By: Brett Findlay, Senior Vice President, Business Risk Specialist, OneGroup
The construction industry has never been a stranger to volatility, especially in recent years. From supply chain disruptions to labor shortages, expecting the unexpected has become commonplace. But as we move into 2026, a shift is underway in the insurance marketplace—a shift that could provide both relief and new challenges: the softening of the insurance market. Having a handle on how you can manage your insurance program for the impacts of a softening market is important. The following highlights trend impacts for commercial general liability, workers’ compensation, and commercial umbrella coverage. All of which are, essential for construction leaders looking to protect their assets, grow their margins, and manage risk.
The Softening Market: A Welcome Return for Construction
After several years of navigating a hard market in New York—years marked by rising premiums, reduced capacity, and stricter underwriting—2025 showed signs of stabilization and even softening across key lines of insurance. This is a promising development.
Increased competition among a growing number of carriers, large capital inflows, and ever-evolving risk management strategies have driven broader coverage options and, in many cases, stabilizing premium and in some cases even premium reductions. There are carriers who’ve recently entered the New York construction insurance marketplace. This is the first time in years that we’ve seen standard market, financially sound carriers willing to come into New York State for the first time and provide quality options for contractors. We’ve reached a point where they believe premiums are sufficient enough that they feel comfortable funding for losses and still be profitable.
Yet, as always, the construction sector does remain a complex environment. Individual local market segments, project types (framed construction), and risk profiles will drive outcomes. Not all segments are realizing relief at the same rate, if at all.
Commercial General Liability: Moderating Rates, Persistent Challenges
Commercial general liability (CGL) remains a critical piece of risk management for contractors, especially in NYS. In 2025, rate increases nationally for CGL have moderated, with most policyholders seeing jumps in the 1% to 9% range. This was an improvement over the double-digit increases in prior years. Certain classes of business still face pressure due to outsized jury verdicts and social inflation, but the overall slant is positive.
Key Trends:
• Litigation funding: The rise of third-party litigation funding is prolonging and increasing the cost of claims, driving up settlements and verdicts.
• Risk management: Insurers are rewarding strong safety programs and loss control measures. Clean, well-managed accounts benefit from competitive pricing and ample capacity.
• Contractual risk transfer: Strong contractual risk transfer and safety processes and procedures will continue to lend themselves to stronger and more consistent market results.
Action Steps for Contractors:
• Continue to start insurance renewal discussions early and provide accurate, comprehensive data to carriers. With new carriers entering the fold, they’ll need time to underwrite thoroughly. The better they know your business, the better program they’re willing to provide.
• Invest in safety and risk management programs to demonstrate insurability. Your agent should be able to assist here at a deep level.
• Consider alternative program structures, such as captives, higher deductibles, or SIRs, to manage costs.
Workers’ Compensation: Rate Relief and Safety Gains
Workers’ Compensation has been one of the few lines of coverage showing consistent rate decreases. In fact, there have been aggregate loss cost decreases across all classifications for ten consecutive years in NYS. That trend has continued and accelerated; for example, 2024 saw a 9% overall loss cost reduction, with a 13.2% decrease filed and approved in 2025. This is an indication that carriers are profitable on this line of business. Nationally, claims frequency in construction has declined by 4.1% annually from 2015 to 2023, outpacing other industries and surely aiding in the continued market softening.
Key Trends:
• Declining claims frequency: Improved safety practices, better training, and automation have proven impacts on driving down claims.
• Labor market dynamics: Increased wages and employment have led to higher premiums, helping loss ratios. Even with the increases, the market remains profitable, with a combined ratio of 86% in 2024.
• Regulatory changes: Adjustments to experience rating formulas and premium adjustment programs (PAP) credits are impacting individual policy costs. You should have a good handle on this as well as your agent’s handling of these items for you.
Action Steps for Contractors:
• Forecast future costs and develop renewal strategies well in advance.
• Leverage PAP credits, payroll limitation, and stay informed about regulatory changes.
• Maintain a strong safety culture to continue driving down claims frequency and actively manage the claims that do occur.
Commercial Umbrella: Capacity Constraints and Layered Solutions
Umbrella and excess liability coverage have faced significant capacity challenges in 2025. In NYS specifically, increased claims severity and nuclear verdicts have led carriers to reduce limits, raise attachment points for the excess umbrella, and in certain circumstances, require more layered programs to secure adequate coverage. It’s exactly why you need to be focused on managing your program’s risk aggressively. Excess umbrella has shown some softening, but that’s for the strong performers. You need to be a strong performer and be able to showcase it to aggressively advocate for yourself.
Key Trends:
• Stricter underwriting: Carriers are being more selective with whom they’ll put up higher primary umbrella limits for, especially in high-hazard trades. Contractors may need to piece together coverage from multiple insurers to provide the limits necessary to meet some contractual requirements.
• Premium increases: Rate hikes are steeper for businesses with poor loss histories or high exposure. Driving down general liability costs can directly impact the premiums necessary for your primary $5M umbrella coverage.
• Alternative risk strategies: Captives, group programs, and higher self-insured retentions are gaining popularity on a larger scale to help contractors offset costs.
Action Steps for Contractors:
• Prepare to negotiate higher deductibles and layered coverage structures.
• Explore alternative risk transfer options, such as captives or parametric solutions.
• Strengthen risk management protocols to secure better terms from carriers.
Conclusion: Proactive Strategies for a Dynamic Market
The softening insurance market offers opportunities for construction companies to negotiate stronger terms and conditions, including better coverage and cost structures. However, the persistent challenges that have plagued NYS for decades are still present—litigation, capacity constraints, and evolving risks. Advocating for yourself requires a proactive approach to these challenges. Start the renewal process early, invest in safety and risk management, and explore creative program structures. Being proactive will position contractors for success in 2026 and beyond.
For more information on Construction Insurance Trends and the Softening Market please contact Brett Findlay, Senior Vice President Business Risk Specialist at (315) 280-6376 or BFindlay@OneGroup.com