Contract works insurance saw an average decrease of 5%, while design and construction professional indemnity premiums fell by approximately 10%. This shift marks a significant turnaround from the upward trajectory observed in 2024, where insurers were increasing premiums and tightening conditions in response to loss experiences and capacity constraints.
The softening market is attributed to increased capacity and new entrants since 2024, intensifying competition and providing clients with greater choice. However, claims inflation has emerged as a point of tension. Disputes over reinstatement costs have delayed settlements, with insurers scrutinising supplier cost increases. Additionally, the involvement of insurer-appointed law firms has further slowed the claims process.
Looking ahead, competition is expected to persist through the second half of 2025. Success in optimising terms will depend on the quality of submissions, with well-structured data and demonstrable risk management around site safety, project timelines, and contractual allocation serving as crucial differentiators.
For tradespeople and small business owners in the construction sector, this trend presents an opportunity to secure more favourable insurance terms. Engaging with insurance brokers to explore tailored solutions and demonstrating robust risk management practices can help capitalise on the current market conditions.
