GENERAL LIABILITY ROUND-UP Beverly Hill, Balfour Beatty Construction Janet Kerr, Boston Properties David DeLaRue, Willis Construction September 16, 2014

Locating the herd? General Liability Round-up | 1 OCIP introduced to construction Owners begin looking at using CIPs for Residential Risk 1998 Standard market begins restricting coverage for home builders Excess & Surplus Lines senses an opportunity and begins writing Residential GL Only CIPs Contractors begin using WC/GL CIPs Workers compensation rates begin to soften putting pressure on WC/GL CIPs Residential GL only Expands as construction explodes Residential Market Slows. E&S looks to commercial market 2010 Contractor CIPs gain momentum and owners see more CCIP offerings Contractors hate the CIP and anyone who supports them. Rolling GL Only CIPs appear and contractors are using CCIPs more on projects of all sizes. GL Only on commercial projects becomes more competitive 2012 to Present Owners begin to consider GL Only CIPs on larger commercial projects. Conventional Owner CIP 1940 to Present Contractor CIP 1998 to Present

Diverging & Converging Interests General Liability Round-up | 2 Cost management Claim Defense Improved Coverage Successful Project General Contractor Contractor Risk – Contractor Coverage Practice Policy Integration Subcontractor Exposure Owner relationship Owner CIP limitations Coverage Condo Conversion Owner Contingent or vicarious liability (Named insured?) Lender requirements General contractor relationship CCIP Transparency Coverage

WC/GL vs. GL Only – Decision Drivers General Liability Round-up | 3 WC/GL CIPGL Only CIP Admitted Carriers Deductible Minimum Retention usually begins at $250K Collateral requirements Better control over workers’ compensation (WC) claims. Reduces exposure for WC subrogation Carrier safety resources Standard ISO forms with wrap-up modifications Reliance on broker administrator – Carriers will consider broker experience in underwriting Limited appetite for residential risk Project size limitations Multiple ownership interests complicates the placement Excess & Surplus (E&S) Lines Deductible or Self-Insured Retention* Low retention - $25K No collateral requirements No control of workers’ compensation claims except through agreement WC subrogation exposure No safety services Coverage form flexibility Can mandate use of third party program administration in addition to broker Market is open to residential risk Greater flexibility on project size Good solution for JVs or multiple ownership interests

GL Only Market Summary General Liability Round-up | 4

GL Market Summary General Liability Round-Up | 5

Industry Trend to GL Only? Workers compensation rates continue to pressure WC/GL OCIP financials Retail underwriters have limited interest but that may change Continued erosion of contractual protections will drive many to project insurance Continued erosion of subcontractor Lenders are becoming more aware and drive projects into a CIP Project delivery methods will rely on more CIP solutions (IPD & P3) Owners will continue to explore GL only Contractors continue to rely heavily on WC/GL CIP but use GL only on select projects General Liability Round-up | 6

Recent GL Only Project Examples General Liability Round-up | 7 Cameron LNG Plant - $5Bn LNG Project in LouisianaDeKalb County – Rolling OCIP Minnesota Vikings - $750M Stadium ProjectMGM National Harbor Hotel & Casino - $800M Hotel Casino

Questions & Answers General Liability Round-up | 8