Insights

Winds of Change in Construction Professional Liability


The sky isn’t falling in the construction professional liability market, but the winds are starting to change.

Over the last few years as the market began to harden overall, the construction professional liability market seemed relatively immune to changing conditions. The abundance of carriers in the space, including newer entrants, provided additional capacity and increased competition, cushioning the space from the overall market contractions.

However, recent signs indicate that change is afoot.

The Upside

For the most part, the construction professional space has been largely isolated from other market issues in a way that most lines of business have not. For example, cyber losses do not tend to impact the construction professional liability market in the same way that they impact other types of professional liability. As a result, thus far, cyber is not driving much of what is happening within the construction professional liability space.

Another piece of good news: other types of catastrophic losses also tend to occur outside of the realm of professional liability coverage. While catastrophic losses do have market-wide impacts, that fact that most such events would be covered under other policy forms helps to cushion the construction professional liability market from large impacts.

The Market Going Forward

Make no mistake — changes are coming. While the construction professional liability market is still a healthy market with plenty of available products and carriers, there are conditions impacting the market that could create further contraction by carriers. While current losses largely are driven by large losses on heavy civil projects, carriers are responding to those losses to protect their overall book of construction professional liability business. However, even with these changes, insureds are still able to put together adequate coverage programs. What happens in the future will be influenced by loss history, contract requirements, and how carriers are re-evaluating their commitment in the market.

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