Australia’s construction sector accounted for 27% of all company insolvencies nationally in 2023-24 – the highest of any industry – with 2,975 construction firms entering external administration, according to the Australian Securities and Investments Commission’s (ASIC) annual insolvency data. For brokers placing construction risks, those figures are not background noise. They shape how underwriters assess contractor quality, how claims experience feeds into pricing, and why some carriers have narrowed their appetite even as headline premiums soften.
It is into that environment that Scope Underwriting has expanded its Contractors All Risk (CAR) facility, widening options for brokers placing both annual and project-specific construction risks. The Melbourne-based MGA, backed by the Rhodian Group and underwritten by Lloyd’s, said the expansion builds on its existing CAR proposition and complements its suite of Third Party Liability, Professional Indemnity, and Contractors Pollution Liability (CPL) coverage.
The Australian construction insurance market is not short of capacity at the top end. Allianz, QBE, Zurich, Liberty Specialty Markets, HDI Global, and Chubb provide the bulk of capacity for annual programmes and project-specific placements, with Lloyd’s syndicates active on large or complex risks.
Appetite narrows in the mid-market, though. Marsh notes that while overall capacity has remained steady, underwriters’ willingness to participate varies by contractor size and project risk profile – and that risk engineers are being deployed more frequently on complex or high-value projects, extending placement timelines.
MGAs have been moving into that space. ARTes Specialty, a London-based MGA operating in Australia through wholesale provider Mobius Insurance, has launched three specialist construction products in under two years – most recently an integrated crane and rigging policy offering material damage up to $15 million and liability limits to $20 million, targeting plant and equipment risks that mainstream insurers have historically found difficult to underwrite.
Scope’s expanded facility targets adjacent territory: mid-to-larger commercial construction contractors across a broad range of project types, from home builders and civil contractors through to institutional builders and principally controlled projects.
Co-CEO Nick Vernon has been direct about what his firm is addressing. In a February 2025 interview published by Rhodian, he described a split between insurers routing brokers through automated platforms and those reserving appetite exclusively for large programs placed by major international brokers. “A lot of brokers are calling out for assistance and advice with a class of insurance that is quite specialised and in many cases too complex to simply enter into a system,” Vernon said.
Unlike the standard appetite grids used by larger carriers, Scope assesses submissions case by case. Underwriters work with brokers to evaluate the risk and the client's approach to risk retention from the outset. “What’s of note is that our products can be tailored and be dialled up or down depending on the needs of the insured,” Vernon said.
Coverage is based on DE4 wording as standard and aligns with Australian Standard Contracts. Optional extensions include inflation protection for cost increases driven by insured damage delays, run-off contracts for multi-stage builds, and plant hire charges for equipment-heavy projects. Both lead and follow capacity are available across annual and single project placements.
Insurance Business Australia was unable to obtain a comment from Scope Underwriting specifically addressing what the expanded facility adds beyond its existing CAR proposition.
The sector’s insolvency rate has direct implications for how underwriters approach CAR placements. A contractor that fails mid-project leaves incomplete work, disputed subcontractor obligations, and potential claims against the policy.
Marsh noted that despite softer pricing, insurers maintained rigorous underwriting standards in 2025. Claims inflation has added friction, with disputes over reinstatement costs delaying settlements and greater involvement from insurer-appointed legal firms slowing the process. Submission quality is increasingly the factor that determines outcomes – regardless of where the broader market sits on pricing.
Co-CEO Rob Higginson, speaking on market conditions at the time of Scope’s launch, noted that liability lines face additional pressure. “The profitability of Australian construction liability remains a challenge, meaning the market may not soften as quickly as other lines,” he said.
The scale of upcoming construction activity sharpens the capacity question. ANZ Research has forecast Australia’s major project pipeline to peak at $80.3 billion in the 2026 financial year, with Queensland’s electricity and hospital spending accounting for more than a third of the projected increase over the next five years.
Infrastructure Australia’s 2025 Infrastructure Market Capacity Report put the total construction pipeline – public and private – at $1.14 trillion across the five years to 2028-29. Peak workforce demand is forecast to climb from 417,000 to 521,000 workers by mid-2027, driven largely by privately funded renewable energy projects.
More projects mean more placements, more complex contractor structures requiring coverage, and – given the insolvency data – more underwriting scrutiny on contractor quality and capitalisation.
Scope’s suite also includes CPL, a line that sits outside most standard CAR and public liability policies. According to Carter Newell Lawyers, CPL is “a sometimes overlooked component of risk management for contractors” – particularly on civil works projects where site contamination exposure is present. Standard policies typically exclude gradual pollution events, leaving an exposure that standalone CPL cover addresses directly.
