formed more captive licenses in the first half of 2025 than in all of 2024 combined.

The companies driving that growth are not Fortune 500 firms. They are mid-market manufacturers, construction companies, transportation businesses, and professional services firms that have gotten tired of absorbing volatile insurance market swings and are ready to take more control of their risk financing.

What a Captive Actually Is and What It Isn’t

A captive insurance company is a licensed insurance entity owned and controlled by the business it insures. Instead of paying premiums to a third-party carrier and having underwriting profit accumulate on the carrier’s balance sheet, the business retains a portion of that risk and, in favorable loss years, retains the underwriting profit as well.

Captives are not self-insurance. They are licensed, regulated insurance entities with formal governance, actuarial pricing, and reinsurance structures. A business operating through a captive still transfers catastrophic risk to the commercial market. The captive typically sits in the primary or lower layers of an insurance program, with excess reinsurance providing coverage for large or unusual losses.

Group captives allow multiple companies, often operating in the same or similar industries with comparable risk profiles and safety cultures, to share the structure and its costs. A single mid-market company may not have the premium volume to justify a standalone captive, but participating in a group captive provides many of the same benefits, including premium stability, underwriting profit retention, improved data visibility, and insulation from market volatility.

Why Mid-Market Companies Are Entering the Captive Market in 2026

The commercial insurance market for certain lines has created conditions that make captives increasingly attractive. General liability, commercial auto, and umbrella/excess carriers have restricted capacity and raised rates for accounts with adverse loss experience or sector-based concerns. Social inflation, driven by nuclear verdicts, third-party litigation funding, and expanding theories of liability, continues pushing claim severity upward in ways that affect pricing broadly, not just for accounts with poor loss history.

Businesses that invest in safety, training, fleet management, and operational discipline are often priced alongside peers who do not because traditional carriers can only underwrite the visible data. A captive rewards discipline directly: better loss performance means better financial outcomes for the captive owner, not for the carrier.

The captive insurance solutions conversation typically starts with a feasibility study, which is an actuarial and financial analysis of whether the business’s premium volume, risk profile, and financial position support captive participation. Companies paying more than $500,000 annually for general liability, auto, and umbrella coverage are often strong candidates, though group structures lower that threshold considerably.

How to Know If Your Business Is a Candidate

The strongest captive candidates share a few characteristics: consistent, well-managed risk profiles with investment in loss control; stable premium history without major unfavorable claims trends; financial discipline and sufficient working capital to fund the retained layer; and leadership willing to treat risk financing as a long-term strategy rather than a transactional annual renewal.

If your business fits that profile and you are regularly absorbing commercial market volatility without a clear mechanism to insulate yourself from it, a captive feasibility conversation is worth having before your next renewal, not after it.

Ready to explore whether captive insurance belongs in your risk financing strategy? The team at Tooher-Ferraris has been helping businesses evaluate and structure alternative risk programs since 1932. Contact us today to schedule a no-obligation consultation.

Your commercial property policy covers your building. Your general liability covers third-party bodily injury and property damage. What covers the $80,000 excavator parked at a job site three towns over?

For many contractors, the honest answer is: nothing.

Construction is a mobile industry. Tools travel between job sites, equipment gets staged at temporary locations, materials sit on flatbeds overnight, and rented machinery moves in and out of projects daily. Standard commercial property policies are built around fixed locations, and they typically do not follow your assets when they leave the building. That gap is an inland marine exposure, and closing it is one of the most overlooked steps in a contractor’s insurance program.

What Standard Property Policies Don’t Cover

Commercial property insurance is designed to protect assets at a scheduled location — your office, your yard, your warehouse. When equipment leaves that location, most standard policies either exclude coverage entirely or impose sub-limits that bear no relationship to actual replacement costs.

The gaps vary by policy, but contractors commonly find that standard commercial property coverage does not adequately protect tools and equipment stored at or transported to temporary job sites, equipment in transit between locations, rented or leased machinery the contractor is responsible for under contract, materials stored off-premises awaiting delivery, or mobile equipment like compressors, generators, and forklifts that move regularly.

This is not a fringe concern. According to the National Equipment Register, construction equipment theft costs the US industry an estimated $400 million annually, and those losses disproportionately impact small and mid-sized contractors who cannot absorb a six-figure replacement without disrupting active projects. According to Gallagher’s 2026 market outlook, construction-related replacement costs remain 15 to 20% above pre-pandemic levels — which means a piece of equipment stolen or destroyed today costs significantly more to replace than the value on your current schedule.

What Inland Marine Insurance Actually Does

Despite its name, inland marine has nothing to do with water. The term originates from the insurance industry’s historical distinction between ocean cargo and goods transported over land. For contractors, an inland marine policy — often called a contractor’s equipment floater — is specifically designed to protect property that moves.

Coverage typically includes owned tools and equipment wherever they are located, whether on a job site, in transit, or at a storage facility. High-value scheduled items like cranes, excavators, and lifts can be listed individually with agreed value coverage. Blanket limits cover unscheduled tools and small equipment up to a per-item and aggregate cap. Equipment you rent or borrow and are contractually responsible for can also be included, as can technology tools used in the field.

Coverage terms vary significantly by policy, so reviewing the specific causes of loss, deductibles, and any exclusions for unattended equipment is essential. Many policies, for instance, exclude theft from an unattended vehicle unless there is visible evidence of forced entry — a detail that surfaces at claim time in ways contractors do not anticipate.

The Right Time to Review Is Before You Need It

The specialty programs available to contractors in 2026 include highly competitive inland marine options, even for accounts with prior claims. An inland marine review should include a current equipment inventory compared against your commercial insurance policy schedule, a check on rented equipment obligations and whether they’re covered, and a look at transit exposures for materials and tools in transit between sites. OSHA’s ongoing emphasis on jobsite safety equipment standards is a timely reminder that the tools enabling compliance with those standards need their own protection when they are off your property.

Ready to make sure your tools and equipment are actually covered everywhere your business operates? The team at Tooher-Ferraris has been helping contractors protect their assets since 1932. Contact us today to schedule a no-obligation consultation.

When did you last sit down and go through your equipment schedule, line by line?

For most contractors, the honest answer is: at some point during the original policy setup, and not since. That is a problem — and in 2026, it is a more expensive problem than it used to be.

Construction replacement costs remain elevated across the board. Equipment values have shifted. Over the course of a busy year, you have likely added tools, acquired new machinery, sold off old assets, or taken on rented equipment under contract. Some items on your current schedule may no longer exist. Others that do exist are not listed at all. That mismatch between what you own and what your insurance program actually covers is underinsurance and most contractors do not discover it until a claim forces the issue.

Why Equipment Schedules Go Stale

Insurance schedules are snapshots. They capture the state of your operation at the time the policy was written or last formally updated. Between renewals, equipment changes constantly — purchases, disposals, lease returns, rental agreements that come and go with specific projects. Most of those changes never reach your broker.

The result is a schedule that may reflect your operation from two or three years ago. According to Gallagher’s 2026 market analysis, construction-related replacement costs remain 15 to 20% above pre-pandemic levels. An excavator that cost $120,000 in 2021 may cost $140,000 or more to replace today. If your scheduled value is still $120,000, you will absorb that gap out of pocket after a total loss.

According to Sentry Insurance’s 2026 Construction Outlook, contractors who have not updated their equipment and property values within the last 12 months face the real possibility of discovering a coverage shortfall mid-loss when there is no opportunity to correct it. Beyond the dollar impact on a single claim, many inland marine and equipment floater policies include coinsurance provisions. If declared values are significantly below actual replacement cost, the insurer may apply a coinsurance penalty that reduces the payout on even a partial loss.

What a Good Equipment Audit Actually Looks Like

An equipment schedule review does not need to be a major project. At its core, it is a structured comparison of what you own against what is listed on your policy, followed by a conversation with your broker about whether the values, coverage structure, and deductibles still match your operation.

In practice, that means pulling your current equipment list from your fixed asset records and comparing it item by item to the policy schedule, identifying items that appear on the schedule but have been sold, returned, or written off, adding any equipment acquired during the policy period that is not currently listed, and updating scheduled values to reflect current replacement costs rather than depreciated book values.

One category contractors consistently miss: technology and field equipment. Laptops, tablets, GPS units, and laser measurement devices have real replacement costs. They also travel with crews daily, making them some of the most exposed assets on your program. Most were not on anyone’s radar when the original policy was set up years ago.

When to Do It — and How Often

The most natural time is 60 to 90 days before your policy renewal, giving your broker room to market updated values and structure coverage before the new period begins. The Dynamic Risk Synergy Portal offers loss control resources that complement a commercial insurance coverage review, helping identify both operational gaps and insurance program vulnerabilities before they become claims. At minimum, a formal equipment schedule review should happen once a year. If you have had a significant year — major acquisitions, new project types, expanded operations — more frequent reviews are warranted. Your insurance program is only as accurate as the information behind it.

Ready to make sure your equipment coverage reflects what your business actually owns? The team at Tooher-Ferraris has been helping contractors build accurate, complete insurance programs since 1932. Contact us today to schedule a no-obligation consultation.