Construction Insurance Market Divides: General Contractors See Relief While Trade Contractors Face Tighter Conditions
The construction insurance sector continues to operate in a hard market, but the challenges are not uniform across all contractors. While general contractors (GCs) are beginning to see some stabilization, trade contractors are facing increasingly difficult conditions and reduced capacity.
According to Kevin Hahn, senior vice president at Jencap, a divide is emerging in how general contractors and trade contractors are being treated in the current market. “We’re seeing a divide emerge in how general contractors and trade contractors are being treated in the current market,” Hahn said. “It’s forcing agents to think differently and act more strategically.”
In regions such as New York, general contractors with strong risk profiles are benefiting from shifts in carrier appetite. Those with good loss histories, detailed subcontractor controls, and robust safety protocols are attracting more interest from insurers. “More excess capacity is available, and rates are stabilizing for the most desirable risks. The general contractor insurance market is looking up,” Hahn noted.
In contrast, trade contractors, particularly those in high-exposure trades like roofing, exterior masonry, concrete work, and steel erection, are facing a much tougher market. These trades often involve working at heights and are subject to strict regulations under New York Labor Law, factors that are causing carriers to reassess their willingness to provide coverage.
“These types of trades operate from heights, require a direct labor workforce, and are heavily exposed to the New York Labor Laws,” Hahn explained. Insurers are responding by reducing capacity, tightening underwriting standards, and introducing more exclusions. Even previously stable accounts are now experiencing significant premium increases or difficulty obtaining quotes.
To address these challenges, brokers are turning to alternative solutions such as non-admitted carriers or layering programs across multiple markets. The segmentation of risk within the construction sector is becoming more pronounced, with insurers differentiating by trade, location, project type, and operational scope.
“This segmentation means we can’t rely on what worked last year,” Hahn said. “Each client now needs a tailored approach. What’s available to one contractor might not apply at all to another, even within the same market.” Brokers must now more closely align a client’s risk profile with a carrier’s appetite, focusing on safety practices, job scopes, and geographic exposure.
To remain effective, brokers need to adopt more nuanced strategies. Clients, especially trade contractors, must understand the current market realities, including higher premiums, limited capacity, and tighter terms. Applications must be thorough and well-documented, with current safety records, subcontractor practices, and detailed scopes of work.
In cases where traditional markets are insufficient, brokers are exploring alternatives such as excess and surplus (E&S) lines or working with wholesalers who have established relationships in niche trade sectors. Brokers are also advising clients to invest in risk management practices that matter to underwriters, such as site-specific safety protocols and OSHA training.
For brokers managing construction accounts, having access to wholesale partners with market insight is becoming increasingly critical. Jencap continues to work with retail agents to find solutions across both general and trade contractor segments. “Our relationships across the construction sector allow us to think outside the box when placing coverage, especially for trades,” Hahn said.
The construction insurance market is not softening uniformly; it’s becoming more segmented. Agents who understand this divide and adjust their strategies accordingly will be better positioned to guide their clients through the challenges.
