Construction constrained: Market dynamics under U.S. infrastructure plan

Potential government spending of $1.2T would be a massive boon for the construction sector but with serious impact on risk and insurance.

By Todd Germano | July 30, 2021 at 06:30 AM

Insurance for the construction sector is already in a tough position. Supply is shrinking, but demand is rising as the economy advances in the late-COVID environment. Insurance capacity for residential homebuilders risk and excess liability are constrained following some large surety losses, and prices are rising in line with almost all other classes of business insurance.

If the current bipartisan White House proposal to spend $1.2 trillion on U.S. infrastructure goes ahead — or even a bill for substantially less — the dynamics of the market will have to change dramatically if we’re to get all these projects covered.

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