Article ID: 1acf39321806581bc01372e9d9cf327e088f91f581ea8e941da7e9ad08f92440
Source ID: primary:theinsurer.com
Published At: -
Extraction Method: bs4_heuristic
Body Text
Shifting dynamics in the builders’ risk and construction casualty marketplace | The Insurer The Insurer from Reuters The Insurer The Insurer TV Cyber Risk Sustainable Program Manager E&S Parametric Data Hub Sign in Subscribe Articles Region London Market Europe US / Americas Bermuda Asia Pacific Topics Broking Casualty Cyber ILS InsurTech and innovation Legacy Legal/ Regulatory Lloyd’s Losses M&A Parametric People Moves Property catastrophe Results Specialty Events & Conferences Events Content Types News Analysis Viewpoint Commentary Interview News Analysis Commentary Viewpoint Interview Events Videos Shifting dynamics in the builders’ risk and construction casualty marketplace Published: Thu 29 Jan 2026 The Insurer news staff had no role in the production of this content. This content is created by the brand marketing unit of The Insurer. Today’s builders’ risk marketplace is shaped by economic headwinds, regional disparities and a historic influx of capacity. Carriers are still exercising discipline, especially in catastrophe-exposed regions and for projects with unique complexities. Increased competition has led to rate softening, especially for desirable risks for quality developers and builders. However, underwriting rigor remains as developers grapple with slower project starts, tighter margins and macroeconomic volatility, particularly in sectors like multifamily and hospitality. Other key factors to consider include: Economic pressures and rate softening: Developers are delaying or shelving projects due to interest rates, inflation, labor shortages in peak areas and higher-than-average material costs. This is especially prevalent among tier two and three developers where “cheap money” began to exit the system in late 2022. Regional recovery gaps: While Florida is seeing improved capacity and structure, states like Louisiana remain challenging due to the litigious market. The West remains cat-constrained, while the Midwest and Northeast are more competitive but still selective. Submission quality and underwriting discipline: Incomplete and inconsistent data continue to slow quoting for cat-exposed accounts. Underwriters remain selective, gravitating toward higher-quality risks and strong documentation. Technology and trends: Tools like water flow detection and artificial intelligence-driven security are influencing underwriting outcomes. Meanwhile, modular construction continues to grow, raising new risk considerations. Coverage evolution: Broader language is emerging in some policies, especially around defect exclusions, but real protection depends on insurer relationships and tailored terms. CASUALTY The construction casualty market remains firm but fragmented. Primary coverage continues to benefit from consistent capacity and manageable pricing pressure. Excess underwriters, on the other hand, are broadly seeking rate increases between 7% and 15% (with spikes above 20% for distressed risks). Clean accounts can still secure favorable terms, but even these are being priced more conservatively. Creative program structures are becoming essential with solutions such as quota shares, bifurcated towers and captive layers employed to help manage costs and ensure adequate coverage. These approaches can improve placement options, increase participation from facultative markets and make it easier to replace capacity when needed. Other key factors to consider include: Regional and class-specific trends: Commercial construction is seeing ample capacity and competitive pricing, especially for clean, well-managed accounts. Project-specific general liability (GL) programs, including GL-only wrap-ups, are also maintaining traction, particularly in the E&S market. Conversely, for-sale residential construction in construction defect states (including Florida, California, Colorado, etc.) and auto-heavy civil construction projects continue to see limited appetite and steep pricing. Fleet exposure, especially in markets like Texas, Georgia and California, is a major concern. Regulatory and litigation impacts: Despite anticipated casualty market improvements resulting from tort reform, Florida markets in the for-sale space are either leaving the state completely or pushing rate to levels not seen since 2005/2006 and driving capacity down. Claims during the actual course of construction have also been higher than expected and completed operations claims are still being aggressively litigated by the plaintiff bar. PROFESSIONAL LINES The professional lines market remains stable and competitive, with increasing capacity from more traditional E&O carriers and MGAs, as well as more traditional environmental markets that are expanding coverage into the contractors’ E&O space. Premiums on accounts with typical risks and no claims issues are flat to down slightly. More challenging risks (e.g., geotech, roads/bridges and residential) may see higher rates. Underwriters in the space are managing capacity on tougher projects and challenging jurisdictions, including New York, Florida and Texas. Difficult classes include condos, New York risks, geotechnical and roads/bridges. Brokers are having to become somewhat creative to get terms in these classes and venues, offering alternative structures to traditional risks (i.e., quota sharing). Other notable changes include: Increase in demand for coverage enhancements and requests for faulty workmanship and rectification coverages: While we are seeing more carriers offer these grants, it is important to note that all policy language is not created equal and should be thoroughly vetted rather than taking a simplified checklist approach so as not to mislead and expose the agency to potential E&O claims. Changes to the definition of professional services: The definition should be scrutinized and compared to the contract as this coverage is often purchased according to contractual requirements. Many times, the definitions do not line up with the duties and obligations that are strictly required under the contract – resulting in coverage gaps for the general contractor and subcontractors alike. FINDING A STRATEGIC PARTNER Developers need a partner that can anticipate shifting marketplace dynamics and structure coverage that stands up to both today’s risks and tomorrow’s opportunities. Working with a wholesale broker that knows the landscape, has the necessary tools and understands market sentiment is key to finding placements that protect your client’s project as well as their long-term investment. Insights provided by: Jett Abramson, EVP, Amwins National Construction Practice Leader Grant Chiles, EVP, Amwins National Construction Practice Leader Scott Jensen, EVP, Amwins National Construction Practice Leader Gary Ricker, EVP, Amwins National Construction Practice Leader Construction Casualty Most read articles US P&C underwriting peaks in 2025, outlook softens for 2026 Marsh beats Q4 earnings consensus, reports 4% underlying growth Howden US CEO says consolidation hollowed out broking, as platform converts hiring push into client wins Gallagher reports 5% organic growth in Q4 Axis sees ‘changing,' not soft, market as casualty, cyber discipline holds into 2026 Marsh: Property drives global commercial insurance rates down 4% in Q4
Metadata (JSON)
{
"score": 16.883333333333333
}