There's a palpable sense of optimism among practitioners in theConstruction insurance space who see this current bull marketcontinuing and even growing. The private construction industry, inparticular, has been in an upward trajectory over the past fiveyears — providing a great deal of opportunity to insurers.

“The construction market is booming, with total project valuesapproaching the high-water mark set in 2007 shortly before thefinancial crisis,” says Rob Brewer, vice president of industrysolutions at The Hanover Insurance Group. From an insuranceperspective, he adds, “there is ample capacity to take onwell-managed risk.”

Brewer adds a cautionary note, however. A shortage of skilledlabor and experienced management, combined with the stresses ofworking to meet the shifting needs of the construction economy,will continue to have an impact on losses. Whether it's residentialbuildings, commercial and institutional structures, or improvinginfrastructure, “underwriters need to be aware of the past,watching for signs that their customers may be taking on more workthan they can effectively manage,” he notes.

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