Construction insurance claims: how much independent expert help costs

Scope of a construction claims engagement

A construction insurance mandate is broader than a single-policy property claim. The adviser maps every potentially responsive policy, including subcontractors' certificates and any wrap-up or owner-controlled programme, and checks the building contract for joint names, waivers of subrogation and insurance obligations.

They then prepare the narrative of cause, allocate the loss between policies, build the quantum with quantity surveyors or forensic accountants, deal with several adjusters and sometimes coverage counsel, negotiate interim payments to protect project cash flow, and manage the file until each insurer has closed its part.

Indicative bands for percentage-based fees

The table below shows an indicative order of magnitude observed on the market for policyholder representatives working on construction losses, not an official or legal scale. It is expressed in US dollars because public adjusters are widely used in the United States and Canada; UK, Irish and Australian advisers often apply comparable bands in their own currency. Large programme claims are frequently priced on time rather than percentage.

As a benchmark from a civil-law market, the French professional reference scale for policyholder experts runs from 9 percent on claims below 25,000 euros down to between 1 and 1.75 percent above two million euros.

Indicative amounts, to be checked with each expert.

Regulated maximums in some US states

Public adjusters in the US must be licensed by each state, and a number of states limit their compensation. Florida and Texas are commonly cited examples of states with percentage caps, with tighter limits in Florida for claims arising from a declared state of emergency. Because these rules are periodically amended, confirm the current position with the relevant state insurance department. Outside the US, percentage caps of this kind are uncommon.

The main billing structures

Construction clients are often sophisticated buyers and can negotiate the structure as well as the rate.

• Contingency on total recovery: a percentage of all amounts paid by every insurer under the engagement.
• Contingency on uplift: a percentage only of the recovery above a written baseline such as the first offer.
• Time and materials: hourly or daily rates by grade, common for construction claims consultancies and forensic accountants; senior rates often range from roughly USD 150 to 400 per hour depending on market and specialism.
• Retainer plus success fee: a monthly retainer to cover ongoing work on long programmes, credited against a reduced contingency.
• Per-policy pricing: different rates for the works claim and the liability or professional indemnity claim, reflecting different effort.

Extras that change the final bill

Ask whether expert witnesses, engineers, scheduling analysts or document review platforms are included or charged at cost. Confirm the treatment of sales tax, VAT or GST, travel to remote sites, and any minimum fee. If proceedings become likely, the engagement should explain how fees for supporting lawyers or attending mediation are handled.

Policy extensions that may offset the cost

Construction and commercial property policies sometimes include a claims preparation costs clause, reimbursing reasonable fees of accountants or other professionals to produce information the insurer requires. It is usually subject to a sub-limit, may exclude public adjusters or contingency fees, and may require the insurer's consent before costs are incurred.

Separately, professional fees cover pays designers and engineers to plan and supervise reinstatement. It reduces the cost of the remedy but generally not the cost of negotiating the claim. Deductibles, which can be substantial on large projects, also eat into what is recovered and therefore into any percentage fee base.

How costs evolve with the size of the loss

A small loss of about USD 40,000, such as theft of installed copper and damage to services, would often attract a public adjuster fee of 10 to 15 percent, or USD 4,000 to 6,000. Many contractors handle such claims through their broker instead.

A medium loss of around USD 1.2 million, for example a crane failure damaging the frame and an adjoining property, may involve the works and liability insurers together. A blended rate of 5 to 7 percent would put the fee near USD 60,000 to 84,000, justified mainly where the adviser resolves disputes between insurers and speeds up interim funding.

A large loss of USD 15 million after a major fire or structural failure usually moves to capped time-based billing or a percentage under 3 percent. Even then the fee runs well into six figures, so detailed monthly reporting on hours and progress becomes essential.

Across all three sizes, the price also moves with the number of insurers involved, the quality of the project's cost records, whether the cause is disputed, and how quickly interim funding is needed to keep the site operating. A file where every insurer accepts liability early is far cheaper to run than one where adjusters spend months debating which policy should respond first.

Selecting an adviser and agreeing terms

Price only makes sense alongside capability. A cheaper adviser who fails to coordinate several insurers can leave money unclaimed between policies.

• Ask for comparable programme-level claims and references from contractors or owners.
• Verify licences where required, professional indemnity cover and absence of conflicts with insurers or other project parties.
• Define which policies and which parties are covered by the engagement.
• Set clear termination terms and what is owed for work done to date.
• Disregard pitches that guarantee a result or a specific multiple of the insurer's offer.

On construction programmes, the most cost-effective fee is one tied to clearly defined policies, a written baseline and transparent reporting. Comparing structures as well as rates usually reveals the better offer.