As the construction industry continues its rebound from the recession, contractors are facing a rapidly changing risk landscape. Growth brings opportunity—but it also introduces new exposures that, if left unaddressed, can result in significant financial and legal consequences.
Labor shortages, expanded responsibilities in design, and increased reliance on technology are fundamentally changing how construction firms operate. To stay protected, contractors must reassess their risk management strategies and ensure their insurance coverage keeps pace with these evolving challenges. Below is a closer look at three of the most critical risks impacting the construction industry today.
The Ongoing Shortage of Qualified Workers
The construction industry has struggled with a labor shortage for years, and the issue has only intensified in the wake of the COVID-19 pandemic and increased immigration enforcement actions in 2025. According to Associated Builders and Contractors, the industry will need approximately 439,000 new workers in 2025 and nearly 499,000 more in 2026 to meet demand.
As construction activity ramps up, many firms are finding it increasingly difficult to hire skilled tradespeople, as well as experienced project managers, engineers, and estimators. This shortage often forces existing employees to take on heavier workloads, increasing the likelihood of workplace injuries, errors, and project delays.
In addition, contractors are employing more inexperienced workers who may lack proper safety awareness or the ability to identify hazards. This not only puts those workers at risk but also increases exposure for the entire job site.
Rising Professional Liability Exposure
More project owners are now seeking “design-build” solutions, asking contractors to take on both design and construction responsibilities. While this can be attractive from a business standpoint, it introduces a significant new risk: professional liability.
Standard contractor insurance policies typically do not cover design-related errors or omissions. When a contractor performs any design work—even partially—they assume responsibility for design deficiencies. This liability remains even if the actual construction is subcontracted.
Courts have consistently ruled that design professionals who engage in traditional construction activities lose certain liability protections. Likewise, contractors who perform design-related services can no longer shift responsibility for design flaws to architects or engineers. Without the proper professional liability coverage, contractors may be left exposed to costly claims.
The Growing Threat of Cyber-Security Risks
Technology has become integral to modern construction operations. From project management software to digital blueprints and employee records, contractors are storing more sensitive data than ever before.
While construction firms may not store credit card data, they do maintain confidential project designs and personal employee information. Cyber incidents are no longer hypothetical risks—they are happening in real time.
In one recent case, a contractor’s foreman had a company-issued laptop stolen from a café. The device contained sensitive company data and building design information. Due to confidentiality clauses in the firm’s contracts, the contractor was required to notify 2,300 current and former employees of a potential data breach and provide one year of credit monitoring.
Even though there was no evidence that the data was ever misused, the notification and monitoring costs totaled $25,000 out of pocket—a loss that could have been mitigated with proper cyber liability coverage.
The Takeaway: Align Insurance with Today’s Risks
As construction risks evolve, it’s essential for contractors to openly discuss changes in their operations during the insurance renewal process. Expanding services, workforce challenges, and increased use of technology may require additional coverages—such as professional liability and cyber insurance—to ensure your business is fully protected.
How BGES Group Can Help
At BGES Group, we specialize in helping construction firms navigate today’s complex risk environment. We work closely with contractors, builders, and construction-related businesses to identify exposures, structure appropriate insurance programs, and ensure coverage keeps pace with how you actually operate. We service New York, New Jersey & Connecticut.
Whether you’re facing labor challenges, taking on design responsibilities, or concerned about cyber risks, BGES Group can help protect your business today and into the future.
Contact BGES Group:
Gary Wallach 📞 914-806-5853
Let us help you build with confidence.