Looking Ahead: Construction Industry Risk Trends

As the construction industry closes out 2025, business leaders face a range of challenges that are unlikely to fade in the year ahead. From economic pressures and evolving regulations to severe weather and rising insurance claim costs, these forces can disrupt projects, inflate budgets, and threaten profitability.

By focusing on loss-control strategies, long-term planning, and scalable support, construction companies can position themselves to reduce risks and strengthen resilience.

Economic Pressures

Inflation has cooled compared to recent peaks, but its impact remains, particularly in the form of elevated material prices and project expenses. Ongoing labor shortages and supply chain strains continue to compound the issue, driving up costs and extending project timelines.

Loss control strategies to consider:

• Maintain steady cash flow with sound financial planning.
• Strengthen vendor relationships and vet sourcing channels.
• Adjust operations where needed to preserve stability.
• Focus on recruiting and retention to ease workforce shortages.

Regulatory and Legal Challenges

Building safety failures and structural disasters in recent years have prompted sweeping changes to regulations. Compliance varies across jurisdictions. Companies that fail to keep pace risk fines, legal disputes, and lost opportunities. Insolvencies and contract disputes have only added to project instability.

Proactive measures:

• Work with legal counsel to stay current on evolving safety standards.
• Review contracts carefully to address insolvencies and limit disputes.
• Incorporate compliance reviews into long-term planning.

Rising Insurance Claim Costs

Social inflation, litigation funding, and shifting public sentiment have driven up claim costs and verdict amounts. At the same time, project disputes tied to workmanship and safety issues have added to expenses.

Steps to reduce exposure:

• Follow building codes and best practices consistently.
• Increase worksite supervision and quality assurance.
• Strengthen safety training and onboarding processes.
• Leverage technology to support safer operations.

Severe Weather and Natural Disasters

Floods, wildfires, hurricanes, and other extreme weather events continue to rise in frequency and cost. These events can damage equipment and materials, create supply chain delays, and threaten employee safety. Insurers are responding by limiting coverage in certain regions, leaving some businesses underinsured.

Preparedness strategies:

• Use weather-resistant materials where possible.
• Diversify supply chains and maintain reserves of key items.
• Develop contingency plans for project delays and material losses.
• Document preparedness plans for insurers to strengthen coverage opportunities.

Building for the Long Term

These industry trends highlight one reality: Short-term fixes aren’t enough. By investing in loss control strategies, embedding compliance into daily operations, and building scalable safety programs, construction leaders can reduce exposures and support sustainable growth.

At Trucordia, we help construction businesses with management programs that are built to last.

Learn more about construction business insurance solutions and risk management.