Five years ago this week, Champlain Towers South fell in the pre-dawn darkness of a South Florida Tuesday, killing 98 people in seconds and triggering the third-deadliest non-deliberate structural failure in U.S. history, behind the 1981 Hyatt Regency walkway collapse in Kansas City and the 1866 Pemberton Mill collapse in Massachusetts. The $1.02 billion insurance settlement that followed — paid by the carriers of 31 defendants, from engineering firms to a neighbouring developer's security contractor — rewrote how the industry thinks about construction risk in Florida. Today, on that same Surfside beachfront, a new chapter is unfolding that may prove equally instructive.
Damac Properties, the Dubai developer that paid $120 million for the 1.8-acre site in a 2022 court-ordered auction, has not sold a single unit of its planned 37-residence tower, The Delmore. More consequentially for this readership, the project has been halted since February — not because of grief, litigation, or planning disputes, but because Damac cannot secure the construction cover it needs to proceed.
The Wall Street Journal reported this week that insurance brokers familiar with the matter attributed the impasse to two structural weaknesses: the developer's lack of experience in South Florida, and the absence of a local development partner — precisely the kind of partner that opens doors with domestic carriers and Lloyd's syndicates writing U.S. construction placements.
"We should have spent a bit more time on due diligence on community reaction rather than on the physical property itself. We went through what I would call the traditional due diligence. Maybe we should have gone through emotional due diligence as well." — Jeffery Rossely, SVP of Development, Damac International, speaking to NPR, June 2026
The Damac situation illustrates a broader truth about the Florida construction insurance market in 2026. According to Lockton's most recent Construction & Design Market Update, reported by Insurance Business in February, conditions for builders are broadly improving — but residential for-sale properties, including condominiums, remain a restricted class. Rates for these run two to five times higher than for comparable commercial risks, excess casualty capacity over residential exposures is tightening, and underwriters are placing increasing weight on a developer's loss history and local track record.
“"With social inflation and nuclear and thermonuclear verdicts, litigation funding, all the above, we're still seeing severity continue to challenge the marketplace,” Shanna Sweeney, SVP Excess Casualty at Upland Specialty told Insurance Business .
For a Gulf developer attempting its first U.S. project on the site of one of America's most scrutinised structural failures, the underwriting conversation was always going to be difficult. The absence of an experienced domestic joint-venture partner — one with established carrier relationships and a verifiable loss history in South Florida — appears to have made it close to impossible. Rossely acknowledged as much to The Real Deal in April 2026, confirming no contracts had been signed and that the developer was in active talks with potential joint-venture partners. He also admitted the January 2025 sales launch was premature: the sales gallery was not yet complete, and the market did not move as expected following the presidential inauguration.
A potential deal — involving contracts issued to a buyer for more than $200 million worth of units — fell apart after Damac's legal team could not verify the source of the buyer's funds and advised against proceeding. By the time that decision was made in February 2026, Damac had missed another sales season.
The broader significance of the Surfside anniversary for the industry lies not in Damac's struggles alone, but in the systemic changes the collapse set in motion. The event also took on fresh urgency on Monday, when NIST released its long-awaited technical findings. Federal investigators concluded that the collapse began several weeks before June 24, 2021, when two connections between garage columns and the pool deck started to fail. The original structure, investigators found, had been built to less than half the code-required strength in some locations — a deficiency present from the day the building opened in 1981. NIST's full written report, including code and practice recommendations, is still being drafted.
From an insurance standpoint, the collapse exposed a problem that predated the structural one: a judge ruled within weeks of the disaster that the condo association's $48 million policy was "simply not enough" to address the scale of the harm. That finding accelerated carrier withdrawals from ageing coastal stock and prompted industry-wide recalibration of what adequate limits look like on high-density residential buildings.
The eventual $1.02 billion court-approved settlement drew on the balance sheets of 31 defendants. The security company employed at the building carried the largest single share, at $517.5 million, paid through its carriers including AIG, Zurich, Chubb, Liberty Mutual, and AXA XL. The general contractor and development team of the neighbouring Eighty Seven Park condo contributed a combined $157 million and $84 million respectively through their construction insurers.
Five years on, Florida's property market has materially improved from the crisis conditions of 2022 and 2023. Florida's Office of Insurance Regulation reported in April 2026 that the state averaged just a 0.8% rate increase over the prior two years — a sharp deceleration from double-digit annual rises. Seventeen new carriers have entered the market since the December 2022 legislative reforms, and Citizens Insurance, the state insurer of last resort, has shed approximately 76% of its policies, falling to around 336,000 by March 2026.
But the improvement is not evenly distributed. Coastal high-rises in Miami-Dade remain among the most demanding risks to place, and for a development carrying the reputational weight of the Champlain Towers site, underwriting scrutiny is categorically different from a standard luxury tower. Brokers will want to see not just engineering reports and reserve studies, but evidence of community engagement and a development team with demonstrable U.S. credentials.
The Damac case offers a clear signal: the post-Surfside market does not merely price risk — it prices relationships, local knowledge, and track record. A developer entering Florida's most sensitive beachfront market without established carrier relationships, without a domestic partner, and without prior U.S. ultra-luxury residential experience will find placement significantly harder than the deal economics might suggest.“It's still a very challenging market,” said Sweeney.
Rossely has said the firm plans to relaunch sales toward the end of 2026 once a joint-venture partner is in place and the insurance and permitting questions are resolved. Whether that timeline holds may depend less on the South Florida luxury market — where Fort Partners reportedly sold more than $2 billion in units over three months at its Four Seasons Surfside project — than on whether Damac can find a domestic partner willing to put its own carrier relationships behind a project that, five years on, still carries the weight of 98 names on a banner across the street.
