Insurance market volatility: What roofing contractors need to know

RCS Influencers Seth and Ashley Pietsch say that strong operations, a culture of safety and disciplined risk management are key to weathering today’s insurance volatility.

Roofing contractors across both the residential and commercial sectors are facing a difficult insurance environment. Premiums are rising, fewer carriers are willing to write roofing accounts and underwriters are scrutinizing every aspect of a company’s operations more closely than ever before.

Several factors are driving this shift. Severe weather losses continue to increase nationwide, especially from hail, wind, hurricanes and wildfires. At the same time, inflation has pushed up the cost of labor, materials and claims. When a roof replacement or liability claim costs significantly more than it did just a few years ago, insurers respond by increasing premiums and limiting their exposure.

For many roofing contractors, this means renewal increases of 10% to 30% are becoming common, even for businesses with clean loss histories. Contractors with prior claims, limited safety documentation or higher-risk operations may see even larger increases – or find that their current carrier is no longer willing to renew coverage. 

The reduction in carrier options is creating additional challenges. Many insurers have tightened underwriting guidelines for roofing contractors, especially in states with storm activity or frequent litigation. Some carriers are reducing the amount of roofing work they will insure, while others are excluding certain types of projects, such as work over specific heights, multi-family roofing or storm restoration operations.

These insurance shifts affect more than just premiums. Higher insurance costs directly reduce profit margins and can make it harder to remain competitive when bidding jobs. In some cases, contractors may also face stricter contract requirements from property owners, lenders or general contractors who want higher liability limits and stronger documentation. 

The good news is that roofing contractors are not powerless. Companies that actively manage risk are often in a stronger position to control costs and maintain access to better insurance options.

Key strategies include:

• Implementing formal safety programs and documenting regular employee training 
• Using written subcontractor agreements and verifying certificates of insurance 
• Maintaining strong fall protection, driver safety and equipment inspection procedures 
• Reporting claims quickly and working to prevent small issues from becoming larger losses 
• Keeping accurate records of payroll, job types and safety performance 
• Partnering with an insurance advisor who specializes in roofing and understands the market 

Roofing remains one of the highest-risk trades in construction, but the contractors who can demonstrate strong operations, a culture of safety and disciplined risk management will be best positioned to weather today’s insurance volatility. In a changing market, the best defense is preparation.