The construction risk landscape in 2025 and heading into 2026 is anything but static. Between billion-dollar storms, evolving underwriting appetites, and the rise of AI-powered everything, it’s proving to be a wild ride.
This article translates insurance “legalese” into practical language to help leaders in construction navigate what’s happening and prepare for what’s next.
Whether you’re a contractor trying to make sense of your builder’s risk renewal, a broker looking to see how others are viewing the market, or an underwriter wondering if you’re the only one still using a fax machine (you’re not), this article is for you.
Property Insurance
Commercial Property
In 2025, the U.S. commercial property and builder’s risk insurance market is balancing volatility from climate-driven events with emerging construction innovation. Those forces have infused carrier optimism and a renewed willingness to deploy capacity and capital.
Early in 2024, the property market began to show clearer signs of a shift, marked by rate relief and increased carrier appetite. However, weather-related events have not slowed, nor have they become less costly.
According to Gallagher Re and reported by the Insurance Information Institute, global catastrophe losses at the end of 2024 totaled at least $402 billion, with 37.6% of those losses insured.1 In the first half of 2025 alone, the U.S. reported over $100 billion in insured losses, with $19 billion driven primarily by convective storms and the Southern California wildfire.2
Despite these challenges, the property market continues to show signs of rate relief and stabilization. Capacity is expanding, leading to increased competition and resulting in decreased rates, lower deductibles, and broader coverage, particularly for well-managed risks. Even historically difficult to insure properties in coastal regions have seen rate softening in 2025. For more, see Exhibit 1.
Insurers are increasingly managing their exposure through quota share structures. This approach provides a buffer for both insureds and reinsurers. However, properties with prior losses or significant catastrophic exposure continue to face elevated rates and tighter underwriting terms.
While the broader commercial property insurance market is showing signs of softening, contractors may not experience the same level of benefit. For the most part, due to lower total insured values, contractors have been relatively insulated from the harshest impacts of the hard market cycle.
Property insurance often represents a smaller portion of their total cost of risk, which has helped shield them from steep premium increases. However, this also presents a catch-22: with lower premiums and modest property schedules, contractors have less leverage to negotiate significant rate reductions, even in a softening market.
Additionally, many admitted carriers are still retroactively adjusting property valuations to account for inflationary pressures, which can offset potential savings.
As a result, contractors should temper expectations for substantial premium decreases, especially when their property spend is minimal relative to their overall risk profile.