Addressing the Surge in Construction Industry Risks Amid Growth and Labor Shortages (CLM)

Addressing the Surge in Construction Industry Risks Amid Growth and Labor Shortages

Friday, March 8th, 2024 Education & Training Risk Management Technology Workers' Compensation

The construction industry is set to experience a significant increase in output, projected to grow by 85% to $15.5 trillion worldwide by 2030, according to Global Construction Magazine. This growth comes amidst escalating challenges such as litigation trends, labor market constraints, cost escalations, and supply-chain disruptions, complicating the claims risk landscape. These factors, along with the increasing complexity of construction projects, are driving up insurance costs and potential liability for businesses and contractors. Additionally, the industry is grappling with a severe labor shortage, further complicated by a workforce that often lacks experience and safety training, increasing the risk of accidents and inefficiencies.

To combat these issues, the industry is focusing on total cost of risk (TCOR) by adopting strategies that include comprehensive safety training, technology and data efficiency, and building a culture of wellness among workers. Emphasizing health and safety can mitigate risks and contribute to a more efficient, productive workforce. Implementing technology and leveraging data can improve project management and reduce exposure to losses. These strategies not only address the immediate challenges but also lay the groundwork for sustainable growth and profitability in the face of rising costs and labor shortages.

Amidst these challenges, proactive measures such as mandatory loss prevention training and certification, along with strategic investments in health and wellness programs, are crucial. These efforts can help build a supportive work environment and reduce the risk of high-value claims. The introduction of technology and data efficiency is also essential in modernizing the industry, making projects smarter and safer.

As the construction industry navigates these complexities, focusing on risk management, safety training, and technology adoption is imperative for reducing liabilities and controlling costs. By prioritizing these areas, contractors and construction businesses can achieve better outcomes, ensuring the industry’s robust growth in the face of escalating challenges.


Claims Pages Staff Writers are dedicated professionals covering a broad spectrum of insurance topics, including auto, catastrophe, education & training, fraud, legislation, liability, life & health, litigation, property, risk management, technology, underwriting, and workers' compensation. With over 25 years of distribution, our publication brings you accurate and timely information to keep you informed and ahead in the claims industry.


External References & Further Reading
https://www.theclm.org/Magazine/articles/construction-in-2024-risk-management-insurance/2871

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