Top 5 trends in the construction insurance market
The construction industry is constantly evolving, and with it, so is the insurance market that supports it. From the way projects are insured to the technologies shaping new builds, insurers must adapt quickly to keep up.
For construction firms, understanding these shifts can feel daunting, but getting to grips with the basics helps you make better decisions for your projects. Below, information provided by Allianz, breaks down the top five trends currently shaping construction insurance.
1. Annual vs. Project-specific policies
Traditionally, many construction companies have relied on annual insurance policies, which cover all the projects they take on over a 12-month period. These are convenient for smaller projects and ongoing work, as they provide broad coverage without needing to arrange separate protection each time.
However, there’s a growing shift towards project-specific policies. These are tailored to a single project, often running from the start of construction through to completion and even into the maintenance period. This approach helps avoid gaps in coverage, which can sometimes occur when relying on annual policies.
For large, complex projects, insurers may even share the risk, with several providers contributing to one policy. This means no single insurer takes on too much exposure, while the project still gets the protection it needs. As projects get bigger and more complex, expect to see more companies turning to this style of coverage.
2. Modern methods of construction (MMC)
The construction sector is embracing modern methods of construction, such as using timber frames, modular units, and other sustainable materials. These methods often reduce build times and can lower environmental impact, but they also bring new risks.
For example, timber structures may have a higher fire risk compared to traditional brick and concrete. Modular builds may raise questions around manufacturing defects, if something goes wrong, is it the builder’s insurance, the factory’s, or the installer’s that should respond?
Because of this, insurers are developing updated risk models to reflect the realities of MMC. They also pay close attention to guarantees and warranties in place from suppliers and manufacturers. For construction firms adopting modern techniques, it’s vital to check how your insurance handles these new exposures.
3. Renewable energy construction
Another major growth area is renewable energy projects. Solar farms, wind turbines, and other green infrastructure are popping up across the UK. Insuring these projects looks similar to insuring traditional construction, with policies covering site works, equipment, and installation risks.
The big challenge here is the rapid pace of technology. Solar panels, battery storage systems, and turbine designs are advancing quickly, and insurers must keep updating their models to keep pace with new materials and machinery. As these projects often involve specialist equipment sourced internationally, insurers also need to consider transport and supply chain risks.
For construction companies, this means renewable energy projects can sometimes require more detailed insurance discussions than traditional builds. But the flip side is clear: firms that can navigate this space are well placed to benefit from the growing demand for green infrastructure.
4. Regulatory compliance
Regulation is another area driving change. Insurers are particularly focused on managing risks related to fire safety and escape of water (leaks and inundation of water within buildings). These issues can be costly, and with stricter building regulations in place, insurers often work closely with trade bodies and committees to help ensure standards are met.
For construction companies, this means that insurers aren’t just checking a box, they’re actively monitoring compliance. Having strong processes for meeting regulations and following best practice advice doesn’t just keep you safe from fines or delays, it can also make your insurance cover more straightforward and cost-effective.
5. Market competition
Construction insurance is more dynamic than ever, with greater choice and innovation available.
In your current operating environment, choosing the right partner will help you make the most of that choice: they streamline decisions, tailor coverage to each project, and connect you with the right people.
With ongoing support policy reviews, renewals, risk guidance, and claims advocacy, a proven partner will help keep things simple and dependable, so protection is there when it matters and your business stays resilient even through a couple of tough losses.
Final thoughts
The construction insurance market is far from static. As projects grow larger, methods modernise, renewable energy expands, regulations tighten, and competition increases, companies need to stay alert. The key takeaway is this: your choice of policy and insurer should match not just your current project but also the risks of the wider industry. Staying informed about these trends helps ensure you’re not caught out when challenges arise.
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This article was adapted from an article by Allianz which can be found here.