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Special trade contractors Market niche represents more than $21.6 billion in premium
There are nearly 2 million special trade contractors in the United States, employing more than 5.6 million people, according to data compiled by MarketStance, Middletown, Connecticut. These businesses represented nearly $21.6 billion in commercial lines premiums in 2004, with 44.3% of that coming from workers compensation coverage, followed by general liability (29.0%) and commercial auto (24.1%). Commercial property and inland marine make up the balance. The vast majority of these businesses are small in size, with 99.3% being either non-employer entities (76.8%) or firms with fewer than 50 employees (22.5%). There are only 12,549 middle market accounts (50-999 employees), but they employ almost 1.5 million people and represent $7.2 billion in commercial lines premium. The 49 national accounts (over 1,000 employees) employ 76,852 people and represent $185 million in premium. Contractors specializing in plumbing, heating and air-conditioning represent the largest niche based on total sales among the 21 different special trade areas, followed by contractors engaged in electrical work and those doing concrete work (except stucco). There are six niches that provide more than $1.5 billion in premium, with more hazardous specialties moving up on the list. Plumbing, heating and air-conditioning contractors lead the pack with $3.46 billion in premium, followed by concrete work, except stucco ($2.92 billion); electrical work ($2.41 billion); roofing, siding and sheet metal work ($2.26 billion); plastering, drywall, acoustical and insulation work ($1.75 billion); and excavation work ($1.54 billion). The workers comp premium clearly is the most important factor and reflects the hazard inherent in the particular specialty. This can be seen by the fact that the average workers comp premium per employee for all special trade contractors is $1,706. However, for roofers, it is more than double that figure at $3,523 and for concrete workers, it is $3,117. Premium per employee for plumbing, heating and air-conditioning contractors is below the average at $1,323. Anyone who did not understand why workers compensation reform was the leading political agenda in California when Governor Schwarzenegger took office only needs to look at the figures for special trade contractors in the state where the average workers comp premium per employee is an astounding $4,519. The workers comp premium in California for this niche market represents 31.7% of the total United States workers comp premium for the niche. In contrast, employees of special trade contractors in California represent only 12.0% of the total employees for this niche in the United States. *   For more information: |
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