Contract works insurance premiums declined by approximately 5%, while design and construction professional indemnity insurance saw reductions of about 10%. This softening market is attributed to increased capacity and new entrants since 2024, leading to heightened competition and offering clients more choices. For instance, construction liability insurers have doubled their available primary capacity from $25 million to $50 million in many cases.
Despite the downward pressure on premiums, insurers are maintaining rigorous underwriting standards. Risk engineers are being deployed more frequently to assess complex or high-value projects, ensuring accurate pricing and thorough risk evaluation. Insurers remain particularly cautious with accounts that have deteriorating claims experiences or exposure to natural catastrophes.
Looking ahead, competition is expected to persist through the second half of 2025. Builders and contractors are encouraged to present well-structured data and demonstrate robust risk management practices to optimise insurance terms. This includes focusing on site safety, project timelines, and clear contractual allocations.
In summary, the current market conditions present an opportunity for construction businesses to secure more favourable insurance terms. However, maintaining comprehensive risk management strategies and staying informed about market dynamics remain crucial for long-term success.
