As 2025 comes to a close and businesses are finalizing budgets for 2026, uncertainty remains a defining theme. Tariffs have reignited supply chain concerns, while continued labor shortages, evolving legal landscape, and macroeconomic uncertainty are all impacting the construction industry. Coincidentally, those are also trends the insurance companies who support the industry are monitoring. While the commercial insurance landscape has largely stabilized after several years of volatility, some renewals will be challenging in 2026 as insurers and reinsurers continue to focus on appropriately pricing the risks they are insuring.
The Property & Casualty (P&C) insurance market achieved underwriting profitability in 2024 for the first time since 2020, and that is expected to continue in 2025. Some areas of the market, like workers’ compensation, continue to be profitable, and carriers continue to be aggressive in their pricing, while auto coverage continues to be a challenge for most insurers.
Our outlook by line of coverage and strategic considerations for construction companies is outlined below. For companies that have favorable claim experience, group captives continue to help manage their overall insurance spend.
Workers’ Compensation
Workers’ comp remained the most profitable line of coverage with the major P&C insurers, achieving a combined ratio of 88.8% in 2024. Increased wages have helped keep premiums from decreasing at the same pace as rates. Factors like improved safety practices and more robust return-to-work programs have helped improve the overall performance of this segment. Contractors with favorable claim experience should face stable renewals, as there are no signs of disruption in the market. Contractors with poor loss experience or increasing experience mods will experience steeper rate increases.
Commercial Auto
Auto coverage continues to be one of the more, if not the most challenging line across the industry, especially for construction companies with large fleets. Inflationary trends continue to impact repair costs and tariffs will only complicate this issue. However, social inflation is a much greater concern and has broadened its definition with a focus on third party litigation among other trends that continue to impact the industry. Auto liability claims continue to cost more to resolve and insurers are increasingly focused on promoting the use of telematics and cameras to help mitigate these risks. Contractors with “heavy fleets” will face larger increases than their peers, but even those with strong risk management practices and favorable loss history could be facing double-digit rate increases. Very few companies should expect stable renewals, unless there has been a significant improvement in their risk profile.
General Liability
General liability trends mirror the auto market but are not as significant for most businesses. Some trade contractors that the insurance industry views as “low-hazard” may see minor increases, but most will see mid to high single-digit increases, as contractors are continually the target of lawsuits simply because they are connected to a project that resulted in a significant injury. Contractors performing work in New York or involved in large street and road projects are examples of those who may be facing double-digit increases in 2026. Underwriters continue to focus on proper risk transfer techniques to ensure they are not taking on unexpected subcontractor risk.
Umbrella / Excess
The umbrella and excess market remains constrained, especially for high-risk or those with poor claim experience. Nuclear verdicts continue to negatively impact the market and increase costs for all businesses. Contractors with large or heavy fleets and those with poor claim experience should expect to see double-digit increases and some may be north of 20%, especially if any carriers are decreasing capacity. Litigation funding is beginning to receive more attention this year, and there are several states where tort reform is gaining traction. Very few contractors will see single-digit rate increases and should be aware of potential capacity reductions of any lead umbrella of $10,000,000 or more and any layers of that amount higher in the tower.
Property & Inland Marine
Subject to individual claim experience, contractors largely will see stable increases in property and inland marine renewals. With inflation returning to manageable levels, insurance companies are no longer pushing double-digit rate and value increases at renewals. Competition remains very strong for contractors’ equipment and other inland marine coverages, including Builder’s Risk, with an exception of frame construction. Even contractors with adverse claim experience are often seeing manageable single-digit increases.
Pollution & Professional
While not as widely adopted by contractors as the coverages previously mentioned, most contractors recognize the exposure and have now purchased the coverage. Overall, capacity remains plentiful as new carriers enter the market and most businesses will see only low single-digit increases. Carriers continue to monitor legal trends related to design liability and PFAS, or “forever chemicals”. As with all coverages, this will be impacted by claim experience, but even those who have had adverse claim experience will find coverage available in the market. However, there may be significant changes to retentions and premiums.
Cyber Liability
Cyber risks remain dynamic, with evolving threats, regulatory changes, and rising claim severity. The pace of cyberattacks, particularly ransomware and social engineering, continues to grow. In the first half of 2025, the average cost of an individual ransomware attack rose by 17% according to Resilience’s Midyear 2025 Cyber Risk Report. Despite that, pricing stabilized significantly over the last two years after several years of significant volatility. Most businesses saw flat renewals or rate decreases in many cases. We expect to see more stability in 2026 with single-digit increases, though we likely won’t see the same level of competition, as carriers look to maintain profitability and keep a close eye on how Artificial Intelligence will impact cybersecurity exposure. Multifactor authentication and endpoint detection and response continue to be best practices that will help guarantee the most competitive pricing. Additionally, a thorough Breach Response Plan will be required to maintain favorable coverage for Business Interruption coverage terms.
Management Liability
Primarily comprising of Employment Practices, Crime, Fiduciary Liability, and Directors & Officers, these lines are generally a small portion of overall insurance spend for contractors. Competition among insurers keeps pricing relatively stable, with low single-digit increases expected at most renewals. Crime renewals can be impacted by the level of cyber coverage on that policy. Clients who cannot obtain sufficient Social Engineering limits under their cyber policy should look to add the coverage to the crime policy. Additional coverage can often be added for a reasonable premium.
Summary
While most contractors will not see significant volatility across their renewals in 2026, there will be challenges on certain lines. Inflation, an unfavorable legal climate, and evolving exposures will impact pricing in the upcoming year. As always, your individual renewal will depend heavily on your loss history, safety programs, fleet exposures, risk profile, and geographic location. We continue to advocate for early engagement, transparency with underwriting partners, and ongoing investment in risk management to smooth the path forward. McConkey’s continued investment in Risk Solutions and Claims Services, as well as appropriately timed marketing of insurance programs and the use of Group Captive programs, continue to help our clients manage their overall insurance spend.
