Construction traditionally has been a business with a lot of risks to manage. Most construction companies are familiar with risks such as jobsite losses and project delays, but recent developments have introduced new worries and complexities – as well as innovative solutions.

For example, the coronavirus pandemic and government-ordered lockdowns have led to some new risks for the construction industry, including:

  • Project Stoppage. COVID-19 has required project owners and contractors to adapt to local public health regulations, which in some instances means shutting down. That in turn leads to project delays and additional expenses.
  • Site Security. When shutdowns occur, the risk of theft and vandalism on jobsites increases. Lumber, steel, wire, drywall and other building supplies can be tempting targets for thieves, as they typically lack markings that indicate their origin. During the pandemic, businesses in all industries are more cost-conscious, and some may elect to skimp on security expenditures. Of course, this generally leads to greater costs in the long run.
  • Supply Chain Disruption. COVID-19 has added pressure to supply chains across many industries, resulting in shortages of materials and delivery delays. Inevitably, these conditions prolong the time needed to complete construction projects.

Some good news

Recent developments and longer-term trends offer some good news for the construction industry, too. Technological advances are booming, for example, and technology companies are investing in solutions designed for the construction industry.

This is evident in several areas, including so-called smart cities, green construction, and renewable energy projects. Among the technologies that are making a difference in construction projects are:

Blockchain. Some construction companies are using blockchain, or distributed-ledger technology, to share information in real time and improve efficiency in workflows.

Drones. Unmanned aerial vehicles are becoming must-have tools to conduct site surveys and monitor project activity. UAVs, or drones, are capable of carrying sophisticated equipment to record and analyze conditions that would otherwise be difficult or unsafe to measure.

Smart sensors. From Global Positioning System-enabled equipment to networked temperature and water flow alarms, smart sensors can alert project owners and contractors to worksite issues before they become costly losses. Water damage, whether from intrusion, faulty valves or broken pipes, has long been a headache in construction projects. The sooner a leak is detected, the faster it can be remediated, to prevent extensive damage.

Augmented reality. A growing field, augmented reality (AR) enhances human perception of physical features with digital data. In construction, some companies are using this technology to provide three-dimensional visualizations of projects and measure buildings. Digital building information modeling (BIM) systems have been in use for a number of years to create virtual construction models, and AR is beginning to enhance these systems.

Modular and prefabricated construction. Advances in manufacturing are benefiting the construction industry in the form of modular panels and prefabricated building elements that can be produced offsite, brought to a project site and installed more quickly than conventional building methods.

Despite emerging risks and rising complexity in construction, ample coverage is available in the insurance marketplace, particularly for most midsize projects. To ensure appropriate coverage for construction industry businesses, however, it's important to work with an inland marine specialist.

Talk to us about the risks your business faces. To learn how Tokio Marine America can make a difference in your business, visit our product page.

About The Authors

Ben Tuttle,
Senior Vice President of Commercial Marine

Ben Tuttle is Senior Vice President of Commercial Marine at Tokio Marine America. He can be reached at

Heather M. Frain,
Director of National Wholesale Distribution

Heather M. Frain is Director of National Wholesale Distribution at Tokio Marine America. She can be reached at

About Tokio Marine America

As part of our commercial inland marine product offering, construction industry companies are well served by unmatched financial strength, dedicated underwriting experts, and a suite of flexible and proprietary insurance products that can be tailored to fit your needs.

With over a 100-year history in the U.S., Tokio Marine America (TMA) offers tailored products to a diverse range of customers – from small to large-sized global businesses seeking traditional multi-line coverage, to larger private and public companies requiring full risk management solutions. Our commitment to providing the highest level of service is paramount. More than 93% of our customers recommend TMA based on our superior claims service. TMA is one of only three insurers with an A++ (Superior) XV rating from A.M. Best. With a solid foundation of financial stability, our strength lies in understanding your business and working in partnership to exceed your expectations.

By offering fully integrated solutions to meet our customer’s needs, we endeavor to deliver ANSHIN – safety, security and peace of mind to all our customers.

Tokio Marine America (TMA) is the marketing name for Tokio Marine America Insurance Company (TMAIC).