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Construction

September 22, 2026

Errors and Omissions Coverage for Design-Build Contractors: What It Covers and Why Your GL Does Not

Errors and omissions insurance, called professional liability or E&O in the design context, is the coverage that addresses what general liability explicitly excludes for design-build contractors. Understanding how it works, when it responds, and how to size it appropriately is foundational to building an insurance program that actually covers the exposure profile design-build project delivery creates. Here are the four most important questions design-build contractors ask about E&O coverage, answered directly.

What Does E&O Insurance Actually Cover for a Design-Build Contractor?

E&O insurance covers claims arising from professional services, including design decisions, specifications, calculations, drawings, and professional advice that form part of a design-build project. When a claim alleges that a design error, specification issue, or professional judgment caused damage or financial loss to a project owner or third party, E&O coverage is generally the policy designed to respond.

The coverage grant in a design-build E&O policy is typically framed around “wrongful acts” in the performance of professional services. A wrongful act is a negligent act, error, or omission in the performance of professional services that results in a claim. The coverage does not require that the design-build firm intended to make an error. It requires that a claimant can establish that a professional services failure occurred and that the failure caused a loss.

In practical terms, E&O responds to claims such as: a waterproofing system failure attributed to a specification error in the waterproofing detail; a structural element that fails to perform as designed due to a calculation error; a mechanical system that does not meet performance specifications because of a design coordination error between disciplines; and a project that cannot be occupied because a code compliance error in the design requires expensive remediation. These are all professional services failures, and none of them are covered by a standard commercial general liability policy.

How Is E&O Different From General Liability and Why Do Design-Build Firms Need Both?

The distinction between E&O and GL coverage is fundamental to understanding why design-build firms face a unique insurance requirement that traditional design-bid-build contractors do not.

General liability insurance generally covers claims for bodily injury and property damage arising from the physical operations of a business, including construction work performed by the firm’s crews on a job site. If a third party is injured because of a condition created by the construction work, or if construction activities damage adjacent property, GL coverage may respond.

GL policies typically contain a professional services exclusion that limits coverage for claims arising from the rendering or failure to render professional services. Design decisions, specifications, and engineering calculations generally fall within the scope of professional services. When a claim attributes damage to a design error rather than a construction defect, the GL policy may not respond because of the professional services exclusion.

In a traditional design-bid-build project, the architect carries E&O for the design and the contractor carries GL for the construction. Each party’s coverage corresponds to their scope. In a design-build project, both scopes are merged under a single entity. That entity’s GL policy excludes the design exposure, and without E&O coverage in place, the design error exposure is uninsured.

Both policies are required because a design-build claim rarely allocates neatly to one category or the other. A waterproofing failure may involve a design specification error and a construction installation defect. Both policies need to be in place and properly coordinated for the full liability exposure to be covered. When only one policy exists, the other policy’s exclusion defines the coverage gap.

What Triggers an E&O Claim for a Design-Build Contractor?

E&O policies are written on a claims-made basis, which means two things: the policy in force when a claim is first made not when the alleged error occurred is the policy that responds, and coverage ends if the policy lapses or is not renewed after the firm completes the project.

A claim is typically triggered when the project owner or a third party makes a written demand for compensation arising from an alleged professional services failure. In design-build contexts, claims commonly arise during or after construction when: a structural element does not perform as specified; a system fails during commissioning or shortly after occupancy; a code compliance issue discovered during inspection requires design revision and additional construction cost; or a post-occupancy investigation attributes a building defect to a design error rather than a construction defect.

The claims-made structure of E&O coverage creates a specific risk for design-build firms. If a firm completes a project and later allows its E&O policy to lapse, whether because it has no active projects or is between coverage periods, claims arising from completed projects may have no active policy under which to be reported. Tail coverage endorsements, also known as extended reporting period endorsements, are designed to address this risk. A tail endorsement provides a reporting window, often three to five years for construction projects, during which the firm can report claims arising from professional services provided before the policy lapsed, even though the policy is no longer active.

How Much E&O Coverage Does a Design-Build Contractor Actually Need?

There is no single E&O limit that fits every design-build contractor. The right amount depends on the firm’s professional services, project mix and contract requirements. Three factors should guide the review.

1. The potential cost of a design error. A design fee is a useful measure of the services performed, but it is not a ceiling on a claim. On a $4 million project with a $400,000 design fee, an error could lead to redesign, construction rework, delays or other alleged losses that exceed the fee. Evaluate the possible consequences of an error in the firm’s actual scope of work when selecting a limit.

2. Project complexity. Structural systems, mixed-use occupancy and complex mechanical, electrical and plumbing coordination can increase the potential severity of a professional liability claim. Consider the largest and most technically demanding projects the firm takes on, along with whether claims from multiple projects could draw on the same annual policy limit. irmi.com

3. Owner contract requirements. Review proposed insurance terms before bidding or signing. Required limits, the length of time coverage must remain in place and the insurance carried by design consultants can all affect the program. The Design-Build Institute of America’s sample insurance exhibit provides spaces for the parties to specify insurance types and limits; it does not prescribe one limit for every project. store.dbia.org

E&O should also be reviewed alongside general liability, umbrella and builder’s risk coverage. Those policies address different exposures, and an umbrella should not be assumed to increase the E&O limit. Tooher-Ferraris helps contractors evaluate their project mix and coordinate coverage through its specialty programs and broader commercial insurance services. Tooher-Ferraris

Is your E&O limit appropriate for the projects you are pursuing? Contact Tooher-Ferraris to schedule a no-obligation consultation.

Frequently Asked Questions

Does my GL policy cover any design-related claims?

Standard commercial general liability policies typically contain a professional services exclusion that limits coverage for claims arising from design errors, specifications, or professional advice. Some GL policies may include endorsements that provide limited coverage when construction operations cause damage, even if a design error also contributed to the loss. However, this is not standard and should be confirmed by reviewing the specific policy language rather than assumed.

For design-build firms, E&O coverage is specifically designed to address professional liability arising from design services and related errors or omissions.

What is the difference between E&O and professional liability insurance?

In the design and construction context, E&O and professional liability are different names for the same product. The term “errors and omissions” is commonly used in technology and some professional services contexts; “professional liability” is the term more commonly used in architecture, engineering, and design-build contexts. The coverage grant, the claims-made structure, and the tail coverage considerations are the same regardless of which term is used.

How long should my E&O tail coverage extend after project completion?

The appropriate tail period depends on the type of projects completed and the statute of limitations applicable to professional liability claims in the relevant jurisdiction. For most commercial construction projects, a tail period of three to five years after substantial completion is the minimum reasonable standard. Projects with long-term performance warranties, complex structural systems, or significant public use exposure warrant consideration of longer tail periods. Consult with your insurance broker about the specific tail requirements for the types of projects your firm completes before allowing an E&O policy to lapse.

Employee Benefits

September 12, 2026

Your Benefits Renewal Is Not a Negotiation Unless You Have the Data to Negotiate With

Here is an uncomfortable truth about benefits renewal: for most employers, it is not a negotiation at all. It is a cost-acceptance exercise with a few rounds of back-and-forth to make everyone feel better about the number they were always going to land on. The carrier knows what the claims data says. The employer does not. That information asymmetry determines who controls the conversation and in most mid-market renewal situations, it is not the employer.

Employers who consistently achieve better renewal outcomes do not negotiate harder. They eliminate the information asymmetry before the renewal conversation begins. They arrive at the carrier’s table with their own claims analysis, their own benchmark data, and a documented understanding of exactly which plan design levers would move their cost trend. That is not a harder negotiation. It is a different kind of conversation entirely.

What the Carrier Knows That You Probably Do Not

Your carrier receives your claims data on a monthly basis. Their actuaries have already modeled your projected claims trend, identified your high-cost claimants, categorized your specialty drug utilization, and set your renewal rate accordingly. When they present your renewal, they know precisely why it is what it is. When most employers receive that renewal, they know only the bottom line.

This gap is not accidental. Carriers benefit from employers who negotiate based on intuition rather than data, because intuition-based negotiation typically produces incremental concessions, such as a few percentage points of rate reduction, without addressing the underlying claims drivers. An employer who negotiates a renewal from a 12% increase down to 9% without addressing the high-cost claimant concentration or the specialty drug utilization driving the increase will receive another 10% renewal the following year.

The Three Data Sets That Actually Move Renewal Outcomes

Three specific categories of data change what is possible in a renewal conversation.

Claims trend analysis by category: Understanding whether your cost increase is driven by inpatient utilization, outpatient services, emergency department use, or pharmacy, and within pharmacy, by GLP-1 medications, specialty biologics, or retail fills, tells you which plan design levers are worth pulling. A carrier proposing a higher deductible to address a cost problem that is entirely driven by specialty pharmacy is proposing the wrong solution. You can only identify that mismatch if you have the claims data to show where your spend is actually concentrated.

High-cost claimant identification and management: In most mid-market employer health plans, 5% of members account for 50% or more of total claims cost. Identifying who those members are, not by name, but by condition category and care pattern, and connecting them to disease management programs, case management support, and high-value providers is the single highest-ROI intervention available in health plan management. Carriers have this data. They can be compelled to share it as part of the renewal process. Most employers never ask for it.

Benchmarking against peer employers: Knowing that your plan costs $18,500 per employee is useful only in the context of what comparable employers in your industry and geography are paying. If your peer group average is $16,800, you have a substantive basis for a plan design conversation. If your peer group average is $19,200, the conversation shifts toward understanding why your claims experience is favorable relative to market. Benchmarking data, by industry, by plan design type, by geographic market, is the context that transforms a renewal number from an isolated data point into a negotiating position.

What to Do in the Ninety Days Before Your Renewal Date

The work done before a benefits renewal gives employers more time to understand a proposed rate and evaluate their options. Start these three steps about 90 days before renewal, or earlier if your carrier’s quoting schedule requires it.

1. Request the available claims analysis. Ask your carrier or third-party administrator for medical and pharmacy claims reports, cost trends and information about large claims. The level of detail available depends on the plan arrangement and privacy requirements. Review results by category to see whether costs reflect a broader trend or a small number of unusually large claims. Keep any claimant-level information within the plan’s permitted privacy and administration processes. HHS.gov

2. Benchmark the plan. Compare premiums, employer contributions, deductibles, networks and utilization with relevant employers. Tooher-Ferraris’ data analytics and benchmarking services can help put the plan’s results in context. Broader references, such as the International Foundation of Employee Benefit Plans’ 2027 health care cost survey and SHRM’s 2026 Employee Benefits Survey, can add market context, though they do not replace a comparison with similar plans. Tooher-Ferraris

3. Prepare plan design options. Model changes that address the cost drivers you found, such as pharmacy formulary adjustments, care management support or different network options. Estimate both employer savings and the effect on employees before choosing a direction. Entering the renewal discussion with evaluated alternatives gives you a clearer basis for negotiating and deciding what is right for the workforce.

Tooher-Ferraris helps employers use claims insights and market comparisons to build a practical employee benefits strategy ahead of renewal. Tooher-Ferraris

Ready to prepare for your next renewal? Contact Tooher-Ferraris to schedule a no-obligation consultation.

Frequently Asked Questions

What data should employers request from their carrier before renewal?

Employers should request a full claims experience report broken down by category, including inpatient, outpatient, emergency, and pharmacy, along with a high-cost claimant summary that is de-identified as required by regulation and shows the concentration of claims among the highest-cost members. Specialty drug utilization data, including the specific therapeutic categories driving pharmacy cost increases, is also essential for determining whether plan design changes or PBM contract adjustments are the appropriate response.

How does benefits benchmarking improve renewal outcomes?

Benchmarking establishes what comparable employers in your industry and geography are paying for similar plan designs. When your plan’s cost is above benchmark, you have a factual basis to challenge the carrier’s assumptions about expected claims trend. When your plan’s cost is below benchmark, the data helps you make an informed decision about whether to invest savings in plan design improvements or retain them as a cost advantage.

Why do most employers not use data in their renewal process?

The primary reason is access: most employers do not know they can request detailed claims experience data from their carrier, or they assume the data will be difficult to interpret without actuarial expertise. The second reason is timing: the data is most valuable when analyzed 60 to 90 days before renewal, but many employers do not begin the renewal process until they receive the carrier’s initial offer. By that point, the data can inform a response, but it is too late to support a proactive strategy.

Employee Benefits

September 10, 2026

Tooher-Ferraris Named a Top-Rated Benefits Consultant for 2026

We are proud to announce that Tooher-Ferraris Insurance Group has been named a Top-Rated Benefits Consultant for 2026 by Mployer, the industry leader in employee benefits analytics and research.

Fewer than 10% of benefits consulting firms nationwide receive this distinction. The recognition reflects our team’s experience, industry knowledge and commitment to helping employers build effective employee benefits programs.

What Is the Mployer Top-Rated Benefits Consultant Award?

Mployer evaluates employee benefits consultants using independent data and client feedback. Its evaluation considers factors such as a firm’s experience across different industries, employer sizes and plan designs, as well as client ratings and reviews.

The Top-Rated Benefits Consultant designation helps employers identify firms with a demonstrated ability to provide knowledgeable guidance, responsive service and effective benefits solutions.

For Tooher-Ferraris, this recognition validates the consultative approach we bring to every client relationship. Our goal is not simply to place coverage. We help employers understand their options, make informed decisions and develop benefits programs that support their financial and workforce objectives.

Learn more about our employee benefits services.

What This Recognition Means for Our Clients

While we are honored to receive this award, its greatest significance is what it represents for the organizations we serve.

Proven Experience

Employee benefits decisions affect an organization’s finances, ability to recruit and retain employees and overall employee experience. Clients need an advisor who understands these competing priorities and can help bring them into balance.

This recognition reflects the experience our team brings to benefits strategy, plan design, carrier negotiations, compliance and employee communication.

Strategies Tailored to Each Organization

No two employers face exactly the same challenges. Company size, workforce demographics, industry risks, geographic reach and organizational goals can all influence the right benefits strategy.

Our clients receive recommendations developed around their specific needs. We evaluate available data, identify opportunities and help employers consider solutions that align with their budgets and employees’ needs.

Support in a Complex Benefits Environment

Healthcare costs continue to rise while regulations, employee expectations and available benefits solutions continue to change. Employers need more than an annual renewal presentation. They need ongoing guidance from a team that can help them anticipate challenges and evaluate new opportunities.

Our consultants work alongside clients throughout the year to monitor plan performance, navigate compliance responsibilities and respond to emerging workforce needs. We also provide educational opportunities to help employers stay informed. Visit our events page to explore upcoming webinars and programs.

A Focus on Value, Not Just Price

Controlling costs is an important part of every benefits strategy, but the lowest-cost option is not always the best long-term solution. We help clients assess the total value of their programs, including plan performance, employee utilization, administrative efficiency and the ability of benefits to support recruitment and retention.

This approach enables employers to make decisions based on meaningful information rather than price alone.

A Trusted, Long-Term Partnership

Benefits consulting is built on trust. Employers rely on their advisors to provide objective guidance, communicate clearly and advocate for their interests.

The Mployer recognition reinforces our commitment to being a responsive and dependable partner. Our clients can feel confident that they are working with a team recognized for its capabilities, service and dedication to positive outcomes.

Continuing to Raise the Standard

Being named a Top-Rated Benefits Consultant is an important milestone, but it does not change our focus. We will continue to invest in our people, technology and resources so we can bring clients new ideas, better insights and practical strategies.

We are grateful to our clients for placing their trust in Tooher-Ferraris. Their partnership challenges us to keep improving and inspires us to deliver an exceptional experience every day.

If your organization is reviewing its employee benefits strategy or looking for a more proactive consulting relationship, request an employee benefits consultation with the Tooher-Ferraris team.

Employee Benefits

September 10, 2026

You Added GLP-1 Coverage. Now What? Building the Wellness Strategy Around It.

Picture this: an HR director at a mid-sized manufacturing company reviews the renewal package. The pharmacy line is up 18%. The carrier flags GLP-1 medications as the primary driver. The company added GLP-1 coverage for weight management eighteen months ago because employees asked for it, and because the benefits consultant said it was becoming standard. Nobody designed a clinical access strategy. Nobody integrated it with the wellness program. Nobody established success metrics. The coverage was added as a benefit feature, not as part of a population health strategy. The cost showed up. The outcomes did not.

This scenario is playing out across the mid-market. GLP-1 medications now account for approximately 14% of all US prescription drug spending in 2026, according to HFMA. Among employers who added coverage without a structured clinical framework, the cost trajectory has been difficult to justify at renewal. Among employers who integrated GLP-1 coverage into a comprehensive wellness strategy, the data looks materially different.

Why Coverage Without Strategy Produces the Wrong Outcome

GLP-1 medications are clinically effective. The evidence on weight reduction, glycemic control, cardiovascular risk reduction, and kidney health outcomes is robust and expanding. The problem is not the drug. The problem is that a prescription benefit, in isolation, does not produce population health outcomes. It produces prescription fills.

Obesity contributes to more than 60 chronic conditions and results in 66% higher annual healthcare costs for affected individuals, according to research cited by SHRM. Addressing obesity at the population level, which GLP-1 coverage theoretically enables, requires sustained clinical support, behavioral change infrastructure, and ongoing monitoring. An employee who fills an Ozempic prescription but has no access to nutritional counseling, no integration with a weight management program, and no clinical follow-up is likely to discontinue the medication within six months. The research on GLP-1 discontinuation rates is consistent: without structured support, most patients stop taking the medication before reaching clinically meaningful outcomes, and the costs of the prescriptions they did fill generate no long-term savings.

What a GLP-1 Wellness Strategy Actually Requires

The employers producing favorable GLP-1 outcomes have built three things that employers who simply added the pharmacy benefit have not.

Clinical access criteria tied to population health goals: Access to GLP-1 coverage for weight management should be tied to documented clinical criteria, BMI thresholds, comorbidity presence, or a combination, rather than open to any employee who requests a prescription. Clinical criteria serve two purposes: they direct coverage to the employees most likely to benefit from GLP-1 therapy and least likely to discontinue, and they reduce the actuarial cost of the benefit by focusing utilization on the highest-need population. A well-designed access policy also requires initial evaluation by a primary care physician or endocrinologist, establishing the clinical relationship that ongoing monitoring depends on.

Integration with a weight management and disease management program: A GLP-1 prescription without behavioral support is a pharmacological intervention without the behavioral change infrastructure that determines whether weight loss is sustained. Employers who have integrated GLP-1 coverage with structured weight management programs, including nutritional counseling, activity goals, and regular clinical check-ins, report significantly better adherence rates and outcomes than those who offered the drug as a standalone pharmacy benefit. The population health management services at Tooher-Ferraris help employers design and deploy these support structures as a coordinated extension of the health plan, not as a separate wellness program that competes with it.

PBM contract alignment and rebate optimization: GLP-1 medications carry significant list prices. Brand-name drugs approved for weight management can cost more than $1,000 per month per patient without rebates or negotiated discounts. The net cost to the employer is substantially determined by PBM contract terms: rebate pass-through rates, formulary positioning of specific agents, and step therapy requirements that prioritize lower-cost alternatives within the therapeutic class where clinically appropriate. Employers whose PBM contracts were written before GLP-1 medications represented a significant portion of pharmacy spend may be operating under terms that do not reflect current market dynamics for this drug class.

How to Measure Whether the Investment Is Working

A renewal discussion about GLP-1 coverage should include more than pharmacy spending. Employers can use three measures to assess costs, access and outcomes over time.

1. Total cost of care. Combine medical and pharmacy claims to track spending for members using GLP-1 medications over rolling 12-month periods. Compare results with their own costs before treatment and, where feasible, with a group that has similar health characteristics. A simple comparison with all non-users can be misleading because the groups may have different health needs at the outset.

2. Relevant health outcomes. Work with clinical and analytics partners to select measures that fit the population and the medication’s approved use. Changes in weight, blood pressure or other appropriate clinical measures may be useful when reliable data is available. A change in diagnosis counts alone does not prove that treatment improved health or reduced costs.

3. Treatment continuation. Track how many members remain on treatment at set intervals and investigate why others stop. Side effects, affordability, access barriers and treatment response can all play a role; a high discontinuation rate does not automatically point to a lack of behavioral support. Research on GLP-1 discontinuation among patients with obesity identifies several such reasons. PMC

Tooher-Ferraris helps employers connect coverage decisions with wellness and population health management and pharmacy management. Bringing those services together can help employers define meaningful measures before the next renewal. Tooher-Ferraris

Ready to assess your GLP-1 strategy using both cost and outcome data? Contact Tooher-Ferraris to schedule a no-obligation consultation.

Frequently Asked Questions

Why does GLP-1 coverage cost more for some employers than others?

The cost difference is driven primarily by three factors: the breadth of access criteria (open access versus clinically restricted access), the presence or absence of integrated behavioral support programs that improve adherence and outcomes, and PBM contract terms that determine the net cost of the drug after rebates and discounts. Employers with narrow clinical criteria, strong support programs, and competitive PBM contracts consistently report lower per-member GLP-1 costs than those without these elements.

What clinical criteria should employers use for GLP-1 coverage?

Most employers tie GLP-1 coverage for weight management to a BMI threshold of 30 or above, or a BMI of 27 or above with a qualifying comorbidity such as type 2 diabetes, hypertension, or sleep apnea. Some employers also require documented failure of a structured diet and exercise program before approving GLP-1 therapy for weight management. These criteria align with FDA labeling and focus coverage on the population most likely to achieve clinically meaningful outcomes.

How do you measure the ROI of GLP-1 coverage in an employer health plan?

The most meaningful ROI metric is total cost of care trend for GLP-1 users compared to a matched control group of non-users, measured over 12 to 18 months. Aon’s research across 192,000 GLP-1 users found 3% medical cost growth versus 9% for a control group, a gap attributable to reduced utilization for obesity-related conditions. Employers who track only pharmacy costs see the cost side without the medical cost offset that represents the long-term value of the coverage.

Construction

September 9, 2026

Concrete Transfer Slabs, Punching Shear, and the Professional Liability Underwriting Crisis Design-Build Firms Can’t Ignore

A design-build firm working in mid-rise residential and mixed-use construction receives its professional liability renewal package. The carrier has added a new application requirement: a documented legacy review of all projects completed in the past ten years that involved concrete transfer slabs, post-tensioned flat plate systems, or structural elements with punching shear connections. Renewal is contingent on the review. The firm has six weeks to produce documentation it was not expecting to need.

This is not an isolated scenario. Beginning in mid-2026, a significant number of professional liability carriers have moved to treat concrete transfer slab and structural punching shear exposure as a heightened underwriting category, requiring affirmative documentation of past projects before writing new or renewal terms for design-build firms with this exposure profile. The shift is a direct response to a pattern of structural failures and near-failures in post-2010 construction that have generated large professional liability claims and drawn intense scrutiny from structural engineers, building officials, and the insurance industry simultaneously.

What Is Driving the Carrier Concern

Concrete transfer slabs are structural elements that redirect gravity loads from upper-story columns to a different column grid below. They are commonly used in mixed-use buildings where residential floors have a different structural layout from the retail, parking, or commercial spaces below. Punching shear is a failure mode that occurs when a concentrated load, such as a column bearing on a flat-plate slab, causes the slab to fail around the column rather than through conventional bending. Both systems require precise engineering, detailed connection design, and rigorous quality control during concrete placement and curing.

The professional liability exposure arises from two primary sources. First, errors in transfer slab geometry, post-tensioning layouts, or shear reinforcement detailing can create structural deficiencies that may not be immediately visible but can contribute to progressive loading concerns over time. Second, the complexity of these systems can allow design errors to carry through construction without detection, particularly in design-build projects where the same entity is responsible for both the design and the construction quality control that might otherwise identify a detailing issue before the concrete is placed.

Cases involving distress in concrete transfer slabs, including post-construction investigations that identified inadequate punching shear reinforcement in completed and occupied buildings, have resulted in professional liability claims and potential claims. These cases have also drawn attention to the broader risk associated with this type of structural system. The consequences of failure can be significant, defects may remain undetected for years, and the design-build delivery model can place both design responsibility and construction quality control with the same entity.

What a Legacy Project Review Requires

The legacy review that carriers are now requiring is not a brief questionnaire. It is a documented technical analysis of the firm’s past projects that involved the relevant structural systems. What carriers expect to see varies by underwriter, but the core elements are consistent across the market.

Project inventory with structural system identification: A complete list of projects completed during the specified lookback period, typically five to ten years, should identify which projects involved concrete transfer slabs, post-tensioned flat-plate systems, punching shear connections, or similar structural configurations. Firms that cannot produce this inventory may face an immediate underwriting concern. If a firm does not know which past projects involved these systems, it cannot demonstrate that those projects have been identified and reviewed.

Design documentation and peer review records: For projects with relevant structural exposures, carriers may ask for evidence that the structural design was peer-reviewed by a qualified structural engineer who was independent of the design team. Peer review documentation, particularly for transfer slab geometry and punching shear reinforcement details, demonstrates that an independent professional evaluated critical design decisions before construction. Firms that routinely conduct peer reviews for complex structural systems and maintain documentation of those reviews can provide stronger evidence of their quality control processes than firms that rely solely on internal review.

Post-construction status of relevant projects: Carriers want to know whether any of the identified projects have generated complaints, warranty claims, structural investigations, or construction defect notices since completion. A firm that can affirmatively document that its completed concrete transfer slab projects have not generated any structural concerns is providing the most direct evidence available that its past design work has performed as intended. A firm that has received post-construction structural inquiries on relevant projects, even informal ones, needs to address those proactively in the underwriting submission rather than allow the carrier to discover them during the application review.

Current quality control protocols for ongoing and future projects: Beyond the legacy review, carriers are evaluating what the firm does differently going forward. Updated specifications for punching shear reinforcement, mandatory peer review triggers for transfer slab projects, enhanced quality control during concrete placement for critical structural elements, and contractual provisions requiring special inspection of relevant connections are all viewed favorably. Firms that can document that the underwriting concern has been reflected in their current practice are demonstrating risk management maturity that translates directly into underwriting treatment.

What Firms Without Documentation Should Expect

A design-build firm with limited records for completed structural projects should address that gap before its professional liability renewal. Start by identifying projects involving concrete transfer slabs or punching shear design, then locate the available calculations, drawings, design changes, quality control records and peer review reports. Discuss missing materials with the firm’s design professionals and insurance adviser so the renewal submission accurately describes the work performed and the records available.

Carriers may ask additional questions about complex structural work. The terms offered will depend on the firm, its projects and the insurer; an exclusion, higher retention or demand for an independent review should not be presented as a standard 2026 underwriting requirement without evidence from the carrier. If an independent engineering review is appropriate, define its scope with qualified professionals before commissioning it. The American Society of Civil Engineers’ policy on peer review explains the role of an independent evaluation alongside a project’s normal quality control. Peer review

The coverage review should also examine how the policy treats completed work, prior acts, exclusions and the design services performed by subcontractors. The Design-Build Institute of America’s sample insurance requirements illustrate why professional liability coverage needs to match the scope of services under the contract. store.dbia.org

Tooher-Ferraris helps design-build contractors review professional liability coverage in the context of their project history and broader commercial insurance program. Explore its specialty programs or contact the team to discuss an upcoming renewal.

Frequently Asked Questions

Which design-build firms are affected by the concrete transfer slab underwriting shift?

The shift primarily affects design-build firms that have completed projects involving concrete transfer slabs, post-tensioned flat-plate systems with punching shear connections, or similar structural configurations in mixed-use, residential, or commercial construction. Firms that work exclusively with structural systems that do not involve these elements, such as wood-frame construction, steel-frame construction without concrete transfer elements, or masonry, are generally not subject to this specific underwriting concern.

What is a punching shear failure and why does it concern professional liability carriers?

Punching shear is a structural failure mode in which a concentrated load, typically a column bearing on a flat-plate concrete slab, causes the slab to fail around the column rather than through conventional bending. The failure can occur suddenly and may have severe consequences in occupied buildings. Professional liability carriers focus on punching shear exposure because failures may be linked to design detailing errors or inadequate shear reinforcement specifications, creating potential professional liability claims against the engineers and design-build firms responsible for the design.

What should my firm do if we have concrete transfer slab projects in our history and our PL renewal is approaching?

Begin the legacy review process well before your renewal date, ideally four to six months in advance. Compile a project inventory that identifies relevant structural systems. Gather peer review documentation for the projects with highest structural complexity. Confirm the post-construction status of completed projects and document any structural inquiries or concerns that have been received and how they were resolved. Work with your insurance broker to prepare a proactive underwriting narrative that presents this information affirmatively rather than allowing the carrier to discover gaps during application review.

Personal Lines

September 6, 2026

Around 60% of Homeowners Are Underinsured. Here Is How to Find Out If You Are One of Them.

Around 60% of homeowners are underinsured, meaning their dwelling coverage falls short of the actual cost to rebuild their homes, according to industry estimates cited by Financial Sense in early 2026. Only about 30% of homeowners have increased their coverage to match rising building costs, even though cumulative construction costs have risen more than 30% in recent years. The average construction cost of a typical single-family home reached $162 per square foot in 2024, up from $80 per square foot in 2011. For homeowners in affluent suburban markets where finish quality and labor costs run above national averages, that figure is often higher.

The underinsurance gap does not announce itself. It is invisible during routine claims, a broken pipe, storm damage to a roof, a fallen tree, where the loss falls within policy limits regardless of whether the dwelling coverage is adequate. The gap becomes catastrophic during total losses, when the rebuild cost exceeds the policy limit and the homeowner is responsible for the difference out of pocket. Four misconceptions drive most of the underinsurance problem.

Myth 1: My Home’s Market Value Is My Replacement Cost

Market value and replacement cost are two different numbers that bear no reliable relationship to each other. Market value includes the land on which the home sits. Land is never destroyed in a fire or storm and is never what an insurance policy covers. Replacement cost is the expense of rebuilding the physical structure from the foundation up, using current labor and material costs and complying with current building codes.

In most markets, land accounts for 25% to 50% of a property’s market value. A homeowner who insures a $900,000 home for its full market value is almost certainly overinsuring the dwelling while carrying inadequate personal property and liability coverage. Alternatively, they may have chosen their Coverage A limit based on the wrong number entirely.

The correct number is the replacement cost estimate, which accounts for square footage, construction type, finish quality, local labor costs, and current material prices. Most carriers offer replacement cost estimator tools; independent appraisals provide additional validation for homes with custom finishes or non-standard construction.

Myth 2: The Insurance Company Set the Right Limit When I Bought the Policy

The dwelling coverage limit set at policy inception reflected rebuild costs at that time, using whatever estimating methodology the carrier applied at the time of underwriting. Construction costs have risen sharply and unevenly since 2020. A limit that was adequate in 2021 may be meaningfully inadequate today, because the rebuild cost of the same house has increased while the policy limit has increased only modestly, if at all.

After Colorado’s Marshall Fire, 74% of policyholders were found to be underinsured, and 36% were severely underinsured, meaning their coverage was below 75% of the actual rebuild cost. Those homeowners did not choose to be underinsured. They accepted the limit their carrier set at policy inception, assumed the annual inflation guard increase was keeping pace with actual cost increases, and discovered the gap only when they needed to rebuild.

Myth 3: My Inflation Guard Endorsement Keeps My Coverage Current

An inflation guard may increase your dwelling limit at each renewal, but that increase is not the same as a fresh estimate of what it would cost to rebuild your home. Local labor costs, materials, building requirements and renovations can change the replacement cost at a different pace. The Bureau of Labor Statistics’ Producer Price Index data can show changes in construction inputs, though a local rebuild estimate is needed to assess an individual home. bls.gov

For example, if a dwelling limit rises 4% while the estimated rebuild cost rises 12% in the same year, the coverage gap widens. Those percentages are an illustration, not a forecast. Ask for an updated replacement cost estimate at renewal, particularly after renovations or substantial changes in local construction costs.

Myth 4: The Gap Is Small Enough to Manage Out of Pocket

Underinsurance can leave a substantial amount for a homeowner to fund. Research on claims following Colorado’s Marshall Fire found that 74% of the policyholders studied were underinsured. A reported average shortfall of $139,000 illustrates the potential scale of the problem, but it should not be treated as the expected gap for every home. colorado.edu

Two features are worth discussing at renewal. Extended replacement cost can provide a specified amount above the dwelling limit for a covered rebuild. Guaranteed replacement cost, where available, may pay the eligible cost to rebuild even if it exceeds that limit. Both remain subject to policy terms and conditions; neither replaces an accurate starting estimate. The Insurance Information Institute explains how these settlement options work. Triple-I®

Tooher-Ferraris can help homeowners review dwelling limits and available coverage options through its home insurance services. Households with more complex properties can also explore its Private Client Group. Tooher-Ferraris

Frequently Asked Questions

How do I find out if my home is underinsured?

The most reliable method is to compare your current Coverage A dwelling limit against an updated replacement cost estimate that accounts for your home’s actual square footage, construction type, finish quality, and current local labor costs. Many carriers provide replacement cost estimator tools at no charge; independent appraisals from a certified appraiser or local contractor provide additional validation. Any significant renovation, addition, or improvement since the last estimate requires a new calculation.

What is the difference between market value and replacement cost for insurance purposes?

Market value is the price a buyer would pay for the property, including the land. Replacement cost is the expense of rebuilding the physical structure from the foundation up at current labor and material costs. For insurance purposes, the relevant number is replacement cost. Land is not destroyed in a covered loss and is not what a homeowners policy covers. In most markets, replacement cost is significantly lower than market value, which means insuring at market value results in overcoverage on the structure and often inadequate coverage elsewhere.

Does an extended replacement cost endorsement eliminate the underinsurance risk?

An extended replacement cost endorsement significantly reduces but does not eliminate underinsurance risk. It provides a buffer of 20% to 50% above the stated dwelling limit, covering cost overruns that occur between a loss and the completion of reconstruction. It does not correct a fundamentally inadequate dwelling limit. If the Coverage A limit is set 40% below actual rebuild cost, a 25% extended replacement cost endorsement still leaves a gap. The endorsement works best as a buffer against post-disaster cost escalation, not as a substitute for maintaining an accurate base limit.

Ready to find out if your home coverage keeps up with what it would actually cost to rebuild? The team at Tooher-Ferraris has been helping homeowners protect their most valuable assets since 1932. Contact us today to schedule a no-obligation consultation — https://toofer.com/contact-us/

Business Insurance

September 5, 2026

Directors and Officers Insurance for Private Companies: What Changed in 2026 and Why It Matters Now

Picture this: a mid-sized company has operated successfully for eleven years. A combination of rising input costs, a softening market for its services, and tighter credit conditions has created cash flow stress over the past eighteen months. The business continues operations, takes on additional working capital debt, and makes several asset dispositions to manage liquidity. Twelve months later, the business files for restructuring. The lender, facing a significant shortfall, files a breach of fiduciary duty claim against the company’s management team personally.

The company has general liability insurance. It has commercial property coverage. It has an employment practices liability policy. It does not have directors and officers insurance. The claim against management, for decisions made during a financially stressed period, has no insurance response. The individuals who served as directors and officers of that company are personally exposed.

This scenario is not hypothetical. It is the most common private company D&O claim type in the current market, and it is playing out with increasing frequency as rising operating costs and tighter credit conditions have stressed mid-market businesses across industries. D&O insurance for private companies has stabilized in pricing after years of market correction. At the same time, the three exposure forces driving private company D&O claims are more relevant in 2026 than at any point in the past decade.

The Three Private Company D&O Exposure Forces in 2026

Business insolvency risk is the primary driver of private company D&O claims in the current market. Lenders and creditors facing shortfalls on distressed loans may pursue directors and officers for breach of fiduciary duty, fraudulent conveyance, or mismanagement claims, particularly when the financial distress involved continued operations, asset dispositions, or additional debt that benefited equity holders at the expense of creditors. These claims do not require proof that management acted dishonestly. A creditor may only need to allege that management decisions made during a period of financial stress were not in the best interests of the company as a whole. In an insolvency context, that standard can be applied broadly.

AI governance exposure is an emerging but rapidly accelerating source of D&O liability. Directors and officers who approve the use of AI tools for hiring, performance management, compensation, or customer-facing decisions without establishing adequate governance oversight may be creating personal exposure they do not recognize. The EEOC has made clear that “the algorithm did it” is not a valid defense. Employers can remain liable for disparate outcomes produced by AI tools they have adopted, including tools purchased from third-party vendors. As plaintiffs’ attorneys develop new theories for algorithmic bias claims and regulators increase scrutiny of AI governance, directors who cannot document adequate oversight of AI-driven decisions may face personal liability that their general liability and employment practices policies do not cover.

Employment practices claims against individual officers remain a frequent private company D&O trigger. Wrongful termination, discrimination, and retaliation claims that name individual officers and directors, rather than only the company, can fall within the D&O coverage grant. Many businesses purchase employment practices liability insurance without D&O coverage, creating a gap precisely where the two coverages may overlap. An EPL policy generally addresses the company’s liability for employment claims, while a D&O policy can address the personal liability of individuals named in those claims. When both the company and its officers are named as defendants, both coverages may be needed.

Why the Current Market Is a Favorable Entry Point

D&O insurance pricing peaked in 2021 and 2022 following a period of significant claims activity driven by securities class actions and SPACs. Since then, the market has corrected steadily. By early 2026, D&O has stabilized at flat renewals for most private company primary coverage, with some segments seeing modest reductions. For private companies that have never purchased D&O coverage and are entering the market for the first time, the current environment represents materially better pricing than was available two or three years ago.

The favorable entry point has a practical time limit. The insolvency risk exposure currently driving private company D&O claims reflects current economic conditions, including tighter credit, higher operating costs, and softening demand in several industries. If those conditions improve, the urgency of insolvency-related exposure may decrease. If they persist or worsen, D&O claims could continue to increase, and underwriters may adjust pricing accordingly. The opportunity to enter the D&O market while pricing remains stabilized is now, rather than after another wave of claims activity prompts the market to reprice.

What Private Company D&O Coverage Actually Provides

Private company directors and officers (D&O) insurance generally has three coverage components:

Side A can protect directors and officers personally when the company does not indemnify them, subject to the policy’s terms.
Side B reimburses the company when it indemnifies directors and officers for a covered claim.
Side C, or entity coverage, can protect the company against claims made directly against it. The scope of entity coverage varies by policy, as the Insurance Information Institute explains.

Side A deserves particular attention when a company may be unable to indemnify its leaders, including during financial distress. A review should also consider whether the policy’s limits are shared among the three components, what retention applies and whether dedicated Side A limits are available. These details affect how much protection remains for individuals if multiple claims arise. Chubb’s discussion of management liability risks offers additional context.

For further reading, Hinshaw & Culbertson’s 2026 D&O liability and coverage analysis discusses coverage developments, while AM Best’s D&O market discussion examines the insurance market.

Tooher-Ferraris helps businesses evaluate D&O coverage within a broader management liability program that may also include employment practices and fiduciary liability insurance. Explore its specialty programs and commercial insurance services.

Frequently Asked Questions

Do private companies really need D&O insurance?

Yes. Private company D&O exposure arises from the same types of governance and management decisions that generate public company D&O claims, but through different claim types: lender and creditor claims in distressed situations, employment practices claims naming individual officers, minority shareholder suits in closely held companies, vendor disputes alleging misrepresentation, and AI governance claims. None of these require the company to be publicly traded, and none are covered by general liability or employment practices liability policies alone.

When is the right time to buy D&O insurance?

D&O is a claims-made policy, meaning the policy in force when a claim is reported is the policy that responds. The right time to purchase D&O is before a claim arises, which means before a financial distress situation, before an employment dispute reaches the individual officer level, and before an AI governance incident generates regulatory scrutiny. Companies that purchase D&O after a distress event begins may find prior acts limitations or exclusions that significantly restrict coverage for the events that prompted the purchase.

How is D&O insurance different from general liability?

General liability insurance covers claims involving bodily injury and property damage arising from business operations. D&O insurance covers claims arising from the management decisions and governance actions of directors and officers, including breach of fiduciary duty, misrepresentation, mismanagement, and failure of oversight. These are fundamentally different categories of liability. A business that carries only general liability insurance has no insurance response to a D&O claim, regardless of the size of its GL limits.

Ready to evaluate your directors and officers liability exposure? The team at Tooher-Ferraris has been helping businesses build complete management liability programs since 1932. Contact us today to schedule a no-obligation consultation — https://toofer.com/contact-us/

Personal Lines

September 5, 2026

Standard Policies Were Not Designed for Affluent Families. Here Is What Proactive Risk Mitigation Actually Looks Like.

A family with a primary residence, a vacation property, several vehicles, a boat, a collection of fine art, and significant investment assets renews their personal insurance program every year through a package policy. They increase limits modestly when reminded to, accept the renewal terms without significant review, and assume that because nothing has changed on their end, their coverage is still appropriate. Then a fire at the vacation property reveals that the dwelling limit was set six years ago, before a major renovation increased the replacement cost by 40%. The ordinance-or-law coverage is missing. The fine art in the property was not listed on the floater. The loss is partially covered. The gap is six figures.

This scenario is not a coverage failure in the traditional sense. The policies performed as designed. The issue is that they were designed around a different type of household. Standard personal lines policies are based on actuarial assumptions about typical household characteristics, such as a single primary residence, one or two vehicles, moderate personal property, and liability exposure associated with common family activities. A household with multiple properties, significant personal property across locations, complex liability exposures from business activities and lifestyle factors, and meaningful digital assets does not fit those assumptions. Applying standard policy forms to a non-standard risk profile produces coverage that is adequate in ordinary circumstances and inadequate in the circumstances that actually matter.

The Difference Between Risk Transfer and Risk Mitigation

Most households approach personal insurance as a risk transfer exercise: identify the assets, find a policy that covers them, pay the premium, and move on. Risk mitigation is a different discipline. It begins with a systematic assessment of what can go wrong, evaluates which risks are most significant relative to the household’s financial position and lifestyle, and then addresses those risks through a combination of loss prevention investments, coverage design, and intentional risk retention.

The mitigation component, the investments in loss prevention, changes both the frequency and severity of claims and, with the right insurer relationships, changes what coverage is available and at what cost. A residence with a whole-house generator and a water leak detection system has a different loss profile than an identical residence without those features. Some carriers price that difference meaningfully. Others do not, which means the choice of insurer is itself an important component of a proactive risk management strategy.

What Risk Assessment Before Coverage Design Actually Reveals

A formal risk assessment, conducted before the coverage program is designed rather than after, typically surfaces three categories of exposure that standard renewal processes miss.

Property exposures that have changed since the last full review are the most common finding. Renovations, additions, significant personal property acquisitions, and changes in how a property is used (rented seasonally, occupied by family members, used for business purposes) all change the coverage requirements for that property in ways that a standard renewal does not automatically capture. A vacation residence that has been rented through a short-term rental platform for several seasons has commercial use exposure that a standard homeowners policy may not cover.

Liability exposures that fall outside standard coverage structures represent the second category. A household may have a more complex liability profile if its members serve on nonprofit boards, own property with significant attractive nuisance risks, such as pools, trampolines, or recreational equipment, employ household staff, or participate in recreational activities with substantial third-party liability exposure, including equestrian activities, shooting sports, or motorsports. In these situations, standard umbrella coverage may not fully address the household’s potential exposures.

Coverage coordination failures between policies represent the third category. High-income households often have multiple policies across different carriers, including homeowners, auto, watercraft, umbrella, life, and disability coverage. These policies may have been designed independently without sufficient consideration of how they interact. As a result, coverage gaps that lead to disputes at claim time are often found at the intersections between policies rather than within any single policy.

What a Proactive Risk Mitigation Program Actually Includes

Assess household risks before renewal. An annual review should account for changes to the household as well as changes to policy terms. A renovation, new vacation home, growing collection, household employee or new digital exposure may call for a coverage change. Reviewing these developments before renewal leaves time to update valuations and compare options.

Match prevention measures to the property. Water leak detection and automatic shutoff systems can help limit damage from a plumbing leak. Security, fire protection and lightning protection may also be appropriate depending on the home and its location. Ask your adviser whether a proposed system affects underwriting or qualifies for a credit; benefits vary by carrier. The Insurance Information Institute’s homeowners claims data shows why water damage deserves attention. Triple-I®

Build coverage around the assets and liability exposure. Review dwelling valuation, coverage for fine art and jewelry, umbrella limits and personal cyber protection together. For valuable collections, compare scheduled and blanket coverage, including each option’s valuation terms and per-item limits. No single form or coverage feature fits every household.

Keep records for valuable property. Maintain current appraisals where appropriate, along with photographs, receipts and an inventory of jewelry, art, wine, watches, antiques and collectibles. These records can support both the coverage review and a future claim. Confirm which items should be specifically listed on the policy and how unscheduled property would be valued.

Tooher-Ferraris helps households review these risks through its Private Client Group and home insurance services. High Net Worth Insurance Solutions

Ready for a structured review of your personal insurance program? Contact Tooher-Ferraris to schedule a no-obligation consultation.

Frequently Asked Questions

What is the difference between a standard personal lines policy and a private client program?

Standard personal lines policies are designed around median household characteristics and actuarial assumptions about typical household behavior and risk profiles. Private client programs are designed for households with higher asset values, more complex property and liability exposures, and coverage needs that exceed standard product structures. Key differences include agreed-value coverage on high-value properties, higher and more customizable limits, broader coverage of fine arts and personal property, and coverage structures that address household staff, multiple properties, and lifestyle-specific liability exposures.

How often should a high-net-worth household conduct a full personal insurance review?

Annual review is the minimum standard, conducted before renewal rather than during it. Additional reviews should be triggered by significant household changes: a major property acquisition or sale, significant renovation or addition, a major personal property purchase (art, jewelry, vehicles, watercraft), a change in household composition, a change in business ownership or board membership, or a significant change in net worth or estate structure.

What loss prevention investments have the highest impact on personal insurance programs?

Water leak detection and automatic shutoff systems consistently produce the most meaningful reduction in homeowners claim frequency and severity, as water damage is the most common source of homeowners losses. Whole-house generators address both direct loss from power-related damage and the secondary losses that occur when a property is without power for extended periods. Smart security systems affect both the theft and liability components of the homeowners program. For high-value collections, appropriate climate control and security infrastructure affects both the loss prevention outcome and the coverage available from specialty carriers.

Employee Benefits

September 4, 2026

Open Enrollment 2026: 5 Things Employers Must Do Differently This Year

Most employers will run the same open enrollment they ran last year. They will send the same carrier comparison documents, schedule the same benefits fair, and watch the same employees make the same uninformed decisions. This year, that approach is more expensive than ever. Employers are projecting a 10% increase in healthcare costs for 2026, according to the International Foundation of Employee Benefit Plans, marking the third consecutive year of near-double-digit increases. At the same time, 64% of US employees do not fully understand how their deductibles, premiums, and out-of-pocket maximums interact during a major health event, according to 2026 workplace benefits research. These two trends are not unrelated. Employees who do not understand their benefits make plan selections that drive higher costs for employers and worse outcomes for themselves. Open enrollment done differently is the most direct lever available. Here are five things that actually change outcomes.

1. Audit Your Enrollment Data Before You Design Your Communication

Most open enrollment communication is designed for the average employee which means it works well for nobody in particular. Before designing this year’s materials, pull the enrollment data from the past two cycles and answer three questions: Which plans did employees choose and does the distribution reflect their actual healthcare needs? Which benefits had the lowest utilization rates relative to their cost? Which employee populations had the highest rate of waiving coverage entirely?

The answers to these questions tell you where your communication failed last year. High HDHP enrollment in populations with chronic conditions signals that employees are selecting on premium without understanding total cost of care. Low EAP utilization signals an awareness problem, not a program quality problem. High waiver rates in specific departments or roles often signal confusion about eligibility or cost. Design this year’s communication to address what last year’s data revealed.

2. Replace Generic Communication With Decision-Support Tools

A benefits guide that lists plan options side by side is information. A decision-support tool that asks an employee three questions about their anticipated healthcare usage and recommends a plan is guidance. The difference matters because 46% of employees currently receive no guidance during open enrollment, driving 81% of workers to demand a unified financial guidance platform from their employer, according to 2026 workplace benefits research. Employees who receive guidance make better selections, generate better utilization patterns, and report higher satisfaction with their benefits package, even when the underlying benefits are unchanged.

Decision-support tools range from simple online calculators that help employees estimate their annual out-of-pocket costs under different plan options to full benefits counselor access during the enrollment window. The investment is justified by the downstream impact on adverse selection, unnecessary utilization, and employee satisfaction scores.

3. Address the GLP-1 Coverage Question Before Employees Ask It at the Benefits Fair

GLP-1 medications are now the most-requested benefits addition among employees, and they are the largest single driver of pharmacy cost increases for employers who cover them broadly. Whatever your organization’s coverage decision, whether full coverage, restricted access tied to clinical criteria, or exclusion, employees will ask about it during open enrollment. Having a clear, documented, and consistently communicated coverage policy prevents confusion and reduces the individual conversations HR has to manage during the enrollment window.

If your organization covers GLP-1 medications, the open enrollment window is the right time to communicate the clinical access criteria, any required enrollment in a disease management or weight management program, and how the coverage integrates with your broader wellness strategy. If your organization does not cover GLP-1s for weight management, a brief, factual explanation of the coverage decision and the clinical resources that are available through the existing plan reduces friction significantly.

4. Make the Financial Math Visible, Not Just the Premium

Employees consistently choose lower-premium plans without calculating what higher deductibles and out-of-pocket maximums mean for their actual annual healthcare spend. An employee who shifts from a plan with a $500 deductible and a $3,000 out-of-pocket maximum to a high-deductible plan with a $2,000 deductible and a $6,500 out-of-pocket maximum saves $1,200 per year in premiums but could pay up to $5,700 more in out-of-pocket costs if they experience a significant health event.

Making this math visible during enrollment requires total cost modeling, not just premium comparison. Show employees their estimated annual total cost under each plan based on low, moderate, and high healthcare utilization scenarios. Pair HDHP options with explicit HSA contribution guidance. Employers who help employees understand the financial implications of their plan selection reduce adverse selection, improve plan performance, and reduce the mid-year support burden on HR teams.

5. Build a 90-Day Post-Enrollment Engagement Plan

Open enrollment communication should continue after employees make their selections. Someone choosing a new health plan, enrolling in a high-deductible plan for the first time or adding a dependent may still need help understanding how to use their coverage.

A 30-, 60- and 90-day follow-up plan can address questions as they arise. Early messages can explain when ID cards will arrive, how to access a digital card and where to find in-network providers. Later messages can cover deductibles, HSA contributions and where to get help with a claim or billing question. Give employees a clear contact for questions at every stage.

Tooher-Ferraris helps employers design open enrollment communication and benefits technology processes around the questions employees actually ask. Learn more about our employee benefits strategy and consulting and HR technology consulting.

Ready to improve your open enrollment experience? Contact Tooher-Ferraris to discuss your goals.

Frequently Asked Questions

What is the biggest open enrollment mistake employers make in 2026?

The most consequential mistake is designing enrollment communication for the average employee rather than for specific employee populations with different healthcare needs and financial literacy levels. Generic communication produces poor plan selections, adverse selection risk, and low utilization of high-value benefits, all of which compound into higher costs over time.

How do decision-support tools improve open enrollment outcomes?

Decision-support tools guide employees through plan selection based on their individual anticipated healthcare usage, family situation, and financial context. Employees who receive personalized guidance make plan selections that better match their actual needs, which reduces adverse selection, improves utilization patterns, and increases benefits satisfaction scores without requiring changes to the underlying plan options.

What should employers communicate about GLP-1 coverage during open enrollment?

Employers should communicate their coverage policy clearly and factually, whether they cover GLP-1s broadly, restrict access based on clinical criteria, or exclude them entirely. Employees will ask. Having a documented, consistently communicated answer reduces individual HR conversations during the enrollment window and sets appropriate expectations for the plan year.

Construction

September 3, 2026

Commercial Auto for Contractors: Why Your Fleet Is One of the Most Expensive Lines in Your Program Right Now

Commercial auto remains one of the most challenging lines in construction insurance programs. The segment has reported underwriting losses for fourteen consecutive years, while claim severity has increased approximately 64% since 2015. Rising vehicle repair costs, medical inflation, and increasing liability awards have all contributed to the pressure on commercial auto results. For contractors whose programs include trucks, vans, service vehicles, and heavy equipment with road exposure, commercial auto is the line where rate increases have been most sustained and where underwriting scrutiny has intensified most significantly. Here are six things every construction company needs to understand to manage this line effectively in 2026.

1. The Line Has Been Unprofitable for 14 Consecutive Years and Carriers Are Reacting

The commercial auto market is not in a temporary correction. It is in a structural repricing driven by loss trends that have persistently outrun rate increases. Carriers have responded by tightening underwriting standards, reducing capacity for fleet accounts with adverse loss experience, and requiring documentation of risk management programs that was previously considered optional. A contractor who was written by the same carrier at the same general terms for five years should not assume those terms will remain available. Underwriting reviews are more rigorous, more documentation-intensive, and more likely to result in a material change to terms than at any prior point in recent history.

2. Nuclear Verdicts Are Driving Umbrella and Excess Costs as Much as Primary Auto

The impact of large jury verdicts in commercial auto extends beyond the primary layer. When a commercial vehicle accident results in a verdict that exceeds the primary auto liability limit, the excess and umbrella layers above the primary policy can also be exposed. Multimillion-dollar verdicts against commercial vehicle operators have increased pressure on these higher layers. In response, excess and umbrella carriers have restricted capacity for programs with significant commercial auto exposure and increased rates for umbrella towers that sit above commercial auto primary limits.

Contractors whose umbrella and excess structures were designed before the current nuclear verdict environment should review whether their attachment points and limits still reflect the actual exposure. An umbrella that attaches at $1 million of primary auto liability was sized for a verdict environment where $1 million resolved most serious incidents. In the current environment, that attachment point may be sitting in the middle of the range where serious verdicts are landing.

3. Telematics Is Now an Underwriting Requirement, Not a Best Practice

Carriers underwriting commercial auto for contractor fleets are increasingly treating telematics as a core underwriting input rather than an optional safety measure. Accounts that can provide telematics data showing driver behavior trends, including speeding frequency, hard braking events, distracted driving indicators, and miles driven per vehicle, may receive different underwriting consideration than accounts without this information. The difference can be significant. Fleet accounts with documented telematics programs and favorable driving data may have access to terms that are not available to accounts without comparable documentation.

The practical implication for contractors who have not implemented telematics is that the premium differential between telematics-equipped and non-equipped fleets is now large enough to justify the investment on insurance cost savings alone, before the safety and operational benefits are considered. For contractors evaluating telematics platforms, the key underwriting input is behavioral data, not just GPS location. Carriers want to see what drivers are doing, not just where vehicles are.

4. Driver Qualification and MVR Monitoring Are Being Evaluated at Renewal

The annual motor vehicle record check is no longer the only driver qualification measure contractors should consider in the current market. Carriers are increasingly evaluating whether fleet accounts use continuous MVR monitoring programs that automatically flag changes to a driver’s record between annual reviews. A driver who receives a DUI conviction or accumulates moving violations between scheduled MVR checks can create an exposure that the employer may not know about or be able to address promptly.

Written driver qualification standards are also being evaluated. Carriers want to see documented criteria that define which violations disqualify a driver from operating company vehicles, how violations are reviewed and acted upon, and what training or intervention is required when a driver’s record changes. Accounts with documented programs receive more favorable treatment than those relying on informal management judgment.

5. Vehicle Repair Costs Are Pushing Actual Cash Value Settlements Lower Than Replacement Cost

Modern commercial vehicles, particularly trucks equipped with advanced driver assistance systems, cameras, and sophisticated electronic components, can be significantly more expensive to repair than older vehicles. A rear-end collision that might have resulted in a $4,000 repair on a 2018 truck could cost $12,000 to repair on a comparable 2024 model because of the sensors, cameras, and bumper-integrated electronics that may need to be replaced and recalibrated. When repair costs approach or exceed a vehicle’s actual cash value, the insurer may declare it a total loss. The resulting ACV settlement may be significantly less than the cost of replacing the vehicle in the current used vehicle market.

Contractors who carry commercial auto coverage on actual cash value terms for older vehicles in their fleet should evaluate whether the ACV of those vehicles, given current market conditions, adequately reflects replacement cost. The gap between ACV and replacement cost on a truck that is five or more years old can be substantial, and that gap falls entirely on the fleet operator in a total loss scenario.

6. Check Hired and Non-Owned Auto Exposure

Employees may use their own cars to drive to job sites, pick up materials or make other work-related trips. Contractors may also rent vehicles when a project requires them. If a crash occurs during one of those trips, the business could face a liability claim even though it does not own the vehicle.

Hired and non-owned auto (HNOA) coverage is designed to address certain liability claims arising from the business use of rented vehicles or vehicles the business does not own. Coverage depends on the policy’s terms and how the vehicle is being used, so contractors should review these exposures alongside their commercial auto coverage. HNOA generally does not pay to repair an employee’s personal vehicle.

Tooher-Ferraris helps construction companies review commercial auto coverage, assess fleet safety practices and prepare renewal submissions that document their approach to managing risk. Learn more about our commercial insurance services and Risk Synergy® Portal.

Ready to review your commercial auto program before renewal? Contact Tooher-Ferraris to discuss your coverage and vehicle use.

Frequently Asked Questions

Why is commercial auto the most expensive line in a contractor’s insurance program?

Commercial auto has reported underwriting losses for fourteen consecutive years as claim severity has increased faster than premium levels. The primary cost pressures, including rising vehicle repair costs, medical inflation, and exposure to large jury verdicts in commercial auto cases, have not eased. In response, carriers have increased rates, tightened underwriting standards, and reduced capacity for fleet accounts with unfavorable loss experience.

What do commercial auto underwriters evaluate for contractor fleet accounts in 2026?

Underwriters evaluate loss history, driver qualification standards, MVR monitoring frequency and process, telematics adoption and behavioral data, vehicle maintenance records, and the written safety policies governing driver behavior. Accounts that can document disciplined risk management across all of these categories receive materially better terms than those with clean loss histories but no supporting documentation.

What is hired and non-owned auto coverage and do contractors need it?

Hired and non-owned auto coverage provides liability protection when a contractor’s employees use personal vehicles for business purposes or when the company rents vehicles it does not own. It fills the gap that a standard commercial auto policy leaves for non-fleet vehicles used in connection with the business. Most contractors have some exposure to this risk, and HNOA coverage is typically inexpensive relative to the liability it addresses.

Business Insurance

September 1, 2026

The Commercial Insurance Market Is Splitting in Two. Here Is What That Means for Your Renewal.

The 2026 commercial insurance market is the most bifurcated in recent memory, and most business owners are reading it wrong. Property rates are declining as carrier capacity has returned to the market following several years of catastrophe-driven increases. Cyber pricing is softening as competition among carriers intensifies and loss experience has remained more favorable than underwriters anticipated. Directors and officers liability has stabilized after years of market volatility.

At the same time, general liability, commercial auto, and umbrella and excess coverage are telling a very different story. Loss trends of 12 to 15% are persisting in general liability, driven by social inflation and nuclear verdict exposure. Commercial auto has posted underwriting losses for fourteen consecutive years and continues to harden for fleet accounts. Umbrella and excess capacity has quietly shrunk as reinsurers have restricted their exposure to the casualty lines most affected by social inflation. A business that looks at its total renewal number and concludes the market is softening may be missing significant increases in the casualty lines that matter most.

Where Rates Are Declining and Why

Commercial property has seen meaningful rate decreases in 2026 as carrier capacity returned to the market following the 2023 and 2024 catastrophe seasons. Reinsurance pricing stabilized, allowing primary carriers to compete more aggressively for well-managed commercial property accounts. Businesses with demonstrable property risk management, including updated roofing, upgraded electrical systems, and documented building maintenance programs, are seeing some of the most favorable property renewals they have had in four years.

Cyber insurance has shifted dramatically from the rate environment of 2021 and 2022. Competition among cyber carriers has intensified, and for businesses that can demonstrate strong security controls, pricing has declined meaningfully from peak levels. According to recent market analysis, businesses that implement the five core security controls now required as baseline underwriting standards have seen premiums stabilize or fall 50 to 60% compared to businesses without those controls. The catch: businesses that cannot demonstrate those controls are facing flat denials or premium increases that can exceed 300%.

Directors and officers liability has hit a floor after years of market correction. Primary coverage for private companies is seeing flat renewals in most segments, and for private company D&O accounts with clean governance histories, pricing is no longer moving in the wrong direction.

Where Rates Are Still Rising and Why

General liability is under sustained upward pressure, and this is not a short-term phenomenon. Nuclear verdict exposure, driven by the same social inflation dynamics affecting commercial auto losses, is now influencing general liability pricing. Underwriters are accounting for the growing likelihood of large plaintiff verdicts on claims that might have settled for lower amounts five years ago. Accounts with retail, hospitality, or manufacturing operations, where third-party bodily injury exposure is highest, are seeing the most significant GL increases.

Commercial auto remains the most structurally challenged line in property and casualty insurance. The line has generated underwriting losses in 14 consecutive years, and the forces driving those losses, including claim severity, nuclear verdicts, and vehicle repair costs, are not easing. Fleet accounts that have not invested in telematics, documented driver monitoring programs, and safety training are being penalized at renewal. Those that have built this documentation are receiving more favorable treatment, although favorable is a relative term in a market with sustained double-digit severity trends.

Umbrella and excess capacity has shrunk quietly. Reinsurers have restricted their exposure to the casualty lines most affected by social inflation, and that restriction has flowed through to the primary market. Businesses operating with umbrella limits and attachment points that were set three or more years ago may be carrying programs that no longer reflect current verdict trends. A $5 million umbrella that was adequate for a company’s liability profile in 2021 may be inadequate for the same company’s liability profile today, without any change in the underlying operations.

How to Read Your Commercial Insurance Renewal

The total premium change tells only part of the renewal story. A lower property premium could offset an increase in general liability or umbrella coverage, leaving the overall cost nearly unchanged. Reviewing each line separately helps you understand what changed and whether your coverage still fits your business.

Before accepting a renewal, ask three questions:

Which lines changed, and why? Find out whether an increase reflects your claims history, changes in your operations, property values or broader market conditions.
Do the limits and terms still meet your needs? Review deductibles, exclusions and liability limits alongside your contracts and current exposures. A lower premium may come with a coverage change that deserves closer attention.
What alternatives were considered? Ask whether different deductibles, limits, carriers or coverage structures could better serve your business. Compare the effect on both cost and protection.

Tooher-Ferraris reviews commercial insurance programs across coverage lines to help businesses understand their renewal options. Learn more about our commercial insurance services and specialty programs.

Frequently Asked Questions

Why are property rates declining in 2026 while liability rates are still rising?

Property and casualty lines are driven by different underlying loss dynamics. Commercial property pricing reflects catastrophe loss experience and reinsurance capacity, both of which have improved. Liability lines, particularly general liability and commercial auto, are driven by claim severity trends, social inflation, and nuclear verdict exposure, none of which have improved materially. The result is a market moving in opposite directions simultaneously, which is the defining characteristic of the 2026 renewal environment.

How does social inflation affect commercial liability premiums?

Social inflation refers to the rising cost of insurance claims driven by increased litigation, broader legal interpretations of liability, plaintiff-friendly jury decisions, and third-party litigation funding. It affects general liability, commercial auto, and umbrella pricing because insurers must price in the expectation that claims that historically settled at lower amounts will now produce larger verdicts or settlements. The effect compounds over time as prior-year reserves prove inadequate and carriers adjust their prospective pricing.

What should I ask my broker about my commercial program renewal this year?

Ask for a line-by-line breakdown of what is increasing, what is decreasing, and the stated reason for each movement. Ask whether your limits and structures on liability lines still reflect current verdict trends in your industry. Ask what alternatives were considered before the renewal as presented. A broker who can answer all three questions with specifics, not generalities, is providing the level of analysis the current market requires.

Ready to review your complete commercial insurance program in the context of the current market? The team at Tooher-Ferraris has been helping businesses navigate commercial renewal since 1932. Contact us today to schedule a no-obligation consultation — https://toofer.com/contact-us/

Personal Lines

September 1, 2026

Life Insurance Awareness Month: The Coverage Gap Facing 102 Million Americans

At least 102 million Americans live with a life insurance coverage gap, according to LIMRA and Life Happens. That number has declined modestly over the past several years as pandemic-era awareness has driven more households to buy coverage. The gap remains large. September is Life Insurance Awareness Month, and the most useful thing LIAM can do for individuals is move the conversation from general awareness to specific action, starting with an honest assessment of where their coverage actually stands.

The data on life insurance misconceptions is striking. Seven in ten Americans overestimate the actual cost of life insurance, according to the LIMRA and Life Happens 2024 Insurance Barometer Study. Only a quarter of consumers feel confident in their knowledge of the product. Purchase intent is high. 36% of U.S. adults say they plan to buy coverage this year, yet most do not follow through. The barriers are not necessarily financial. They are informational. People often don’t buy the life insurance they believe they need because they don’t know how much it costs, what type of coverage they need, or how much coverage is appropriate for their situation.

The Gap Between Perceived Need and Actual Coverage

Most underinsured households fall into one of three categories. The first group has no coverage at all: 49% of American adults own no individual life insurance policy, relying either on employer-provided group coverage or on nothing. The second group has insufficient group coverage. Employer-provided life insurance typically offers one to two times annual salary, which rarely reflects a household’s full financial obligations, including mortgage balances, dependent care costs, business debt guarantees, or estate planning needs. The third group has individual coverage they purchased years ago and haven’t reviewed since: a policy sized for a household that existed a decade ago, before income grew, before a business was acquired, before a spouse left the workforce to raise children.

The financial stakes of the gap are concrete. LIMRA research shows that 42% of households would face financial hardship within six months should a wage earner die unexpectedly, and 25% would face hardship within a month. These are not households without assets. They are households without the specific financial tool designed to protect those assets against the timing risk of an unexpected death.

What Life Insurance Awareness Month Should Actually Prompt You to Review

LIAM is most useful as a scheduling trigger, not an awareness exercise. For most households, the review that matters is not “do I have life insurance” but “does my life insurance reflect my current situation.” Three specific circumstances should prompt a coverage review regardless of whether September arrives first.

A change in business ownership or partnership structure is the most common trigger that goes unaddressed. Business owners who have added partners, restructured equity, taken on significant business debt, or changed the valuation of their company since their last coverage review are carrying life insurance designed for a different business. Key-person coverage, buy-sell funding, and loan collateral assignments all require periodic recalibration against current business realities.

A significant increase in net worth can create estate planning complexity that life insurance can help address. An irrevocable life insurance trust can provide estate liquidity without the policy proceeds becoming part of the taxable estate. This strategy can become more valuable as the estate grows.

A change in dependent status, such as the birth of a child, aging parents becoming financially dependent, or a spouse transitioning out of the workforce, can materially change the income replacement calculation. Policies that were sized before these transitions may no longer provide appropriate coverage for the household.

Is Life Insurance More Affordable Than You Think?

Cost is a common concern when considering life insurance, but many people have never requested a quote. Term life insurance may be more affordable than expected, particularly for applicants who are younger and in good health. The premium for any policy depends on factors such as age, health, coverage amount and term length, so an individual quote is the best starting point.

For business owners and families with more complex needs, price is only one part of the decision. Coverage may need to account for income replacement, business obligations, estate planning goals or an ownership transition. Permanent life insurance and other planning arrangements can be useful in some circumstances, but their costs, features and tax implications require careful review with the appropriate advisors.

Tooher-Ferraris helps individuals, families and business owners evaluate coverage in the context of their broader goals. Explore our life insurance services and Private Client Group to learn more.

Frequently Asked Questions

What is the life insurance coverage gap?

The life insurance coverage gap refers to the difference between the amount of life insurance Americans have and the amount they need to maintain their households’ financial security in the event of an unexpected death. LIMRA and Life Happens estimate that at least 102 million Americans live with this gap, meaning their coverage is either insufficient or nonexistent relative to their actual financial obligations.

How much life insurance does the average person actually need?

A common starting point is 10 to 12 times annual income, but the right figure depends on specific obligations: mortgage balance, dependent care costs, business debt, estate tax exposure, and income replacement duration. Business owners often require coverage significantly above this threshold when key-person exposure, buy-sell funding obligations, and personal guarantees on business debt are factored in.

Why do so many people underestimate what life insurance costs?

According to LIMRA’s research, most people overestimate the cost of life insurance by a factor of three or more. A healthy 35-year-old can purchase substantial term coverage for roughly the cost of a streaming subscription. The perception of high cost is the primary reason people delay purchasing coverage they acknowledge they need and it is the most common misconception LIAM campaigns are designed to correct.

Ready to find out where your life insurance coverage actually stands? The team at Tooher-Ferraris has been helping families and business owners protect their financial security since 1932. Contact us today to schedule a no-obligation consultation — https://toofer.com/contact-us/

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