Every year brings new commentary about where the construction insurance market is headed. This year, Deloitte’s 2026 Engineering and Construction Industry Outlook gives agents plenty to work with. Tariffs, labor gaps, and a shifting builders risk market are reshaping what your construction clients need from their coverage, and the data points below show exactly where. Here are five numbers worth knowing before your next construction renewal conversation.
25% to 30%: The Tariff Rate Reshaping Project Valuations
The effective tariff rate on construction goods hit a 40-year high of 25% to 30% in 2025, with steel and aluminum tariffs reaching as high as 50%. Material prices climbed steadily through the back half of the year.
For agents, this is a valuation problem before it’s anything else. A builders risk insurance policy written a year ago, at last year’s material costs, may already be underinsured. Encourage clients to revisit project valuations regularly rather than setting them once at the start of a build.
176 Gigawatts: The Data Center Boom Changing Project Scale
Power demand from U.S. data centers could grow more than fivefold by 2035, from 33 gigawatts to 176 gigawatts, according to Deloitte. These builds run into the billions and function more like small utilities than typical commercial projects, so standard commercial coverage may not be enough. Clients moving into this space need capacity and construction risk management built for megaproject scale.
499,000: The Worker Gap Straining Every Job Site
Half a million new workers. That’s roughly what the industry needs in 2026, up from 439,000 the year before. Factor in Deloitte’s numbers on retirement, 41% of the current workforce by 2031, and youth, just 10% of workers under 25, and the picture only tightens.
A workforce this stretched creates more than hiring headaches. It raises the odds of subcontractor default, safety incidents on understaffed crews, and workers’ compensation claims tied to less experienced labor. Ask clients how they’re managing crew experience, not just crew size.
30%: More Projects Are Entering the Pipeline
Commercial and institutional planning activity rose 30% year over year in August 2025, even as overall commercial construction activity slowed for much of the year. Projects in planning today are the accounts headed toward groundbreaking, and toward a builders risk quote in the months ahead.
Get in early. Agents who engage these accounts while they’re still in planning have more room to shop terms and secure capacity before a project moves to active construction and the coverage clock starts.
88.2%: The Jump in Project Abandonment
A fuller pipeline doesn’t mean every project reaches the finish line. Project abandonment activity rose 88.2% year over year in August 2025 as elevated costs pushed developers to walk away from planned work. Cost pressure, not just weather or delay, is now a real driver of projects stalling mid-build. This puts a spotlight on contract language. Cancellation provisions, valuation clauses, and how a policy responds if a project stalls or is abandoned outright all matter more than they did a few years ago.
A Construction Liability Insurance Checklist
Five numbers, five conversations. Work your way through this checklist to start a dialogue with your construction accounts:
- Confirm builders risk valuations reflect current material and tariff-driven costs
- Ask whether any upcoming projects involve data centers or large-scale energy infrastructure
- Review subcontractor vetting and workers’ compensation exposure given labor shortages
- Revisit builders risk placements written during the hard market for better terms
- Check cancellation and valuation language in case a project stalls or is abandoned
FAQ
Why did builders risk insurance pricing loosen in 2026?
After a prolonged period of rate hardening, more capacity entered the market and insurers grew more open to larger, more complex projects, giving agents room to negotiate better property insurance terms.
How do tariffs affect a client’s coverage limits?
Rising material costs from tariffs can outpace a project’s stated value, leaving coverage limits too low if valuations aren’t updated regularly.
Are data center projects harder to place?
They typically require more capacity and specialized risk engineering than standard commercial builds, given their scale and unique infrastructure needs.
What should agents watch for with labor shortages?
Increased subcontractor default risk, safety incidents tied to less experienced crews, and workers’ compensation exposure are all worth reviewing with clients directly.
The Jencap Advantage
Construction risk management doesn’t sit still, and neither should your placements. Jencap’s construction team works these accounts every day, from standard commercial builds to complex wrap-ups, with the market access and insight to help you place even the trickiest risks with confidence.
Have a contractor insurance account that doesn’t fit the standard mold? Reach out to the Jencap Construction team to talk through your options.
