Construction

The construction industry is characterised by multiple risk variables that impact safety, timing, completion, and profitability. Marsh’s globally-aligned team of construction industry specialists can work with you to create tailored risk and insurance solutions.

Construction is an essential industry for the global economy and activity in the sector is constant.

There will always be a need for the renewal of existing and the creation of new infrastructure. But as the build cycle is often driven by socio-economic factors, it can be quite volatile. Construction companies need to have an acute awareness of current and emerging risk issues and be able to respond quickly to changing circumstances.

Digitalisation, climate risks, rising construction costs, and supply chain chokepoints are some of the current challenges shaping construction companies’ risk profiles. Understanding their impact allows for the design of a considered risk management framework that balances an organisation’s retention, management, and transfer needs.

Marsh's globally integrated team of more than 1,000 construction industry specialists helps clients deliver construction projects in all regions of the world. For more than 30 years, we have supported businesses by assessing their risks, minimising uncertainty, and embracing safety as a business enabler.

We can work alongside you to craft construction risk and insurance strategies unique to the pressures you face. We can help you design and implement programs that align to your strategic objectives, optimise your capital, and protect your business now and into the future.

For more information and analysis on construction industry risks, visit our insights section.

Unique facilities.

Marsh offers a range of proprietary insurance solutions tailored to address your specific risks. One such solution is Fast Track, an innovative facility that offers pre-arranged capacity from Lloyd’s of London insurers across all relevant lines of insurance for placements worldwide. Whatever risks our clients face, we can provide Marsh solutions.

Multi-class solutions.

We provide unified services, delivering solutions through our dedicated practice for all the standard construction insurance classes, as well as ancillary and associated classes, including marine, motor, office and contents, and pension trust liability. You can have a single Marsh point of contact for all your insurance needs.

Enhanced claims solutions.

Our claims team, consisting of more than 100 claims handlers, includes former insurers and loss adjustors. Our skilled claims specialists work with clients at every step, applying a proven claims management and resolution methodology to help you recover your full entitlement.

Risk consulting and advisory capabilities.

This includes engineering and enterprise risk management, probable maximum loss (PML) studies, risk finance optimization (RFO), claims management, and loss control solutions. We are committed to helping you understand and manage your business risks effectively.

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Marsh Specialty Construction Practice

FAQs

Construction industry risks generally fall into the following categories:

Physical damage: extreme weather events, fire, explosions, vandalism, and theft.
Third party risks: injury and third party property damage, environmental impact.
Design: errors, delays, sudden change requests from stakeholders.
External factors: regulations, tax laws, macroeconomic variables, negative public opinion.
Compliance: lapsed permits, improperly filed or incomplete documents sent to local authorities.
Project management and organisational matters: workforce inexperience, supply chain problems, safety hazards, scheduling conflicts, delays, cost overruns.
Contractual obligations: failure to reach expected quality level, use of improper materials.

The identification, allocation, and management of risk should start from initial project conception with an analysis of the competing factors that determine the commercial viability of the project. Typically, risk allocation takes place between the project stakeholders based on who is best placed to bear and manage a particular risk. Potential size, financial impact, and frequency of losses will play a part in prioritisation. Those risks that cannot be managed will be factored into the final terms of any contract.

Demonstrating robust project risk identification and management requires a high degree of analysis and planning with all project stakeholders aware and engaged in the process. Clearly documented procedures, safety protocols, and risk registers are typically used to capture and detail how the risk will be managed.

Working with Marsh's risk management specialists can help you find the right insurance and risk mitigation protective methods for your project risk.

Although you may already have comprehensive policies for your various property and liability concerns, typically these do not apply in the case of pending construction projects, no matter the design and/or construction stage. Whatever your financial interest is in a construction project, whether as an individual investor or on behalf of your organisation, you will need at least some level of construction insurance (also known as builder's risk insurance) coverage.

Insurance protection is required for injury and physical damage risks and will ordinarily be a requirement of the underlying construction contract.

Beyond these risks, financial stakeholders may require financial loss protection in the event that indemnifiable loss events give rise to extensive project delays. This coverage is designed to protect against the loss of anticipated revenues from projects that are delayed from moving into an operational phase, or the costs of servicing debt taken out against the construction, which would otherwise be serviced by operating revenues.

A range of other insurance coverages may also provide protection from risks associated with transit, pollution, design, and a host of other identified project activities.

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Construction

Construction is an essential industry for the global economy and activity in the sector is constant.