|
|
By Tanya Waters
|
Delivering construction projects in Ireland has become increasingly complex. Planning delays, evolving contract structures, workforce pressures and more volatile weather patterns are reshaping how risk emerges on live sites and across project lifecycles. A more uncertain global backdrop is adding further pressure through supply‑chain disruption and cost volatility. Arachas works closely with contractors, developers and professional teams across Ireland. Through these day-to-day interactions, our Construction Practice, risk advisers and claims specialists are seeing consistent patterns emerge in underwriting discussions, claims outcomes and project delivery challenges.
This article brings together insights from across the Arachas Construction Practice to highlight where construction risk is emerging now and what is making a practical difference in managing exposure, protecting margins and maintaining insurability as projects progress. Many of these pressures are not short-term disruptions. For a growing number of projects, complexity and uncertainty have become a structural feature of delivery rather than an exception.
These pressures are being reinforced by wider regulatory and market developments, including planning reforms introduced under the Planning and Development (Amendment) Act 2025.
1. Workforce Pressure and Site Management
Workforce availability continues to shape how construction projects are staffed and delivered. Planning delays, judicial reviews and procurement complexity are creating stop-start project pipelines, often followed by highly compressed delivery periods once approvals are secured. Rather than steady labour demand, many contractors are facing intense resourcing pressure over short timeframes, consistent with wider industry capacity constraints highlighted by the Construction Industry Federation (CIF).
In response, contractors are increasingly reliant on agency and temporary labour to meet peak requirements and keep programmes moving. This flexibility is often essential, but it also changes how risk presents on site, particularly where teams scale up rapidly or where supervision structures shift during critical phases of work.
“In conversations with construction specialists across our portfolio, there is a clear shift towards greater use of agency labour,” observes Lisa Windle, Account Director at Arachas. “It’s a practical response to skills shortages, but it does mean controls around competency, supervision and induction need to keep pace with how projects are now being staffed.”
It is often the interaction of pressures, rather than any single factor, that creates the greatest risk on site.
“The tightening labour market has led to the use of less experienced operatives on sites, which can be managed in isolation,” notes Colm Bolger, who works closely with construction firms in his role as an Account Director. “However, when combined with supply‑chain pressures and compressed timelines, this can change site behaviour and increase the risk of avoidable incidents and quality issues.”
2. As behaviour on site shifts under pressure, the contractual and insurance implications also become more pronounced.
“When engaging agency labour, it’s important to understand where liability rests under the contract and who is deemed liable if a claim arises,” adds Ryan O’Donohoe, Corporate Account Executive at Arachas. “In many cases, contracts pass liability between parties in ways that can create an uninsured risk or breach policy cover. Having an insurance adviser experienced in construction contracts involved early in reviewing labour arrangements and responsibilities can help ensure clients are not left exposed later on.”
From a risk perspective, increased use of agency and short-term labour heightens the importance of consistent site-specific induction, clarity around supervision and the ability to evidence competency quickly, particularly on busy or changeable sites.
3. Documentation, Supervision and Claims
From a claims standpoint, workforce structure is increasingly visible in how incidents are handled. A higher proportion of liability claims now involve agency workers, many of which raise immediate questions about induction records, task briefings and supervision arrangements.
“Claims tend to move faster and more favourably where onboarding records, competency documentation and supervision arrangements are complete and readily available,” explains Súin Ní Fheorais, Corporate Claims Executive at Arachas. “Gaps in documentation can make claims significantly harder to defend.”
Treating induction, supervision and competency records as part of day-to-day site management, rather than administrative tasks, is central to both risk control and claims defensibility.
4. Safety Culture and Behavioural Risk
Safety governance remains under growing scrutiny from regulators and insurers. Contractors are increasingly expected to demonstrate active safety leadership, supervision checks, toolbox talks and closed loop corrective actions, rather than relying on written procedures alone.
Ryan O’Donohoe notes that firms able to evidence consistent safety governance tend to receive more favourable insurance terms and experience smoother claims handling. In practice, this depends on how effectively risk information is reviewed, documented and presented to the market. "Where we’ve helped companies clearly demonstrate how health and safety as well as behavioural risks are being managed on site, they are generally better positioned during underwriting discussions,” he says, “A clear, comprehensive and positive presentation to underwriters can influence outcomes in terms of cover and pricing.”
Alongside traditional safety risks, claims involving bullying, harassment and assault have become more visible, creating reputational as well as cost exposure. Clear conduct policies, practical supervisor training and well-defined reporting channels are essential components of modern site governance.
5. Weather, Water Damage and Planning Related Risk
Water-related losses have become one of the most frequent and costly sources of construction claims across Irish projects. From the Arachas perspective, this trend has been increasingly visible both during the build phase and following completion. Changing rainfall patterns, more intense storm events and extended periods of site inactivity have materially increased exposure.
Extreme weather events have contributed not only to physical damage, but also to programme disruption and wider commercial consequences. As a result, insurers increasingly view water risk as a core construction exposure rather than an exceptional one.
6. Water Damage as a Standard Project Exposure
This change is clearly reflected in underwriting behaviour. Water exposure is attracting increased scrutiny at placement stage, with insurers seeking greater clarity around how water risk is managed on site and, in some cases, applying higher water damage excesses in response to loss experience. The consistent message from the market is that insurers want to understand how risk controls operate in practice, not simply what is set out in policy wordings.
From Arachas’ experience, contractors who can clearly explain and evidence how water exposure is being assessed and actively managed tend to encounter fewer challenges at placement stage and experience more predictable outcomes when losses occur.
“Where site teams could quickly demonstrate that water protection measures were in place and actively managed, claims tended to progress more smoothly and discussions with insurers were more straightforward,” says Súin Ní Fheorais.
7. Planning Delays, Idle Sites and Programme Disruption
Planning and legal delays add further complexity. Recent legislative changes aimed at extending and safeguarding permissions during judicial review have highlighted the scale of development pipelines affected by planning delay across the market. Idle or partially completed sites remain exposed to water ingress, vandalism and arson, while extended timelines can undermine programme certainty, revenue projections and financing arrangements.
“When a site sits idle, the exposure does not sit idle with it,” notes Ryan O’Donohoe. “Delay in Start Up (DSU) cover has become an increasingly important tool in protecting project viability and helping funders and project owners manage delay risk when programmes are disrupted.”
From Arachas’ experience, the effectiveness of DSU cover is often determined well before any loss occurs. Early consideration allows policy wordings and indemnity triggers to be aligned with a project’s actual financial risk profile, rather than relying on narrow or standard terms that may not respond when delays arise.
John Tuohy, Director of Corporate Practice at Arachas, explains:
“Where DSU cover has been carefully negotiated at placement stage, it can play a decisive role in protecting cash flow and maintaining funder confidence when delays occur. Projects that address delay risk early are far better positioned to manage complex programme disruption.”
In practice, this can provide reassurance to funders and other stakeholders at precisely the point where delays threaten confidence in programme delivery.
Treating weather, water and delay as standard project risks, rather than exceptional events, is increasingly central to achieving sustainable insurance terms and predictable financial outcomes.
8. Contract Alignment, Insurance and Claims Outcomes
Misalignment between contract obligations and insurance cover remains one of the most common sources of difficulty across construction projects. Funder-driven structures and special purpose vehicles often push broad liabilities onto contractors, sometimes beyond what the insurance market will support.
9. Contract Structures and Market Placement Challenges
These challenges are emerging alongside significant contractual change, following the introduction of the RIAI 2025 Construction Contracts after extensive consultation with industry stakeholders. Legal commentary has highlighted the insurance and risk implications of the revised forms.
“One common issue we see, is contracts and lending agreements being finalised before insurance implications are fully considered,” observes Ryan O’Donohoe. “In some cases, placement becomes challenging not because of the contractor’s risk profile, but because specific clauses and funder-driven requirements go beyond standard policy cover and in most circumstances are non-negotiable.”
Arachas frequently works with contractors who approach the market after experiencing difficulty placing cover elsewhere. Early contract review allows non-insurable obligations to be identified and addressed before they restrict market options or delay projects. Access to specialist construction schemes and a broad panel of domestic and international insurers can be critical in resolving complex placements.
In this environment, insurance advice increasingly extends beyond placement, supporting how obligations are negotiated, risks are structured and projects are positioned for delivery under pressure.
10. Claims as Project Critical Events
From a claims perspective, alignment between contracts and insurance directly influences outcomes.
“Commercial construction claims are rarely just insurance events,” says Súin Ní Fheorais. “They’re project‑critical issues involving contracts, cash flow and reputation. Success isn’t just claims paid. It’s timing, quantum and disruption avoided.”
Clear notification pathways, aligned policy structures and early engagement between project teams, brokers and insurers materially influence how claims progress.
11. Owner Controlled Insurance Programmes (OCIPs) and Notification Clarity
OCIP’s can deliver consistency and efficiency on large projects. However, misunderstandings around notification procedures and interaction with contractors’ annual policies continue to delay otherwise straightforward claims.
From Arachas’ experience, OCIPs perform best where claims procedures, notification routes and policy interaction are clearly defined and communicated to all parties at project launch.
Burt Kerins, Corporate Team Leader and Construction Risk Specialist at Arachas, emphasises the value of early alignment:
“Treat the insurance conversation as part of contract negotiation, not a follow-on task. Early engagement avoids non-insurable exposures and supports better outcomes throughout the project lifecycle.”
12. Latent Defects and Long-Term Asset Protection
- Latent or inherent defects insurance is attracting increased attention from developers, funders and purchasers as part of broader construction risk planning. It provides long-term protection for structural issues that may only emerge years after completion and is increasingly viewed as a key element of transaction readiness.
In practice, however, it is still often addressed too late. Many of the most consequential insurance challenges emerge at key transition points, particularly as projects approach completion, sale or refinancing.
John Tuohy explains:
“We recently supported a development where the need for latent defects cover was only identified after completion. While we were able to arrange the necessary assessments and place the cover, it highlighted how much more straightforward it would have been if this had been considered at the outset.”
Buyer and lender expectations have shifted, with latent defects insurance now frequently seen as a standard requirement on larger or more complex developments. When raised late, securing cover can involve retrospective inspections, incomplete documentation and reduced market appetite.
Burt Kerins adds:
“Latent defects is one of the most common gaps we identify. Picked up late, it can complicate sales or financing. Addressed early, it protects the developer and gives funders and purchasers the certainty they now expect.”
Early engagement allows inspection regimes, design review and build quality controls to align with insurer requirements from the outset, reducing uncertainty later in the asset lifecycle.
13. Regulatory Readiness and Long-Term Protection
Expectations around governance, competency and documentation continue to strengthen across the construction sector. Construction Industry Register Ireland (CIRI) will formalise standards insurers already consider during underwriting and claims assessment, particularly around competency records, clarity of responsibility and scope alignment.
“From a risk perspective, CIRI reinforces practices insurers have long expected,” says Lisa Windle. “Clear records, defined responsibilities and evidence that the right people are doing the right work.”
Surety arrangements and Directors and Officers exposures also merit careful review, particularly where step-in rights or liquidated damages are strict. Directors may also face regulatory exposure following health and safety incidents, even where no property damage occurs.
14. What This Means for Construction Risk Management
Across all areas of construction risk, the same themes keep coming up in our conversations with colleagues across the Arachas Construction Practice. Projects tend to perform better where risks are addressed early, responsibilities are clearly set out, and contracts, insurance arrangements and site practices are properly aligned from the start. What comes through very clearly is that proactive risk management is no longer something that can be treated as a secondary consideration. It plays a central role in whether projects are able to absorb disruption when it arises or whether small issues escalate into delays, disputes or cost pressure.
For contractors, developers and project teams, the message is a practical one. Early engagement, clear decision‑making and disciplined management of risk increasingly shape programme certainty, funding confidence and ultimately, whether a project is delivered as intended. In an environment where uncertainty is no longer exceptional, informed and proactive risk management increasingly enables projects to absorb disruption and move forward with confidence.
Arachas Corporate Brokers Limited trading as Arachas is regulated by the Central Bank of Ireland. Registered in Ireland No. 379157.