Labor Shortages and Severe Weather Inflate Risks for Public Entities

Labor Shortages and Severe Weather Inflate Risks for Public Entities

The shortage of qualified construction workers and resulting inflation are impacting public entities’ risks, according to an article by Business Insurance. The article cited experts Lauren Tredinnick and Wes Crago discussing the topic at the Public Risk Management Association’s annual conference. 

Tredinnick, president of public entity risk solutions at Munich RE, highlighted that labor shortages are raising costs for repairing property damage from severe weather events. With Colorado State University forecasting an extremely active Atlantic hurricane season and the expansion of “Tornado Alley,” insurers are preparing for increased property damage.

Tredinnick noted that Tornado Alley has shifted east and north, leading to more frequent and severe tornadoes. Catastrophic weather risks, previously confined to coastal areas, have spread, with significant increases in claims from hail and severe thunderstorms. This uptick in global catastrophic events is affecting reinsurance markets and, subsequently, local insurers. Public entities must ensure accurate property appraisals to maintain market-value rates and avoid difficult discussions with insurers post-damage.

Despite challenges, the cyber coverage market has improved due to more insurers entering the field. Crago, a program administrator for Clear Risk Solutions, stressed the importance of defending against cyberattacks through updated software, multifactor authentication, and experiential training for handling such incidents. Public entities are advised to remain vigilant and proactive in both physical property valuation and cyber security measures to mitigate risks effectively.