Construction

Navigating insurance complexity in modern construction

Ben Combarro 15 October 2025

As the construction industry evolves, modern methods of construction (MMC) are redefining how buildings are designed, assembled, and delivered.

With benefits such as faster timelines, improved sustainability, and enhanced quality control, MMC is gaining traction across the built environment. However, these innovations introduce new complexities for professional indemnity (PI) insurers. From modular builds to emerging technologies, MMC challenges traditional underwriting and demands a more nuanced approach to risk assessment and mitigation.

In this article, we explore the key concerns faced and outline practical strategies firms can adopt to manage their exposure effectively.

How Is MMC improving the industry?

MMC is driving meaningful improvements across the construction sector. By leveraging off-site manufacturing, modular assembly, and digital design tools, MMC enables faster project delivery, reduces on-site disruption, and enhances consistency in build quality. These techniques also contribute to sustainability goals by minimising waste and energy use, while helping to address labour shortages through more streamlined workflows. Collectively, MMC supports the delivery of safer, more resilient buildings, which is a positive shift for developers and contractors.

What does this mean for insurers?

Despite its advantages, MMC introduces a distinct set of risks that insurers must carefully evaluate. Several concerns are shaping underwriting decisions and influencing PI exposure. These include the following.

Aggregation of risk (modular build)
- A single design or manufacturing flaw can impact an entire development, potentially resulting in claims far exceeding those seen in traditional builds.
Unclear liability chains
- The involvement of multiple stakeholders, including manufacturers, contractors, and designers, complicates the assignment of responsibility, making claims resolution more challenging.
Innovative technology
- Many MMC techniques are relatively new and lack long-term performance data, creating uncertainty around durability and reliability.
Building Safety Act 2022
- Post-Grenfell regulatory scrutiny has intensified, with heightened focus on fire safety and build quality. MMC projects may face increased exposure under these evolving standards.

Risk mitigation in practice

To address concerns and reduce PI exposure, firms adopting MMC must embed robust risk mitigation strategies across their operations. Proactive management not only strengthens internal governance but also builds confidence with insurers navigating this evolving landscape.

Supplier due diligence: vet suppliers thoroughly and partner with established MMC providers that demonstrate strong quality assurance and compliance standards.
Documentation and records: maintain comprehensive records of design decisions, supplier assessments, and regulatory approvals to support transparency and traceability.
Risk allocation in contracts: clearly define roles and responsibilities within contractual agreements to ensure risks are appropriately distributed among designers, manufacturers, and contractors.
Staff training: equip teams with the knowledge and skills to manage MMC-related risks through targeted training and continuous learning.

Miller is here to help

Miller's Construction PI capabilities

Alongside mitigation strategies, a robust insurance programme is essential to safeguard against emerging exposures.

At Miller, we help clients navigate the evolving risks of modern construction. Our specialist team delivers tailored PI solutions and expert guidance to ensure you're protected as MMC continues to reshape the industry.

Miller's Construction PI capabilities