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Are Your Construction Risks Getting Declined? Here's Why — and What Brokers Can Do

If you’ve been placing construction risks for more than a year, you’ll have noticed a shift. Risks that would have passed through markets with minimal friction eighteen months ago are coming back with questions, conditions, or outright declines. Sometimes the submission goes in and the response doesn’t come back at all.

This isn’t bad luck. It’s the result of a structural tightening in how construction underwriters assess risk. Understanding the mechanics behind declines isn’t just useful background knowledge — it’s a core broker competency in 2026.

This article sets out exactly why insurers are saying no to more construction risks, what the most common triggers are, and what brokers can do to improve acceptance rates — including when it makes sense to step outside the standard market entirely.

Why Insurers Are Declining More Construction Risks in 2026

The UK construction insurance market has been through a sustained period of reassessment. Following significant claims activity — driven by fire, structural failure, and contractor insolvency — insurers have systematically revisited their appetite across the sector. Several dynamics are now combining to make declines more likely than they were even two years ago.

First, reinsurance costs have risen materially, which passes through directly into insurer selectivity at the primary level. When a reinsurer withdraws capacity or reprices exposure, the primary insurer responds by restricting what they’ll write — not just what they’ll charge.

Second, the Building Safety Act 2022 continues to introduce obligations that can create coverage complexity, particularly around higher-risk buildings and cladding remediation. Insurers who are uncertain about their exposure under evolving regulatory frameworks tend to default to restriction.

Third, contractor insolvency remains elevated. According to Insolvency Service data, the construction sector saw a significant number of contractor failures between 2023 and 2025, and underwriters have updated their scoring accordingly. A contractor with thin margins, high leverage, or a history of payment disputes is a materially different risk today than it was in a softer market.

The Most Common Reasons for Declines

When a construction risk is declined, it’s rarely arbitrary. Underwriters are making a specific decision about the combination of factors in front of them. The most common triggers fall into a handful of categories:

Fire risk and cladding exposure

Any project involving combustible cladding — whether remediation or new installation — will attract intense scrutiny. Residential buildings over 18 metres trigger Building Safety Act obligations and with them a level of coverage complexity that many standard insurers no longer wish to engage with. If your submission doesn’t address fire risk management, compartmentalisation, and cladding specification clearly, expect questions. If the answers aren’t satisfactory, expect a decline.

Contractor financial health

Underwriters now routinely check contractor credit ratings, Companies House filings, and payment history before quoting. A contractor with deteriorating financials — rising debtor days, declining turnover, director changes — presents a different risk profile from one with a clean ledger. If the contractor you’re placing risk for has had a County Court Judgement, a recent insolvency event in related entities, or unaudited accounts, that will register.

Contract type and conditions

Not all construction contracts are equal from an insurance perspective. Design-and-build contracts shift liability in ways that affect coverage scope. JCT and NEC contracts are generally more legible to underwriters than bespoke conditions. If your client is operating under a heavily amended contract, or one that places unusual risk transfer obligations on the contractor, this needs to be surfaced in the submission — not discovered during a claim.

Project complexity and novel methods

Modular construction, mass timber frames, and prefabricated structures all present underwriting challenges simply because claims data is thinner. Insurers operating on historical loss curves don’t have the same confidence in pricing these risks, so they either restrict heavily or decline.

Incomplete or thin submissions

This is the most avoidable cause of declination — and one that specialist brokers can directly address. A submission that’s missing project timescales, contractor CVs, contract value breakdowns, or risk management documentation will generate friction at best and a declination at worst. The quality of what you send is a signal about the quality of the risk.

Underwriter’s perspective:  A submission that’s thorough and transparent tells us the broker understands the risk. A submission that’s thin or evasive tells us to look harder — or not look at all.

Fire, Cladding and Structural Risk: The Red Flags

It’s worth being specific about what fires the most immediate concern in underwriters’ minds, because these are the areas where declinations are happening with the highest frequency.

• Residential projects involving RAAC (reinforced autoclaved aerated concrete) — where structural remediation creates uncertain exposure profiles
• High-rise residential buildings with unresolved EWS1 assessments
• Projects where the fire strategy hasn’t been independently reviewed or where compartmentalisation is dependent on materials with known performance gaps
• Mixed-use developments where the residential and commercial elements create coverage boundary complexity
• Demolition or strip-out of existing structures where unknown contaminants or structural conditions haven’t been surveyed

If your submission involves any of these elements without adequate documentation, the risk of a decline is high. If it involves several, standard market appetite may simply not exist.

How to Improve Acceptance Rates

The brokers who consistently achieve better outcomes in the current market do a specific set of things differently. None of them are complicated, but they require discipline.

Submit complete information from the outset

Underwriters make their initial assessment on what you send them. A complete, well-organised submission with full project details, contractor financials, contract documentation, and risk management information gives the underwriter what they need to make a positive decision. Sending it in fragments forces them to make assumptions — and assumptions in a constrained market tend to be conservative.

Address known issues proactively

If the risk has a complication — a cladding issue, a financially stretched contractor, an unusual contract condition — surface it in your submission before the underwriter finds it. Proactive disclosure builds trust. Discovery during underwriting builds suspicion.

Demonstrate risk management

Document the risk management measures in place: site safety protocols, quality assurance processes, project management governance, contractor vetting procedures. An insured who can demonstrate that they actively manage risk is a fundamentally different proposition from one who treats insurance as a formality.

Know your markets

Standard markets and specialist markets assess risk differently. If a risk has characteristics that standard markets routinely struggle with — complex structure, novel methods, challenging contract terms — going to a standard market first and collecting declinations is not a neutral act. It creates a declination history that complicates subsequent placement. Starting with the right market matters.

How Exance Helps Brokers Place Difficult Construction Risks

Exance is a specialist construction insurance MGA with delegated underwriting authority across a range of construction and surety lines. We operate in exactly the space where standard markets become uncomfortable.

Our underwriters have specific expertise in the risk characteristics that generate declinations elsewhere — cladding remediation, design-and-build liability, contractor financial risk, and complex structural projects. We don’t apply generic market criteria to specialist risks. We assess each submission on its merits.

For brokers placing construction risks, the practical benefit is straightforward: a relationship with Exance means access to capacity that isn’t available through standard channels. If the standard market has said no, or you already know it will, come to us first.

If you have a construction risk that’s been declined or that you expect to face market resistance, speak to our underwriting team directly. We work with brokers to structure submissions effectively and provide capacity where standard markets cannot.