<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=2119418688374700&amp;ev=PageView&amp;noscript=1">

Navigating the Builder’s Risk Insurance Market: Why Early Coverage Matters More Than Ever

April 28th, 2025

2 min. read

By Eric Lehmann, Sr. Account Executive | Construction Practice Lead

The builder’s risk insurance market has changed dramatically in just a few short years. What used to be a stable, relatively predictable space has become increasingly volatile and far more expensive.

Since 2021, average annual rate increases have jumped to 7.6%, up from the typical 2–3% range before 2022. And it’s not just about cost—carrier capacity is tightening, especially for wood frame projects over $5 million.

If you’re planning a construction project in 2025, understanding these shifts is key to protecting your timeline and your bottom line.

What’s Driving the Change?

Several global forces are shaping the builder’s risk landscape:

  • More frequent and severe weather events. In the U.S. alone, 2023 saw 28 weather and climate disasters causing nearly $93 billion in damages. In 2024, that number rose to $182.7 billion across 27 disasters. And 2025 is already off to a costly start, with wildfires near Los Angeles generating an estimated $35 billion in losses.

  • Pressure on reinsurance markets. Carriers rely on reinsurance to help manage catastrophic risk and those costs are rising. As reinsurers pull back or demand higher premiums, the impact trickles down to builder’s risk policies.

  • Supply chain disruptions and inflation. Material shortages and increased construction costs are pushing up project values and insurance premiums along with them.

Together, these factors have made coverage more expensive, harder to place, and slower to secure.

Why Builder’s Risk Coverage Is Non-Negotiable

The construction industry continues to grow, with 10% increases in nominal value and 12% gross output gains in 2024 alone. But as more money flows into builds, so does the risk.

From high-rises and stadiums to commercial remodels and industrial facilities, builder’s risk coverage is the financial safety net for any job in progress. It protects the value of the work—and everything that goes into it—from fire, theft, weather damage, and more.

Without it, even a minor incident can delay timelines, disrupt cash flow, and wipe out margins.

Engage Early

Builder’s risk isn’t something to price-shop at the last minute. With reduced carrier appetite and tighter underwriting, the best coverage at the best rate often goes to those who plan ahead.

Here’s what early engagement gets you:

  • More time to find the right carrier, especially for complex or high-value projects

  • Greater flexibility in coverage design, extensions, and deductibles

  • Stronger positioning with underwriters, who prefer well-prepared submissions

  • Strategic budgeting that considers insurance as part of the project’s risk profile, not just an expense

It’s also important to have a broker who knows this market inside and out. Someone who understands shifting appetites, reinsurance pressure, and how to advocate for your team in a changing risk environment.

Don’t Wait Until It’s Too Late

Builder’s risk coverage isn’t what it used to be—and that’s not a bad thing. It’s a reminder that risk management needs to be as dynamic as the construction industry itself.

If you have a project coming up, now is the time to evaluate your current approach, identify potential gaps, and create a plan to secure the right policy before breaking ground.

Let’s start that conversation early so your team can build with confidence.

 

Eric Lehmann, Sr. Account Executive | Construction Practice Lead

After starting his career as a logistics specialist in the U.S. Navy, Eric then turned to insurance. He has been in the insurance industry for nearly 15 years including the past three at McClone. As McClone’s construction practice lead, he brings a deep understanding of the unique insurance and compliance needs of our construction clients. In addition to working directly with clients, Eric works with carrier partners and construction association partners on innovative ways to develop coverage enhancements and education programs for construction clients. Eric provides program analysis, recommendations and service to his clients ensuring that they have a clear understanding of their programs and coverage. He has experience in a range of insurance issues relevant to construction businesses including risk management, subcontractor default insurance, commercial insurance, casualty insurance and more. Eric is a Certified Insurance Counselor, a member of the Associated Builders & Contractors of Wisconsin’s Legislative Committee and sits on the Board of Directors for the Construction Financial Management Association of Northeast Wisconsin. He holds a Master’s in legal studies from the Washington University School of Law and a BA in business administration and management from Clarke University. Married for 16 years, Eric has two sons, ages 14 and 10. He enjoys spending time with his family outdoors, traveling, golfing and keeping active through running.

What is a Waiver of Subrogation for Work Comp? Are there Risks?

May 20th, 2025|4 min. read

Your Experience MOD Factor Explained

April 28th, 2025|5 min. read

What Is Builder’s Risk Insurance—and Do You Need It for Your Project?

April 8th, 2025|2 min. read

The Impact of New Tariffs and Labor Shortages on GMP Projects

February 20th, 2025|2 min. read

Mental Health Crisis in Construction: Safety Isn't Just Physical

May 23rd, 2024|2 min. read

Can software help with construction workplace safety?

August 16th, 2023|3 min. read

Making Workplace Safety Tech Work for You

June 14th, 2023|2 min. read

OSHA Launches New Fall Protection Initiative: What to Know

May 4th, 2023|1 min. read
Return_to_Work_Program

5 Tips for Developing a Successful Return to Work Program

April 7th, 2021|3 min. read
Construction worker on scaffolding

5 Ways to Promote Safety Practices in the Workplace

February 17th, 2021|2 min. read
man using smart watch and tablet

Making Workplace Safety Technology Work for You

August 5th, 2020|3 min. read
Is_Workers’_Compensation_the_Same_in_Every_State

Is Workers’ Compensation the Same in Every State? How Wisconsin Compares

June 11th, 2020|2 min. read
Construction site with crane and building-1

Most Common OSHA Violations in Construction (And How to Prevent Them)

June 3rd, 2020|3 min. read
Engineering automation building designing. Construction industry technology

What Construction Companies Need to Know About Cyber Security

December 19th, 2019|3 min. read
successful_enginee_smiling_with_arms_up_at_construction_site

Three Core Strategies for Winning Construction Bids

December 11th, 2019|3 min. read
crisis

Developing a Crisis Communication Plan for Construction

November 27th, 2019|4 min. read
signing the agreement

6 Important Construction Contract Terms You Shouldn’t Overlook

October 30th, 2019|5 min. read
Close up of businessman hand drawing sketches of buildings

Best Practices to Avoid Construction Cost Overruns

October 9th, 2019|3 min. read
Top 4 Technology Challenges in the Construction Industry

Top 4 Technology Challenges in the Construction Industry

September 25th, 2019|3 min. read
Solar panel on roof top

Green Building and its Impact on the Construction Industry

August 21st, 2019|3 min. read
Construction of a modern building and a skyscraper

Today’s Top 5 Construction Industry Risks

July 24th, 2019|3 min. read
iStock-512122746

What You Need to Know About OSHA Inspections

June 5th, 2019|3 min. read
business people group on meeting and presentation  in bright modern office with construction engineer architect and worker looking building model and blueprint  plans

Developing a Business Continuity Plan for Construction Companies

May 15th, 2019|4 min. read
Industrial worker cutting and welding metal with many sharp sparks-1

5 Practical Hiring Strategies for Recruiting Skilled Labor

April 17th, 2019|3 min. read