Construction industry a vibrant but challenging market for agents in Nevada

Posted on August 30, 2023

By Kyle Flynn

Recent population growth has created a construction boom in Nevada over the past couple of years – Nevada’s population grew 12.68%, making it the fifth-highest in the U.S. in 2022.

A growing population means more demand for new construction of residential homes, commercial buildings, and infrastructure like hospitals and schools. In a state where the construction industry makes up about 7.3% of the $218 billion gross domestic product, population increase creates a lot of opportunities for a variety of businesses.

Nevada’s construction industry also faces its fair share of difficulties. In March of 2022, Aaron West, CEO of the Nevada Builders Alliance, shared the five Ls of construction – Labor, Lumber, Logistics, Land, and Laws – and said, “This is the first time I can remember where really all five are causing a super storm; we are having issues in all five sectors.”

The risks

The super storm West describes can intensify the risks in an already risky industry, making it more difficult to find affordable and appropriate insurance coverage for construction businesses.

Builders may try to keep up with the high demand to construct additional housing, community resources, and commercial spaces by shortening deadlines. Tight deadlines can require companies to push through projects, at the expense of quality work. Shorter deadlines can lead to increased insurance claims as a result from mistakes and defects, like issues with structural integrity, waterproofing, or sealing around doors and windows. Material availability also complicates project timelines, as shipping delays slow supply chains. To keep this from delaying projects, inferior materials are sometimes used, increasing the likelihood of future defects.

Changes to the landscape of the job market, due to the pandemic, have brought a major gap between people able and willing to work and employers seeking to hire. A recent survey found that 74% of construction firms throughout the country plan to hire new people. Since the construction industry is such a big part of Nevada’s economy, firms here will likely take on new hires. The worker shortage may cause construction companies to hire workers with less experience or make do with fewer hands onsite. These labor constraints can lead to both an increased likelihood of job site accidents as well as the potential for lower-quality work.

In addition to labor concerns, construction companies have been dealing with higher costs for several years – lumber and other material, health care, technology, and labor. Rising expenses put pressure on slim profit margins, so making room in the budget for insurance, especially in higher-risk situations or after a loss, can get more and more difficult. As insurance professionals, though, we’re aware it can be more expensive for clients to pay claims out of pocket if their business is underinsured, than to purchase the appropriate insurance.

Construction firms in Nevada face several unique challenges: extra building codes designed to ensure structures withstand wildfires, sharp changes in topography, and an abundance of desert area. This can make it challenging to find a tract of land large enough to meet demand, and changing the landscape to make it easier can be very costly. The work required to meet or mitigate these challenges can inherently make a construction company harder to insure, as the work becomes riskier and more complex. They also make operating a construction business more costly, again leaving less room in the budget for the proper insurance.

Aspera’s appetite

Specific construction-related insurance challenges exist for business owners and managers who have experienced a loss, as well as those who take on higher-risk work. Standard markets may not provide coverage for contractors, due to the types of work they plan to do.

Since 2016, Aspera has tremendous success finding insurance solutions for construction risks in the excess and surplus market. We work with markets to craft coverage for professionals within all levels of the construction industry, ranging from artisan contractors, new residential and commercial construction, renovation and remodeling, and 100% paper contractors, by tailoring coverage and pricing to suit the needs of individual accounts. We make the hard-to-insure easy to please, with a proven track record on construction accounts despite risk or loss.

We recently helped a retail agent with a site grading, excavation, and utilities installation contractor. The agent had trouble getting the client’s policy renewed and now had to grapple with a gap in coverage. The agent turned to Aspera, where we specialize in hard-to-insure situations like gaps in coverage or tough classes like underground work. We worked with our carrier to return a quote for coverage that fit their client’s unique needs in just 24 hours.

While there are challenges with insuring construction companies, the need for insurance is high. Construction companies can be a good market for insurance agents to tap into, particularly in Nevada, where construction is such a major part of the state economy. Many of the associated risks, however, require creativity and experience to put together affordable and reasonable solutions that make sense for each client, and Aspera has those in spades.

Kyle Flynn is the Commercial Lines Division Manager at Aspera Insurance Services, a wholesale brokerage specializing in hard-to-place property, casualty, and specialty risks. He has led the Commercial team at Aspera since early 2022 and has ten years of prior underwriting experience, as well as five years on the agency side of the industry. For more information on working with Aspera, email or visit