Marsh Predicts Growth in NA Medical and Mining Construction

With rising costs, tariff concerns and geopolitical volatility reshaping the construction landscape, insurance broker Marsh has released its Q1 2026 Construction Market Update, highlighting the key trends driving the construction insurance market across the United States and Canada.

In the US, Marsh predicts growth in the construction of medical facilities, airports, large infrastructure and educational institutions.

In Canada, the report predicts growth to centre around mining, civil infrastructure and manufacturing. 

Corresponding insurance trends

According to Marsh’s Q1 2026 Construction Market Update, limitations exist within individual insurer participation in the US. This is expected to continue as project value increases along with the challenges associated with reinsurance. In Canada, continuous growth in capacity and growth targets for domestic insurers have triggered oversubscription even within complex projects.

While defect exclusions persist in the US, proprietary insurer wordings have substituted LEG3 clauses, introducing stricter definitions of defects and damage, increased deductibles and embedded sublimits. Conversely, LEG3 coverage remains in use within Canada, influenced by ongoing legal disputes surrounding the distinction between 'damage versus defect' that have limited coverage to the 1996 form instead of the 2006 version.

Pricing stability within the market 

Marsh said the US construction insurance market remained stable during the second half of 2025, with well-managed projects experiencing premium reductions of 5% to 8% in areas with limited catastrophe exposure. Despite the reduced pricing, insurers remained cautious about natural catastrophe risks, particularly wildfires and severe convective storms, while the absence of a major industry-wide loss event helped maintain favourable market conditions across sectors. 

In Canada, pricing stayed competitive due to ample market capacity, although insurers generally maintained higher deductible minimums because of claims inflation. Marsh noted that catastrophe-exposed projects and higher-risk occupancies continued to face stricter underwriting and elevated deductibles, while water damage remained a leading source of construction claims across the entire region.

Contractual liabilities and casualty rates

In terms of indemnity and liability capacity for contracts, the report highlights insurers in the US offering primary limits of US$10m with some extending the amount of coverage to US$25m at a market capacity which exceeded US$350m. Program rates increased by 2% in Q4 2025, moderating from a 3.4% increase in the prior quarter. During this time, there was demand for road and highway infrastructure, digital infrastructure, logistics facilities, refineries and multi-family housing developments.

As for Canada, the report says the country’s professional liability insurance market continued to expand, with new insurers entering the market and project-specific professional liability capacity exceeding US$100m. Premiums and rates remained largely stable, while annual professional indemnity rates were flat or increased by 2% to 5%.

In the US, casualty rates remained flat or increased by up to 5%, while general liability rates were flat to 10% and auto rates rose 5% to 20%.

Marsh attributed these increases to factors including rising nuclear verdicts, third-party funded litigation, inflation and higher interest rates, with insurers maintaining a focus on underwriting and favorable loss histories as clients continued to retain more risk.

“The risk environment remains complex,” says Paul Knowles, Global Chairman of Construction at Marsh. “Geopolitical volatility, shifting trade dynamics and uneven economic conditions influenced project pipelines, costs and contract performance.

“The insurance industry’s response to these trends remained critical to economic stability across many industries, including construction. Our Construction Market Update Q1 2026 provides a regional view of insurance capacity, pricing, coverage and underwriting in response to the evolving landscape.”