Trends shaping construction casualty in 2026

As we enter a new business year, general liability rates in the construction segment are likely to increase in parallel with construction industry cost trends.

Both material costs and payrolls (driven by wage inflation due to the need to recruit and retain skilled workers) are expected to increase in the single-digit range. Zurich data indicates construction costs overall are up 3%, while wages are up 4% on a national basis.

Workers’ compensation rates are expected to remain flat as insurers and customers have successfully reduced claim frequency through expanded safety and loss prevention efforts. Workers’ compensation as a product line has performed well over the past several years. The recent National Council on Compensation Insurance (NCCI) 2025 State of the Line report noted a Calendar Year 2024 workers’ compensation industry combined ratio of 86%, while lost-time claim frequency declined by 5%.1

Auto liability remains challenging

Increasing severity in auto liability claims remains a significant challenge, with auto accidents driving construction worker fatalities via employees driving company vehicles and accidents affecting workers at construction sites. Data suggests that greater severity of some auto accidents may be due to the weight of batteries in heavier electric vehicles.2

Increased use of video-based telematics and driver coaching could help to reduce auto liability risks and improve accident data capture. With many vendors available in the market today, telematics is a smart choice to control losses within auto portfolios.

Responding to lawsuit abuse

Regulatory and legislative issues will be key concerns to the construction industry in the year ahead. Among these is the growing industry focus on the issue of third-party litigation funding (TPLF). Under this practice, individuals aligned with a law firm pressing a litigant’s case will invest capital to help fund expenses associated with discovery, hiring expert witnesses and other tactics intended to increase the chances of a successful verdict. If the case is successful, the investors will then share a percentage of the judgement. In addition to the costs to defendants and their insurers, TPLF is often blamed for the social costs of court delays and overburdened dockets. Both construction firms and their insurance providers are pressing legislators to demand greater transparency from litigation funding partnerships, making the presence of such funding arrangements admissible in court filings.

Zurich’s own Legislative Affairs team is taking a state-by-state approach to focus more attention on how litigation funding is driving burdensome costs and delays impacting the legal system. Tort reform in general will continue to be a major challenge for the construction sector and a key focus of the insurance industry.

Addressing mental health challenges

As labor shortages continue to challenge construction, the mental health and well-being of workers is becoming a significant area of focus. The combination of high-hazard work environments, long hours, family separation, and other stressors make workers particularly vulnerable to mental health challenges.

Nearly half of construction workers report symptoms of anxiety and depression, but fewer than 5% seek professional help, compared to 22% of the general U.S. population.

Statistically, construction workers are known to have higher suicide rates than workers in other fields. By one estimate, about 5,000 construction workers die by suicide annually. Additionally, the construction industry continues to see high rates of drug use, contributing to the highest overdose deaths by occupation, according to the Center for Disease Control. Nearly half of construction workers report symptoms of anxiety and depression, but fewer than 5% seek professional help, compared to 22% of the general U.S. population.3

An expanding focus on workplace mental health by various state governments is also likely to impact businesses in all segments, including construction, as some states take steps to expand workers’ compensation compensability associated with trauma and PTSD. During 2024, NCCI tracked 64 different state bills related to mental health compensability under workers’ compensation programs.4

Voices within the construction industry are encouraging contractors to take more responsibility for interventions which can reduce the toll of mental health challenges on the lives and families of construction workers. Some brokers have joined in the mission to address this key industry issue, providing data and recommendations construction businesses can incorporate into their own human resource planning.

According to the Associated General Contractors of America (AGC), breaking the stigma over seeking help for mental health issues, encouraging workers dealing with stress and trauma to seek help, and training supervisors to more effectively recognize when intervention may be needed should all be part of normalizing conversations about mental health in the construction industry.5

Conclusion

Overall, the good news is that safety technology adopted by contractors, combined with jobsite safety coaching and inspection by experienced risk engineering professionals, has led to material reductions in worker injuries and project risks. Technological innovations being adopted by the construction industry are proving to be effective loss control tools. Video monitoring of construction sites may not only help prevent workplace accidents but can also be used to train workers to avoid risky behaviors in favor of safe practices. Safety may also be enhanced with the application of virtual reality training, perhaps augmented by artificial intelligence, allowing workers to become familiar with potentially dangerous tasks without the physical risks of learning something new at the jobsite. These and other investments in safety improvements through the application of new technologies are always encouraged for the safety of workers and for successful project completion.

References:

  1. Glenn, Donna, FCAS, MAAA, Chief Actuary. “AIS 2025 Highlights Report – State of the Line Report.” National Council on Compensation Insurance (NCCI). 14 May 2025.
  2. Arbelaez, Raul. “As heavy EVs proliferate, their weight may be a drag on safety.” Insurance Institute for Highway Safety (IIHS). 9 March 2023
  3. Raffetto, Caroline. “Construction’s Mental Health Crisis: Suicide Rates and Solutions.” Construction Owners Club. 20 January 2025.
  4. Araullo, Kenneth. “NCCI reports on workers’ comp reforms and trends in 2024.” Insurance Business. 9 September 2024.
  5. Raffetto, Caroline. “Construction’s Mental Health Crisis: Suicide Rates and Solutions.” Construction Owners Club. 20 January 2025.

The information in this publication was compiled from sources believed to be reliable for informational purposes only. All sample policies and procedures herein should serve as a guideline, which you can use to create your own policies and procedures. We trust that you will customize these samples to reflect your own operations and believe that these samples may serve as a helpful platform for this endeavor. Any and all information contained herein is not intended to constitute advice (particularly not legal advice). Accordingly, persons requiring advice should consult independent advisors when developing programs and policies. We do not guarantee the accuracy of this information or any results and further assume no liability in connection with this publication and sample policies and procedures, including any information, methods or safety suggestions contained herein. We undertake no obligation to publicly update or revise any of this information, whether to reflect new information, future developments, events or circumstances or otherwise. Moreover, Zurich reminds you that this cannot be assumed to contain every acceptable safety and compliance procedure or that additional procedures might not be appropriate under the circumstances. The subject matter of this publication is not tied to any specific insurance product nor will adopting these policies and procedures ensure coverage under any insurance policy. Insurance coverages underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Certain coverages not available in all states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers. Risk engineering services are provided by The Zurich Services Corporation.