The U.S. construction industry is fueling economic advancement. Contractors and a new generation of actively involved owners are driving bold innovations in project design, materials, technologies and techniques as they build the future of the industry.

As a dedicated construction insurance provider, Zurich is aware of the challenges and trends affecting the industry. Our mission is to steer construction innovation by sharing data-based knowledge and offer specialized coverage and claims services for the construction industry; including two leading causes of catastrophic human losses – falls from heights and auto accidents. On the property side, the top causes of severity continue to be fire, wind/hail and water – the impacts of all of which are being amplified by macro-trends such as climate change. Understanding the intersection of macro-trends with the granular, day-to-day causes of loss helps better identify where to invest resources to deliver maximum impact on loss reduction and sustainability.

In this publication of Zurich Construction Insights, we explore trends that contractors, project owners and the industry should focus on to help drive safety, quality and improvements.

One trend that shows no signs of slowing is the dramatic expansion of megaprojects, categorized as those exceeding $1 billion. While any list of current megaprojects is likely to be heavily weighted toward big infrastructure initiatives, such as highways, mass transit and airport renovations, construction of new data centers is making headlines across the country.

Although there are opportunities presented by data centers and other megaprojects, the industry is experiencing the combined stresses of a shortage of skilled workers, rising material costs and concern over the potential long-term effects of an evolving tariff environment. Workers, too, are feeling the strain of the increasing tempo of megaprojects, underscoring the need for employers to be aware of employee mental health and to provide services to workers to support their wellbeing.

Another trend we address is the ongoing challenge of severe losses in jurisdictions where the legal system is especially impactful to the construction industry and the national trend of an increasingly aggressive plaintiffs’ bar. However, contractors can take steps to build defenses against legal system abuse by continuing to focus on a safety culture supported by technologies and deeply engrained cultural practices.

The dramatic growth in high-value megaprojects is also heightening builders risk exposures posed by severe weather events. The impacts of weather extremes are driving more frequent billion-dollar-plus property losses. It’s a trend highlighting the need for professional risk engineering support to help blunt the worst shocks of severe weather events, and to provide greater assurance of sustainability in a changing environment. Our data shows that risks for megaprojects are not unique, but rather amplified, with fires, wind and water losses causing additional disruption especially in sensitive data center and micro chip manufacturing facilities.

The industry is exploring new frontiers in sustainable energy, including the development of wind, solar and geothermal. We are working with insureds who are engaged in the creation of more efficient, cleaner iterations of traditional energy sources. We are beginning the process of supporting utility clients and technology companies as they explore the development and potential utilization of new nuclear power sources, including small modular nuclear reactors (SMRs) that could help power the energy demands of tomorrow’s data centers. We support the construction industry’s exploration of the value, utility and design possibilities of new, sustainable building materials, such as the green revolution in mass timber construction that will help reduce the industry’s carbon footprint.

We look forward to further opportunities to engage in conversations about topics important to your business. Please reach out to your broker to arrange a discussion on sharing additional insights and how to best help protect your business from the risks it may face.

Best regards,