Construction defect liability is emerging as one of the more significant loss drivers in commercial general liability for 2026.
A combination of factors is converging: high construction volumes from recent years are now reaching the age where defects manifest; labor shortages drove the use of less experienced subcontractors in some markets; and materials supply chain issues in 2022 through 2024 led to substitutions that are now being questioned in defect litigation.
The legal environment matters enormously here. States with longer statutes of repose and plaintiff-favorable construction defect laws are seeing more claims activity than those with tighter statutory frameworks. Underwriters building construction-heavy portfolios need jurisdiction-specific loss data to price accurately.
Carriers with strong construction expertise -- not just general GL underwriting -- are handling these risks more confidently and pricing more adequately than those treating construction as a commodity risk.
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