Business Insurance Case study
A hotel development project. A construction exclusion hiding in the policy.
An insurance review helped a hotel owner identify a gap between its construction operations and its liability coverage.
The challenge
A hotel owner and operator was developing a new hotel. Its development company believed it had General Liability coverage for its work as the project’s general contractor.
During a review of the insurance program, Virtus identified a Real Estate Development Activities Exclusion that excluded the ground-up construction operations. The company was carrying out work that it believed its policy covered.
The review
Virtus used Review Policies, an AI-assisted tool, to support the policy deep dive and help identify the gap. The team reviewed the findings against the client’s operations and developed a recommendation for addressing the construction exposure.
The finding changed the question from whether the company had a liability policy to whether that policy covered the work it was actually doing.
The solution
Virtus separated the hotel and construction exposures. The hotel operations were placed with hospitality-focused carriers, while the general contractor operations were placed in a specialized construction liability program designed for ground-up development.
The result
The development company obtained dedicated liability coverage for its construction operations. The revised structure addressed the identified exclusion by placing the hotel operations and construction activities in programs designed for their respective risks.
For a business taking on a new activity, the policy’s exclusions deserve as much attention as the limits on its declarations page. A review of the actual wording can reveal a gap that a coverage summary misses.
Planning a development project or expanding your operations? Talk with our team about reviewing how your insurance aligns with the work ahead.
