The global construction sector is rapidly shifting into an era defined by megaprojects—multi-billion-dollar developments so large and complex they span regions, markets, and years of planning. From AI-powered data centers to renewable energy infrastructure, these colossal builds are transforming how risk is shared, insured, and managed across the entire project lifecycle.
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Experts told Insurance Business that the traditional approach to construction risk no longer matches the scale of today’s projects. Instead, stakeholders must rely on early engagement, multi-disciplinary collaboration, and extremely detailed planning to prevent disruptions that can cost millions—or billions.
According to Douglas Schrift, global head of infrastructure at Liberty Mutual, the shift has been dramatic. “Just three or four years ago, billion-dollar projects were rare,” he said. “Now we see multiple projects of that size every month, and they continue to grow.”
Schrift said the growth is fueled by a surge in national infrastructure investment, AI-driven demand for data-center capacity, and an aggressive global push toward clean-energy systems. McKinsey & Company projects that capital expenditures for data-center infrastructure alone will reach nearly $7 trillion by 2030, with more than 40% in the U.S.
These megaprojects often involve cutting-edge technology, global supply chains, extreme redundancy requirements, and increasingly complex stakeholder networks—all of which heighten exposure and the need for highly tailored insurance solutions.
Beyond technical sophistication, the industry is still battling persistent workforce shortages.
“Skilled labor has been an issue (in construction) since the Great Recession in 2008,” Schrift noted. As megaproject demand accelerates, labor tightness becomes more severe, especially for remote sites or highly specialized equipment operators.
These shortages can lead to quality-control challenges, project delays, and increased claims—driving greater demand for subcontractor default insurance and more robust casualty coverage.
Compounding the labor problem is the rise in legal system abuse and increasingly aggressive plaintiff strategies.
According to Aldo Fucentese, senior vice president and chief underwriting officer for Liberty Mutual’s construction practice, the trend is unmistakable. “A bodily injury claim today can cost two or three times what it did five years ago,” he said. “Third-party litigation funding and aggressive advertising by plaintiff attorneys are driving nuclear verdicts. That cost burden ripples across the entire insurance system.”
A 2024 WTW report similarly identified third-party bodily injury claims and design-build delivery models as major contributors to severe losses in roads, highways, and large infrastructure projects.
A major concern for today’s massive builds—particularly data centers—is property insurance capacity.
Fucentese stressed that the scale of these projects is straining the market. “A $10-billion (data center) project needs enormous capacity. No single market can take that on, so it’s typically written on a quota-share basis across multiple carriers,” he said.
Property capacity remains available, but projects sited in catastrophe-prone regions face heightened scrutiny and more difficult placements.
Cyber risk is emerging as another unpredictable variable, particularly for the digital infrastructure powering AI and cloud services. Questions about how to assign responsibility for post-completion failures—such as data loss or operational outages—remain unresolved. “If something happens after completion and data is lost, who is liable? How is that risk transferred?” Fucentese asked. “It’s an evolving area.”
With megaprojects becoming the norm, insurers, brokers, and contractors are adopting holistic lifecycle strategies that stretch from early design through construction, operation, and even decommissioning.
This philosophy is the foundation of Liberty Mutual’s new global infrastructure solutions practice, launched under Schrift’s leadership. The practice integrates underwriting, risk engineering, and claims expertise under one umbrella to support complex global builds.
“We don’t want a brushstroke approach; it’s about being surgical,” Schrift said. “We’re building deeper relationships with customers to tailor solutions that meet their specific needs and risks.”
Even as data centers continue to dominate the construction pipeline, not all contractors are eager to take every available contract. Fucentese noted a growing trend of strategic restraint.
“Some contractors are even walking away from billions in data center work because they don’t want to overextend resources or neglect other clients,” he said. “This boom won’t last forever.”
Experts agree that the megaproject era requires unprecedented communication, transparency, and planning.
Schrift underscored that success depends on partnership: “These projects require visibility across all stakeholders, and the sooner partners are brought into the conversation, the better. This is especially important as the landscape shifts.”
Originally reported by Gia Snape in Insurance Business.
