India construction insurance tightens amidst disaster risks

Large developments face regular natural hazards, including floods and earthquakes.

Demand for construction insurance is rising across India as the sector expands, but insurers are tightening scrutiny on natural disasters, project management, and delay risks.

Aon's 2026 Global Construction Insurance and Surety Market Report shows that whilst the market remains competitive and growth-oriented, insurers are placing greater emphasis on early risk assessment as project sizes and asset values increase. 

This shift comes despite a softening insurance market, where strong insurer appetite and improved reinsurance conditions are still allowing builders to secure cost-effective coverage.

Sushant Sarin, Aon’s head of strategy and commercial risk in India, noted that large-scale developments face regular natural hazards like floods and earthquakes. 

He stated that businesses must invest in strong project governance and realistic delay timelines, whilst engaging with insurers early to manage costs.

The report highlights that sustained spending on infrastructure, green energy, and high-tech digital projects — such as data centres and semiconductor plants — is driving this market expansion. 

However, these technology-led projects carry higher power needs and more complex risk profiles, creating a need for specialised insurance underwriting.

Nisheeth Srivastava, Aon’s head of construction and infrastructure in India, stated that sustained public spending and a competitive insurance market provide good opportunities for contractors, provided their risks are well understood and actively managed.