Navigating Technological Risks in the Construction Sector

As technology continues to evolve, the construction industry finds itself at a crossroads—a rapid integration of innovative tools like software systems, building design programs, and drones is transforming daily operations. However, this digital shift brings forth an array of risks that insurers and brokers must address to adapt their insurance products effectively.

The Rise of Digital Tools in Construction

At a recent TechTalk Live event organized by Insurance Times in collaboration with Hiscox, industry experts gathered to discuss the growing intersection between construction and technology. This event, held on October 2, 2025, highlighted how contractors are increasingly leveraging cutting-edge technology in their projects.

Dave Cargill, Hiscox’s Northern Regional Underwriting Manager, emphasized the need for innovation in insurance wordings. “There is room for innovation there on wordings, which have been pretty consistent across the market for a long time,” he stated. He pointed out that many construction businesses are now straddling the line between traditional contracting risks and those associated with technology firms, which complicates underwriting processes.

The Impact of Artificial Intelligence

While AI technologies are becoming integral to drafting health and safety plans and designing construction components, underwriting these advanced tools remains a challenge. Matt Didlick, Vice President and Professional Indemnity Leader at Marsh, noted that “AI is going to become a really tricky risk to underwrite because it’s so fast moving, almost similar to the cyber market when that first started emerging.” The potential for significant claims looms large as AI continues to evolve.

Maximizing Efficiency with Drones

Outside of AI, the use of drones in construction is gaining traction for tasks such as surveying—a process that once required extensive scaffolding. While TechTalk Live attendees unanimously agreed that drones bring “massive efficiencies,” they also raised concerns about potential risks stemming from a lack of regulation.

Ben Fielding, Director at Graphene Insurance Brokers, highlighted the issue of untrained personnel operating drones on sites. “It’s almost like people are going to play with them in the backyard and then using them on-site without any training,” he cautioned, illustrating the potential hazards associated with drone operations.

Liability Concerns in Drone Usage

The complexity of liability becomes evident as various contractors and subcontractors engage in projects. Didlick pointed out that if a contractor seeks expertise from a drone specialist—and the resulting information is flawed—the ultimate client shouldn’t bear the blame. This complicates insurance claims, particularly when the liability is murky.

The same questions of liability arise in collaborative tools like Building Information Modeling (BIM), which integrates the efforts of different parties into a unified construction plan. Cargill noted that while traditional methods still dominate many practices, the emergence of BIM specialists has introduced new tech risks, asking, “Is it the BIM consultant’s role to spot issues, or is that the designer’s?”

Understanding Long Tail Risks

Navigating the complexities of the construction insurance market is further complicated by the long-tail nature of potential claims. By regulation, contractors must maintain comprehensive insurance coverage long after the completion of a contract, which means claims can take years to surface.

Cargill identified this long tail as an ongoing challenge for insurers managing construction portfolios. Moreover, as technology becomes integrated into construction, adjusting to these new realities is essential. John Jones, Managing Director of Champion Professional Risks, shared a provocative scenario: “What if the design for the bathroom has an inherent issue and you’ve printed hundreds for a client? That would be quite an expensive thing to rectify for a simple tech issue.”

Conclusion

The construction industry is undergoing a technological transformation that offers substantial efficiencies but also presents new challenges, particularly in terms of insurance and risk management. As the sector embraces innovative tools and practices, insurers must recalibrate their approaches to underwrite these emerging risks effectively. The ongoing dialogue in forums like TechTalk Live is vital for industry stakeholders to remain informed and prepared as they navigate this evolving landscape.

SEO Focus Keywords

• Construction technology risks
• Insurance in construction sector
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H2 and H3 Titles

• H2: The Rise of Digital Tools in Construction
• H3: The Impact of Artificial Intelligence
• H3: Maximizing Efficiency with Drones
• H3: Liability Concerns in Drone Usage
• H2: Understanding Long Tail Risks

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