Call Toll Free +1 855-856-TIPS
Construction Insurance Markets
Amongst the sudden globalized spread of COVID-19, it seemed almost inevitable that every market, business, and institution in the United States would suffer its destructive impacts. Local government lockdowns constituted to wide-spread delays and construction project cessations but for many in the industry, the market was already believed to be on the decline even before the pandemic; the virus just served as the additional cherry on top.
Supply chain disruptions in China which spanned the duration of last year, brewed the greatest economic storm in the industry. With the addition of COVID, the postponed process of obtaining equipment and labor overseas and across borders are guaranteed to heavily slow the development and progression of projects.
But insurance coverage for construction proposals were already disorderly previous to the mask-wearing and quarantine days. Social inflation, nuclear judgments, and third party litigation challenged the insurance market. As a result, analysts predict the upcoming 2021 year will manifest an unfortunate future for the construction insurance market. Builder’s risk and general liability markets are anticipated to see amplified pricing rates causing architects and engineers to result in lower coverage limits.
America’s economic and medical uncertainties are regrettably likely to elevate construction costs in the foreseeable future. With regulations amended to ensure health and safety, it is estimated that workforce productivity throughout the United States will drop between 10-20%, simultaneously increasing building costs by a similar amount. There are some optimistic predictions however. The construction industry may take on alternative building methods, could shift towards remote workforces, and competition may actually resort to insurance companies lowering their prices. Amidst all the chaos, the construction insurance market will have to play it by ear and see where the future of the American construction industry goes.