Marsh, the world’s leading insurance broker and risk advisor, has released its Global Construction Risk Review 2025, revealing the most pressing challenges faced in the global construction industry. The Indian construction industry is expected to grow by 7.1% in 2025, one of the fastest rates in the IMEA region. Major risks include inflation, economic ups and downs, rising material costs, bidding and contract problems, and workforce challenges. To handle these risks, the report suggests using real-time risk checks, adjusting bids for inflation, and using predictive tools to plan projects better. India’s insurance sector is changing rapidly to keep up with the construction boom, and adopting global best practices in contract structuring, supplier evaluation, and risk transfer mechanisms can significantly boost risk management outcomes.
Introduction: India’s Expanding Construction Landscape
India’s construction sector is experiencing unprecedented growth, driven by large-scale infrastructure projects, urbanization, and real estate demand. According to Marsh, a global leader in insurance broking and risk management, this rapid expansion has created a pressing need for advanced risk mitigation strategies. From mega expressways to smart cities, the complexities of modern construction require more than just physical resources—they demand strong financial protection. (infrastructure)
The Rise of Construction-Related Risks
As construction projects grow in size and sophistication, so do the risks. Delays, cost overruns, accidents, supply chain disruptions, environmental liabilities, and regulatory non-compliance are just a few challenges developers face. Marsh highlights that these risks can severely impact project viability and investor confidence if not addressed with a comprehensive risk framework. (Project)
Marsh’s Call for Comprehensive Risk Management
In its latest insights, Marsh India emphasizes the importance of deploying structured risk management tools tailored to the Indian context. This includes:
- Risk Identification and Assessment: Understanding both macro and micro risks early in the project lifecycle.
- Contractual Risk Transfer: Structuring EPC contracts with balanced liability clauses.
- Operational Risk Controls: Implementing safety protocols, quality audits, and incident reporting systems.
Such frameworks are critical not only for project developers but also for financiers, regulatory bodies, and insurance providers.
Insurance: A Strategic Tool, Not Just a Requirement
Traditionally seen as a compliance formality, Marsh argues that insurance should be treated as a strategic project enabler. Construction insurance can cover everything from material damage and third-party liabilities to project delays and political risks. Products such as Contractors’ All Risk (CAR), Erection All Risk (EAR), and Delay in Start-Up (DSU) are becoming essential in large-scale projects. Marsh is working closely with stakeholders to create custom insurance packages that reflect modern construction realities.
Public-Private Partnerships and Insurance Innovation
With growing public-private partnerships (PPPs) in highways, metro rail, and renewable energy sectors, Marsh notes the rising demand for tailor-made insurance solutions. For example, multi-phase infrastructure projects require coverage that evolves over the lifecycle—from land acquisition to operational handover.
Conclusion: Preparing for a Resilient Construction Future
Marsh’s assessment is clear—India’s construction boom cannot be sustained without proactive risk planning and innovative insurance solutions. As the country builds the future, stakeholders must ensure that every project is backed by intelligent risk strategy, reducing financial uncertainties and safeguarding timelines.
Q1. Why is risk management important in India’s construction sector?
Due to increasing project scale and complexity, risk management helps avoid delays, cost overruns, and legal liabilities.
Q2. What types of risks are common in construction projects?
Common risks include site accidents, delays, environmental hazards, regulatory issues, and material cost fluctuations.
Q3. What role does Marsh play in this space?
Marsh provides risk advisory and customized insurance solutions for construction companies to mitigate financial and operational risks.
Q4. Which insurance products are relevant for construction?
Key insurance types include Contractors’ All Risk (CAR), Erection All Risk (EAR), and Delay in Start-Up (DSU) coverage.
Q5. How does insurance support Public-Private Partnership (PPP) projects?
Insurance helps PPP projects manage long-term risks, protect investments, and ensure smooth execution across project phases.
