By: Natalie Johnson
Construction insurance looks straightforward until a claim arrives. Then the gaps that nobody noticed, the limitation nobody explained, the coverage nuance nobody asked about, and the building type that triggered an exclusion nobody flagged become the only things that matter. Treacy Duerfeldt, a wholesale insurance professional with nearly 20 years of experience specializing in construction coverage, has spent his career watching those gaps form in real time. They normally start in the same place: a conversation between a builder and an agent, where both parties walk away assuming the other understands what was just discussed. “Clear communication has to mean two things,” Duerfeldt states. “Mutually understood and formally documented. One without the other is not enough.”
The Language Gap Is Costing Builders Money They Do Not Know They Are Losing
Construction insurance miscommunication does not announce itself. It compounds in the background and detonates at the worst possible moment. When an agent misunderstands what a builder means by direct labor, premiums look reasonable at policy inception and arrive as a brutal audit spike 12 months later. When an agent cannot distinguish horizontal construction from vertical construction, or a condominium from an apartment building, coverage gaps open up that neither party knew existed until a claim surfaces them.
Approximately 30 trades are involved in residential construction. Each carries its own insurance nuances. Whether a subcontracted code includes or excludes materials furnished by the builder versus the subcontractor can materially affect both the scope of coverage and audit premiums. Whether a builder has begun using formal subcontracts, a change in operating practice that most builders would not think to mention and most agents would not know to ask about, can shift the entire premium and coverage picture. “If one person is speaking one language and the other is speaking the language of a different industry,” Duerfeldt notes, “you just assume each other knows what’s going on. That’s not trust. That’s just incompetence waiting for a trigger.”
The Agents Who Cannot Speak Construction Will Not Survive What Is Coming
Generalist agents who handle construction among a dozen other lines are already being outpaced by the tools their clients are starting to use. Builders are beginning to query AI for the right insurance questions, shop coverage independently, and interpret policy language without picking up the phone. Within five years, the agents who cannot out-think a computer in their specialty area will be substituted by one.
The agents who remain irreplaceable will be the ones embedded deeply enough in construction to know things no algorithm has yet surfaced. A smart thermostat, now required in homes to meet energy codes, does not create climate-disruption liability when hacked. It creates liability for robbery because a hacked thermostat reveals occupancy patterns, and that data sells on the dark web to people who want to know exactly when a home is empty. The builder, the heating, ventilation, and air conditioning (HVAC) contractor, and the smart home renovator all sit in the liability frame. Currently, only two insurance companies offer professional liability coverage for that specific scenario. An agent who does not know that cannot identify the gap. An agent who does is indispensable.
Follow Treacy Duerfeldt on LinkedIn for more insights on construction insurance, coverage literacy, and building the agent expertise that holds up when claims arrive.
