Most commercial property brokers spend their renewal cycles thinking about coverage forms, sublimits, deductibles, and program structure. Those conversations matter. There is another part of every commercial book, though, that almost never makes it into a renewal review, and on a meaningful share of accounts it does more to drive the loss ratio than anything inside the policy itself.
It is the list of contractors and vendors your insured calls in the first 48 hours after a loss.
Most brokers assume that part of the claim belongs to the carrier and the insured. After a loss, the insured signs a contract, the work gets done or it does not, the carrier pays or disputes, and the broker comes back into the picture only when the claim closes or the renewal hits. That assumption holds in residential lines. It does not hold on commercial books, where the dollars are large enough that the vendor decision made at hour 24 quietly shapes claim severity, indemnity period, retention at renewal, and broker E&O exposure for years afterward.
The number behind the pattern
The National Insurance Crime Bureau estimates that upwards of 10 percent of every catastrophe dollar paid in the United States is lost to post-disaster contractor fraud. Applied to 2023, the most recent year for which NICB has released the figure, that came to roughly $9.3 billion against $93 billion in U.S. catastrophe losses. NICB’s framing is industry-wide rather than commercial-specific, and most of the public messaging is directed at homeowners, but the underlying patterns are exactly the ones commercial brokers have watched play out on their own books.
The names for them are familiar:
Storm chasers, who arrive from out of state within hours of an event and disappear before warranty obligations come due.
Assignment-of-benefits abuse, where a contractor takes control of the claim and the insured loses standing to negotiate scope, pricing, or carrier disputes.
Billing for work not performed, padded scopes, and inflated invoices that drift well past the actual cost to repair.
Abandoned jobs, where a contractor collects an initial payment, performs partial work, and walks, leaving the insured to source a replacement at a premium and the indemnity period stretching with every week of delay.
None of this is theoretical. Every commercial broker who has worked through a CAT season has seen at least one loss where the underlying damage was modest and the claim outcome was not, and the difference is almost always traceable to who showed up onsite first and what they did.
The second-order costs brokers actually carry
Once a bad vendor is in the door, the costs ripple through every metric a broker is measured on:
Claim severity rises, when scope creep, inflated pricing, and unsupported invoices push the indemnity well past what the actual peril warranted.
Indemnity period extends, when work is delayed, abandoned, or has to be redone, dragging the time element exposure on a business interruption claim weeks or months past where it should have closed.
Premium pressure builds at renewal, when the carrier prices the next term off a loss history that was inflated by vendor behavior rather than the underlying event.
Retention erodes, when the insured experiences the recovery as chaotic and starts shopping the account.
E&O exposure surfaces, when an insured later argues that they relied on the broker’s referral, the broker’s silence, or the absence of a pre-positioned alternative.
The point is that post-loss vendor selection is not a downstream issue. It is upstream of almost every metric the broker actually owns.
Why post-loss vendor selection is broken at scale
The structural problem is that insureds are asked to make their most consequential recovery decision at the worst possible moment. The roof is open, operations are down, the phones are ringing, and a contractor is in the parking lot with a contract on a clipboard. There is no time for license verification, insurance certificates, performance history, billing transparency review, or a real conversation about scope.
That decision then sets the tone for everything downstream. Whoever is selected on day one usually controls the scope, the pricing assumptions, and the pace of the recovery. By the time the carrier’s adjuster, the broker’s claims advocate, or anyone with claims experience gets involved, the operative facts of the claim are already established.
Most insureds do not have a vetted list of commercial recovery vendors sitting in a binder, ready to call. Most brokers do not have one to offer. So the default outcome on most commercial losses is exactly the outcome that drives the loss ratio: an unvetted vendor, selected under pressure, controlling a claim that the broker and carrier will manage downstream.
The pre-positioned answer
The fix is not for brokers to start vetting contractors themselves, and it is not to take on vendor selection liability. The fix is to put a vetted, managed vendor program in front of the insured before a loss happens, so that the day-one decision becomes a phone call rather than a clipboard.
That is what DRS built the Managed Vendor Partner (MVP) Program to do. When an insured calls DRS after a loss, they reach a single point of contact who coordinates pre-vetted partners across mitigation, restoration, construction, roofing, salvage, contents, and equipment. Every MVP partner has been vetted on licensing, insurance, performance history, geographic depth, surge capacity, and billing transparency. Scope and pricing are agreed with the carrier’s adjustment team before work begins, which is the single change that does the most to prevent the disputes that drive claim severity and extend the indemnity period.
There is no cost to the broker, the insured, or the carrier for DRS’s coordination of the physical recovery. MVP partners fund the program, and all pricing runs through the standard insurance adjustment process, so scope and cost are independently validated.
On a real loss, that combination changes the outcome materially. After a steam pipe burst on the 23rd floor of a 650-room New York hotel, with damage across more than 400 rooms heading into UN General Assembly week, New York Fashion Week, and the holiday season, the initial insurer estimate pointed to a $25M+ combined loss and a 90-day restoration timeline. With DRS coordinating, an MVP partner was onsite in under 24 hours, the entire hotel was dried out and turned back over to the operator in 30 days, and the combined loss came in at roughly $13M. That is a $12M reduction in indemnity and 60 days of indemnity period eliminated, on a single loss, without a dispute between the adjustment team and the vendor.
On a separate manufacturing loss with a projected $150M business interruption exposure, MVP coordination produced temporary roof repairs in 22 days, permanent repairs in under a year, and a final BI loss limited to the equivalent of 10 days of lost production. The insurer’s projected $150M BI exposure resolved at roughly $30M.
Those outcomes are not the result of better contractors in some abstract sense. They are the result of the same caliber of vendors that should have shown up anyway, working inside a coordinated process where scope and pricing are agreed before the saws come on, and where someone with claims experience is sitting between the vendor, the adjuster, and the insured from day one.
What this means for brokers at renewal
If a commercial broker has a book with meaningful property exposure and no pre-positioned vendor program their insureds can call before they call a contractor, every account on that book is carrying an exposure that does not appear on any spec sheet. It shows up later, in inflated severity on the next loss, in a longer indemnity period than the peril warranted, in a renewal priced off that loss history, and in the difficult conversation that follows when an insured asks why nobody mentioned this before the storm.
Walking that program in during the renewal review is one of the few moves a broker can make that costs the insured nothing, costs the broker nothing, and materially changes how the next claim plays out. It is also the kind of value-add that holds an account in place when the inevitable difficult market cycle hits. By the time the exposure shows up at renewal, it is already priced in.
If you want to see how the MVP Program would fit on a specific account or across a book, that is a 30-minute conversation. The program is built so that it is in place before the next loss, not assembled after one.
Sources: National Insurance Crime Bureau, “Contractor Fraud Costs Americans Billions Every Year,” May 15, 2024. Loss-year figures cited are from 2023 (the most recent year for which NICB has published the estimate as of this writing). NICB’s methodology is industry-wide, including residential and commercial losses.
DRS, a division of Specialty Program Group, provides commercial disaster recovery, claims preparation, and forensic accounting services for commercial property and public entity clients nationwide. The Managed Vendor Partner Program coordinates pre-vetted physical recovery partners across mitigation, restoration, construction, roofing, salvage, contents, and equipment, with no cost to the broker, insured, or carrier for DRS’s involvement.