Top Engineering & Construction Risks

Published: 30/08/2019

Top Engineering & Construction Risks

Over the past five years, global insurer Allianz has analysed approximately 13,000 engineering and construction insurance claims and found seven key risks which are having the biggest impact on the sector.

Allianz's 'Engineering and Construction Claims and Insurance Trends' Report¹ outlines the following key risks based on the high volume and recurrence of insurance claims in these areas:

  • High value projects are resulting in bigger loss impacts - Construction sites today are getting larger and more costly, such that sums insured also have to be much larger, which in turn means that claims can be in the millions of dollars.

  • Fire / Explosions - Fire is the leading cause of financial loss for engineering and construction claims.

  • Defective product and quality control - Defective products are the leading cause of engineering and construction claims in terms of frequency.

  • Greater supply chain complexity - Today's large-scale construction and engineering projects can involve multiple suppliers and contractors with machinery, parts and equipment from around the globe. With multiple points of failure, many parties involved and tight deadlines, this can result in significant loss.

  • Business interruption/start up delays - The Allianz Risk Barometer report 2019 identified business interruption to be the top risk facing businesses globally². Project delays are a major contributor of loss to engineering and construction businesses.

  • Political risk and sanctions - It can take between five and ten years to complete some large construction projects. When you consider that this might involve contractors and suppliers from around the world, that can leave construction and engineering businesses exposed to potential sanctions and trade disputes.

  • Growth in renewable energy projects - With the demand for green energy on the increase, solar and wind projects have grown, location for them have become more remote and wind turbines even bigger. The turbine blades can be as long as a football ground and can be difficult to access with offshore winds particularly challenging.

How Coverforce can help

Understanding the significant insurance risks and exposures that might affect building projects is what we do.

We have been a specialist provider of insurance and risk advice to the construction industry for the last 20 years and currently work with some of the largest and most reputable builders, civil contractors and property developers across Australia.

Contact your local Coverforce Office today to find out how our expert team can help manage your risks with insurance that is tailored specifically to your business.

The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.


  1. Engineering and Construction Claim and Insurance trends, Allianz Global Corporate & Specialty, August 2019.
  2. The Allianz Risk Barometer 2019

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