A stable market, growing demand, and legal headwinds in New York are shaping how construction professionals manage risk.
Rich Hartman (pictured), has been in construction insurance long enough to know that the work is never simple. “One minute I’m working with a large design firm, the next a state agency or major contractor,” said Hartman, senior vice president, construction professional liability broking leader at NFP. “It’s something new every day.”
He didn’t land in the industry by accident. Hartman majored in insurance in college, originally influenced by a family member who worked in the field. A call just six months after graduation led him to underwriting for architects and engineers, where he found his niche in construction-related professional liability. “I pretty much haven’t left that segment since,” he says.
Hartman focuses on professional liability, which behaves differently than other lines of construction coverage. “There are three main participants in any project: design professionals, contractors, and owners,” he said. “Each has its own professional liability needs and market dynamics.”
Overall, Hartman sees the professional liability sector in a period of relative calm. “We’re in a fairly stable environment in terms of capacity and rate,” he said, noting that while conditions fluctuate based on individual risk profiles, new entrants are joining the market, a trend he expects to continue over the next 12 to 24 months.
Yet challenges remain. Litigation and complex project delivery models among numerous other variables are shaping how coverage is structured. “On nuclear verdicts, for example, our clients can get wrapped up into global settlements, paying more than their fair share,” Hartman said. The risk isn’t just theoretical. In New York, it’s amplified by the infamous scaffold law.
Certain parts of the New York labor laws, often referred to as the Scaffold Law, have outsized impact on insurance pricing and participation. “It imposes strict liability on contractors and owners for gravity-related injuries,” Hartman said. “The definition of what is ‘gravity-related’ isn’t always what you’d expect, and the resulting claims can be staggering.”
These laws have triggered a crisis in the general liability market, pushing premiums significantly higher in New York City and constraining available capacity. “It’s dramatically more expensive to procure coverage here than anywhere else in the country,” he said.
To help mitigate these issues, the construction and infrastructure team at NFP are leaning into alternative dispute resolution for workers’ compensation claims. “It’s shown promise in speeding up recovery and reducing costs,” Hartman said.
Professional liability coverage is expanding beyond architects and engineers. “Demand from contractors and project owners has grown tremendously over the past decade,” Hartman said. The shift reflects changing delivery models and more complex risk exposures, especially in mega-projects like data centers and clean energy facilities.
Subcontractor default insurance (SDI) is also evolving. Though it’s traditionally served large contractors, Hartman noted a recent trend: “One market has started offering SDI tailored for the middle market. That’s a big step, but there’s still a high talent and capital barrier to entry.”
Labor shortages remain a persistent risk driver. “Skilled labor is increasingly hard to find, especially for high-tech projects,” he said. While he sees some promise in prefabrication and technology, he’s wary of over-reliance. “There’s nothing like a human being.”
Supply chain disruptions, however, seem more contained. “Post-COVID, most high-performing contractors have gotten good at managing that risk on a project-specific basis,” Hartman said.
One of Hartman’s passions is mentoring young professionals. “It’s probably one of my favorite things at this stage of my career,” he said. “I’ve had the good fortune to see many sides of the business, and I love passing that on.”
He described his workday as a whirlwind, but one he wouldn’t trade. “I truly love what I do,” he said. “And I think insurance is an unbelievable career opportunity. I wish I could get my kids into the business.”
With six children, three grandchildren, and a full client roster, Hartman balances his time between family, sports, and the ever-evolving landscape of construction risk. “I stay as active as possible, physically and mentally. There’s a lot to live for.”
Despite legal hurdles and talent shortages, Hartman remains optimistic. “The insurance market is adapting, clients are getting more sophisticated, and we’re seeing smart solutions like broader professional liability coverage and alternative dispute resolution make a real difference.”
His message to the next generation is simple: “The more complex the projects get, the more value we can bring. That’s not going to change anytime soon.”
