Although Marsh's US Insurance Market Report 2010 doesn't anticipate a big jump in construction activity domestically, the global picture may be a little brighter as some industry sectors begin to recover from the worldwide economic downturn. Either way, Marsh says in its report, construction firms are faced with a variety of concerns that lead them to take a fresh look at their approach to risk management.

The wave of distressed properties, and its implications for builders that may or may not get called upon to finish stalled projects, is one such concern. "As a result of the economic downturn, the construction and real estate sectors have become all too familiar with the term 'distressed properties,'" the report states. "Projects often receive this label after construction stalls, key project stakeholders default or enter bankruptcy, or lenders foreclose. Distressed properties can present an opportunity for a prospective buyer that can assess the true cost of taking over the property and measure it against potential future gains. With appropriate due diligence, and a properly structured insurance program that covers existing and future liabilities, stalled projects can be completed and converted into profitable ventures."

Other issues confronting construction firms include green building, subcontractor default, joint ventures with other companies and liability due to defective work by a subcontractor, according to the Marsh report. "As they seek to maximize profits, construction firms are looking for comprehensive, cost-effective and flexible risk management solutions," Reagan says in a release.