Public Works Projects Face a Challenging Casualty Insurance Market

As the U.S. embarks on a nationwide infrastructure upgrade, a challenging casualty insurance market may make for a bumpy road. Millions of miles of roads as well as thousands of bridges and dams need repair across the country. A massive federal program aimed at addressing those needs is getting underway even as contractors face shortages of skilled labor and tight material supplies following the pandemic-related supply chain logjams. Social inflation is also generating other roadblocks as liability verdicts soar into the tens of millions of dollars. In the current legal environment, insurers have been pulling back on casualty coverage for public works projects, particularly those involving streets and roads, to limit their own exposure. As placements become more complex, experienced wholesale brokers with strong market relationships can be an invaluable ally for meeting insureds’ casualty insurance needs.


Around 43% of America’s 4 million miles of public roadways are in poor or mediocre condition, according to the American Society of Civil Engineers. Source 1


The danger of America’s failing infrastructure was highlighted in 2021 when the heavily trafficked Interstate 40 bridge spanning the Mississippi River in Memphis, Tennessee was abruptly closed for roughly three months due to a cracked beam.2 According to the White House, 20% of the nation’s highways and major roads and 45,000 bridges are in poor condition across the country.3 America’s 2021 federal infrastructure bill allocates $110 billion to help repair highways, bridges and other infrastructure, $65 billion to improve access to highspeed internet, and $55 billion for clean water projects. The federal infrastructure program is intended to work alongside the more than $200 billion that state and local governments already spend on highways and roads annually.4

However, road construction is a risky business given the interaction with vehicle and pedestrian traffic. According to the Federal Highway Safety Administration, an average of 794 people were killed annually in work zone motor vehicle crashes from 2015 to 2020.5 Tragically, an average of 123 workers died each year due to road construction site injuries from 2003 to 2020. For insurers, the risks include an often-adverse legal climate as the severity of claims related to deaths and injuries has intensified sharply. In 2021, the median jury award for vehicle injury lawsuits was $40 million.6 Big auto verdicts may exceed $100 million, and one notable Texas award soared past $1 billion. Skyrocketing verdicts are due in part to social inflation, which creates a cycle of larger judgments over time. It’s estimated that social inflation has increased commercial auto liability payouts by more than $30 billion between 2012 and 2021.7 In addition, third-party litigation funding, where investors provide money in exchange for a share in the settlement, is another driver of protracted, expensive litigation.8


Public infrastructure projects range from street and road projects to water main repairs, public utilities, dam maintenance, and broadband telecommunications upgrades. Insurers may look more favorably on water, utility, and wastewater plants or other renovations without third-party exposure. For telecommunication projects, wildfire poses a growing concern, particularly in fire-prone western states. Other projects requiring more thoughtful consideration include building telecommunications projects in urban areas or upgrading existing technology on high-rise buildings.

Road work is more difficult to insure because of potentially deadly accidents involving pedestrians, bicyclists, and motorists. In some states, personal injury lawyers are particularly aggressive in seeking plaintiffs as payouts rise. A significant risk revolves around the placement or absence of warning signs, which is a frequent issue in lawsuits. Exposures may also be exacerbated by competition for skilled labor across the construction industry as contractors may take on less-skilled workers or drivers to meet demand. Higher material costs due to supply chain problems and inflation can also pressure contractors to hire less skilled workers to help rein in overall expenses.

For street, road, and other public works projects, contractors may also need to consider environmental exposures, which fall under a separate area of coverage. Pollution coverage is often mandated on government contracts, making it a smart move for agents and insureds to partner with brokers that have strong expertise in that area as well to avoid purchasing inadequate insurance coverage.

42% of U.S. bridges are at least 50 years old and nearly 231,000 bridges need repair and preservation work, according to the ASCE. Source 9


Because of the potential for severe claims, insurance markets for public works projects are not as plentiful as those for typical commercial construction, particularly in the lead or primary positions. Carriers that have previously been willing to write $15 million or $25 million lead policies have been scaling back, making it difficult to place the first tranche of lead coverage. On street and road work, several standard markets have reduced the capacity they’re willing to allocate to any one project, mindful that a big award could quickly exhaust policy limits.

From a pricing standpoint, rates reflect the potential for high severity claims and are typically much higher than for a commercial project of similar value. Still, projects are not seeing rate increases as high as they were only a couple of years ago. However, insurers are evaluating each project on its own merits, and each risk must stand on its own.


Insureds and their brokers should make it a point to assess potential carriers for both financial stability and the quality of their claims handling capabilities and policies. Because extensions may often be needed, insureds should also look for markets that are likely to remain active as projects near completion. Public works projects typically have a long statute of repose, and a decade could pass before a claim comes in. While some markets may offer lower rates, it is often a better choice to work with higher-rated carriers with longer histories and strong claims handling teams. Admitted policies may be a plus as municipalities often require admitted insurance.

Given the carrier focus on reining in exposures, better data can help submissions stand out. Underwriters are seeking more detailed information, including data around fleet maintenance programs and safety programs, driver controls, and loss controls. Indemnity agreements and contracts may also come under special scrutiny, which can pose challenges for subcontractors that need to understand how much exposure they can realistically take on without jeopardizing their own business.

1 in 6 of the nation’s more than 91,000 dams have high hazard potential, meaning that a failure could cause loss of human life and extensive property damage. Source 10


The federal infrastructure program represents a huge opportunity for contractors as tens of billions of dollars are slated for investment in streets, roads, water, broadband and other projects across the U.S. However, public works liability coverage is often complex as larger projects may be structured as joint ventures, or the coverage may be placed in a wrap, an owner- or contractor-controlled insurance program, depending on the sophistication of the municipality. Given the inherent intricacies of the coverage, it’s crucial to work with wholesale brokers that understand the construction business, have a deep knowledge of the general and excess liability markets for public works projects, and maintain strong relationships with insurance markets. Reach out to your local CRC Group producer today to learn how we can help put your insured on the road to success in public works construction.


  • Jeffrey Dunn is a Senior Vice President and Senior Casualty Broker with CRC Group’s Norcross, Georgia office.
  • Josh Levy is a Casualty Broker with CRC Group’s Redondo Beach, California office.
  • Ryan Nadler is a Casualty Broker with CRC Group’s Norcross, Georgia office.


  1. 2021 Report Card for America’s Infrastructure, American Society of Civil Engineers, See
  2. Reopening finishes early for I-40 bridge, Northwest Arkansas Democrat & Gazette, Aug. 3, 2021. See:
  3. Fact Sheet: The Bipartisan Infrastructure Deal, The White House, Nov. 6, 2021. See
  4. State and local Backgrounders, the Urban Institute. See:
  5. Highway Work Zone Safety, National Institute for Occupational Safety and Health, Aug. 29, 2022. See:
  6. Social Inflation and Loss Development – An Update, Jim Lynch, Dave Moore, Casualty Actuarial Society, See:
  7. Social Inflation and Loss Development – An Update, Jim Lynch, Dave Moore, Casualty Actuarial Society, See: files/docs/pdf/cas_social_inflation_03062023.pdf
  8. Social Inflation, hard to measure, important to understand, Insurance Information Institute, July 17, 2022. See: social-inflation-hard-to-measure-important-to-understand
  9. 2021 Report Card for America’s Infrastructure, American Society of Civil Engineers, See:
  10. 2021 Report Card for America’s Infrastructure, American Society of Civil Engineers, See