Challenges in the Construction Industry: 2024 Benchmark Report

The construction market is alive and well, especially given the windfall of $550 billion in federal funds provided for the sector over the next five years. However, this year’s benchmark survey revealed some surprising challenges for the construction industry.

With nearly 1,500 respondents, much of the data met general expectations.

On the bright side, property values increased while rates remained largely stable. General liability rates were relatively stable.

Still, payroll as a percentage of revenue did not rise in all areas. It varied across the board, with general contractors receiving the lowest pay and plumbing/HVAC having the highest wages.

Equipment limits for contractors increased and their coverage varied by segment, with highway/underground leading the way with the highest limits.

Those trends were on track with our research, but there were some notable surprises.

  • Excess liability limits decreased compared to last year, likely due to substantial rate increases. Overall, we expected lower increases.  
  • Even as companies of all sizes continue to be successful targets of cybercriminals, the purchase of cyber, executive risk, contractor’s professional liability, and environmental impairment liability coverages continue to be purchased with relatively modest limits.
  • Workers’ compensation experience modifications have generally increased from prior reports.
  • Subcontractor default insurance has become more common.

This year’s standout was general construction, which accounted for about one-third of the respondents and a combined $17 billion in revenue. The average company in this specialty generated just over $33 million last year.

As expected, their limits on property insurance increased and equipment limits were modest. Property rates decreased even as the total insured value increased. The size of the contractor determined the rate per million of excess liability limit.

On the other hand, general construction saw some dramatic an unexpected changes year-over-year.

The sector saw a large increase in property values and excess liability rates. This resulted in a significant reduction in excess liability limits. Professional liability limits also increased compared to last year’s report.

Read the full report for in-depth information on various sectors. The report has been designed to help construction insurance buyers make more informed decisions. Contact us to learn how we can help you get the coverage you need to protect your projects.

Reach Out to an Advisor

Risk management and insurance purchasing are complex decisions. RCM&D possesses the technical expertise and insurance company connections to help you through that process. We stand ready to answer any questions you may have or to discuss any aspects of this report in more detail.