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Construction industry struggling to keep up with demand

Look around Florida and you will see the evidence of a construction boom in a variety of forms. One of the easiest ways to spot it, of course, is in the presence of heavy machinery and workers. Sarasota is a great example of a city being transformed by ongoing construction projects, a number of which will add retail, office space, restaurants and condominiums to the city.

A recent article in an insurance publication pointed out that one of the most visible signs of a U.S. building boom is in the number of construction cranes you can see dotting skylines across the nation. More than 450 cranes are currently in operation across the nation. While that’s great news for the industry, it does also have a downside: construction firms are being pushed to their limits by the surge in demand for their services. Many contractors feel pressure to hire unskilled labor to fill open jobs, which unfortunately makes the likelihood of construction defects rise.

Construction insurers are also feeling the crunch. Because there are so many projects ongoing across the U.S., insurance capacity is being stretched as well. According to the article in PropertyCasualty360, insurers struggling to meet demand are raising rates and restricting coverage.

Insurers are also seeing a rise in their costs due to litigation. Some of the lawsuits are purely between contractors, suppliers, developers and other parties involved in construction, of course. But because of a rise in construction defects stemming from heightened demand, those companies are also facing lawsuits from condo owner associations, home buyers, business owners and others.

The article notes that settlements are getting bigger, which motivates more contractors, developers and other construction firms to go to trial – where judgments are also growing larger.

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