{"id":905510,"date":"2026-03-31T15:54:41","date_gmt":"2026-03-31T21:54:41","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=905510"},"modified":"2026-03-31T15:54:45","modified_gmt":"2026-03-31T21:54:45","slug":"construction-risk-in-era-of-mega-project","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-risk-in-era-of-mega-project\/","title":{"rendered":"Managing Construction Risk in the Era of the Mega-Project"},"content":{"rendered":"\n

Risk & Insurance<\/a><\/p>\n\n\n\n

From data centers to LNG plants, today’s mega construction projects require sophisticated approaches to risk mitigation and transfer that bring together underwriting expertise and claims insight from the earliest stages.<\/p>\n\n\n\n

The scale of construction projects across North America has reached unprecedented levels. Data centers that once felt massive at $1.5 to $2 billion are now eclipsed by $30 billion mega projects, while industry professionals casually label $12 to $15 billion builds as \u201cmini-megas\u201d. Alongside this data center boom, the surge in energy infrastructure \u2014 from liquefied natural gas facilities to next-generation nuclear plants to expansive renewable energy installations \u2014 is pushing construction volume and complexity to new heights.<\/p>\n\n\n\n

For risk professionals and insurance carriers, these projects present a unique combination of familiar construction hazards and emerging exposures that demand a fresh approach to underwriting, risk control and claims management.<\/p>\n\n\n\n

\u201cWe\u2019re seeing a significant increase in the volume of construction projects across multiple sectors,\u201d said Jean Kim, Vice President, Excess Casualty Retail, Construction Practice Leader and Central Region Manager at Sompo. \u201cData centers are prominent, but there has also been an increase in the energy source supplying these data center campuses: LNG plants, nuclear plants, and renewable energy.\u201d<\/p>\n\n\n\n

Beyond energy and data infrastructure, the construction landscape is being reshaped by major transportation initiatives \u2014 rail expansions, roadways modernization, bridge replacements \u2014 as well as advanced manufacturing facilities such as semiconductor plants and EV battery factories. Large distribution centers for major retailers add yet another layer to the surge.<\/p>\n\n\n\n

What ties these diverse projects together is not just their size, but their integrated complexity. Developers are no longer approaching work as isolated initiatives. Instead, they are combining multiple projects into single, massive undertakings.<\/p>\n\n\n\n

\u201cA lot of times when you\u2019re building, the projects just keep getting bigger and more complex \u2014 there\u2019s just more to them,\u201d Kim said. \u201cInstead of tackling one project at a time, they\u2019re combining several together. It\u2019s like we were going to fix three miles but now let\u2019s do 12 and include the overpasses, bridges, and everything else while we\u2019re at it.\u201d<\/p>\n\n\n\n

This shift from standalone projects to multi-layered, multi-year mega programs is redefining the risk environment. And it\u2019s only the beginning.<\/p>\n\n\n\n

Complex Exposures Emerge from Scale and Speed<\/h4>\n\n\n\n

The risks surrounding today\u2019s mega projects extend well beyond the traditional construction hazards the industry is accustomed to managing. Skilled labor shortages and supply chain challenges remain persistent concerns, but the convergence of construction with advanced technology infrastructure has introduced entirely new categories of exposure that many stakeholders are still learning to navigate.<\/p>\n\n\n\n

Steve Lokus, Head of Construction Claims at Sompo, has witnessed firsthand how data center projects can generate claims scenarios that would have been unthinkable a decade ago.<\/p>\n\n\n\n

\u201cOne of the areas I\u2019ve been directly involved with is the intersection of construction risk and intellectual property claims, situations where warehouses are storing proprietary software, data, and similar assets,\u201d Lokus said. \u201cIn one past claim, we were the construction insurer, and the allegation was that the developer\/general contractor\/owner had essentially stolen an entities trade secrets, posted them online, and attempted to profit from them.\u201d<\/p>\n\n\n\n

Geography adds another layer of complexity. Many data centers are being built in rural areas that straddle multiple state lines, creating jurisdictional challenges when incidents occur.<\/p>\n\n\n\n

\u201cYou may have a data center in Louisiana, but everybody\u2019s being housed in Mississippi or a surrounding state,\u201d Lokus said. \u201cKnowing case law and choice of law becomes critical because if a worker is injured while on the job site or driving home from the job site, it may cross various state lines.\u201d<\/p>\n\n\n\n

The growing use of modular construction, especially prevalent in data center development, further complicates the claims landscape. When components are manufactured off-site and transported for installation, determining where responsibility lies for defects<\/a> becomes significantly more difficult.<\/p>\n\n\n\n

\u201cYou\u2019ve got the added complication of figuring out whether it\u2019s a product defect, a transportation issue, a construction claim or an installation claim,\u201d Lokus said. \u201cWhen a property damage occurs, determining where the responsibility actually lies can get pretty complicated.\u201d<\/p>\n\n\n\n

The pressure to bring projects online quickly compounds these risks. For data center developers, speed to market is a critical competitive factor, but that urgency creates inherent construction hazards.<\/p>\n\n\n\n

\u201cNow we\u2019re taking what used to be just a warehouse \u2014 a wall, a roof, a floor, maybe some basic support structures \u2014 and loading it with millions of dollars\u2019 worth of equipment and water,\u201d Lokus said. \u201cThat\u2019s just an inherently risky combination.\u201d<\/p>\n\n\n\n

Weather-related risks also loom large, particularly in southern states where hurricane patterns have become increasingly unpredictable.<\/p>\n\n\n\n

\u201cThe hurricanes are pushing farther inland now ,\u201d Lokus said. \u201cBeing at the forefront \u2014 using technology to track weather patterns and understand construction-related risks \u2014 is something we focus on and do every day.\u201d<\/p>\n\n\n\n

Technology and Collaboration Drive Effective Risk Mitigation<\/h4>\n\n\n\n

Managing risk on projects of this magnitude requires construction firms to amplify traditional safety practices while embracing a new generation of technologies. Wearable devices, AI-powered monitoring systems, and sophisticated identification protocols are becoming standard tools across major job sites.<\/p>\n\n\n\n

\u201cThere\u2019s always going to be a plan, but this is where a lot of the new tech really comes into play \u2014 the wearables, the Internet of Things, the smart vests, the cameras,\u201d Kim said. \u201cThose tools are only going to become more and more central.\u201d<\/p>\n\n\n\n

These technologies are helping bridge the skilled labor gap by enabling better oversight of workers with varying experience levels. Visual identification systems \u2014 such as colored-coded vests for experienced workers versus those new to a job site \u2014 enable supervisors to allocate resources appropriately and monitor less experienced personnel more closely.<\/p>\n\n\n\n

AI-driven monitoring capabilities have also evolved significantly beyond drone-based surveillance, which dominated safety discussions five years ago.<\/p>\n\n\n\n

\u201cNow there\u2019s just so much more AI-driven monitoring that can actually help,\u201d Kim said. \u201cWe can now track the workers\u2019 health in real time \u2014 are they fatigued, do they need more water \u2014 and that matters when they\u2019re climbing ladders and operating heavy equipment.\u201d<\/p>\n\n\n\n

Camera systems now deliver real-time data to safety managers across sprawling job sites, enabling rapid response to emerging hazards.<\/p>\n\n\n\n

The contractors securing these mega projects tend to be highly sophisticated organizations with robust risk management infrastructure already in place.<\/p>\n\n\n\n

\u201cMany of the GCs on these projects are the larger firms,\u201d Lokus said. \u201cThey have on-site facilities, so if somebody does get injured, there\u2019s a nurse or similar support on-site. There are a number of preventative measures in place to help keep the job running smoothly.\u201d<\/p>\n\n\n\n

These large general contractors also exercise significant care in vetting and selecting subcontractors, often bringing in specialized teams from other regions with proven experience with similar projects.<\/p>\n\n\n\n

A Collaborative Approach to Underwriting and Claims<\/h4>\n\n\n\n

As a carrier with deep expertise in construction risk, Sompo has developed a distinctive approach that integrates claims insights into the underwriting process from the earliest stages \u2014 a practice that proves particularly valuable on complex mega projects. Rather than treating underwriting and claims as separate functions, Sompo brings these disciplines together for a unified view of project exposures.<\/p>\n\n\n\n

\u201cWe\u2019re all learning. It\u2019s called a data center boom because it\u2019s just happening so fast,\u201d Kim said. \u201cSo yes, we\u2019re learning as we go, but we\u2019re also working to keep a full 360-degree view, consulting with Steve on claims and collaborating with our risk-control specialists.\u201d<\/p>\n\n\n\n

This integrated model brings underwriting, claims, and risk control into a single conversation, allowing for a comprehensive evaluation of a project\u2019s risk. When evaluating a specific opportunity, the team looks beyond construction techniques to consider jurisdictional nuances, community sentiment, and environmental factors that could shape or influence future claims outcomes.<\/p>\n\n\n\n

\u201cRecently, our underwriting group reached out regarding a mega-project evaluation noting, \u2018Hey, we\u2019re interested in learning more about this specific jurisdiction and what potential problems we may have,’\u201d Lokus said. \u201cI was able to bring in defense counsel, coverage counsel, and a risk manager who specialize in that area. In a very short time, we were able to answer two key questions: A, if so, do we want to write it given the venue and B, where do we want to be in the tower of coverage?\u201d<\/p>\n\n\n\n

There is a claims team at Sompo dedicated exclusively to construction, with specialists focused on bodily injury, construction defect, and third-party property damage. This depth of specialization not only strengthens underwriting decisions but also ensures more effective claims handling when incidents occur.<\/p>\n\n\n\n

\u201cIt\u2019s refreshing to see claims have a real seat at the table,\u201d Lokus said. \u201cThat alignment between risk management, underwriting, and claims is critical on projects of this scale to ensure everyone is on the same page and fully understands the risks.\u201d<\/p>\n\n\n\n

Looking ahead, as data centers continue to proliferate and energy infrastructure investment accelerates, the construction industry will increasingly rely on insurance partners who understand both the familiar, traditional construction hazards and the emerging exposures these projects present.<\/p>\n\n\n\n

For risk managers navigating billion-dollar construction programs, working with carriers that bring together technical underwriting knowledge with practical claims and risk control experience provides a critical foundation for managing uncertainty in an era of unprecedented project scale.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 801.641.8304, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Risk & Insurance From data centers to LNG plants, today’s mega construction projects require sophisticated approaches to risk mitigation and transfer that bring together underwriting expertise and claims insight from the earliest stages. The scale of construction projects across North America has reached unprecedented levels. Data centers that once felt massive at $1.5 to $2… Continue reading Managing Construction Risk in the Era of the Mega-Project<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4],"tags":[9895,22,11097],"class_list":["post-905510","post","type-post","status-publish","format-standard","hentry","category-construction-defects","tag-advise-consult","tag-insurance","tag-managing-construction-risk","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nManaging Construction Risk in the Era of the Mega-Project - 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