The commercial general liability market for the U.S. construction industry continues to firm with underwriters seeking rate increases of up to 15 percent, according to a report published by Marsh. Construction firms with poor loss histories are experiencing even larger liability rate increases and in some cases receiving non-renewal notices from their underwriters.

After nearly a decade of rate declines, insurers also are typically seeking to raise rates on umbrella and excess liability insurance of between 8 and 10 percent, according to Marsh's August 2012 Construction Market Update.

"U.S. construction firms are experiencing a much more challenging liability market as underwriters seek to raise rates and restrict coverage to make up for years of soft market conditions. This comes against the backdrop of medical cost inflation and changes to some state statutes that have extended coverage beyond the insurers' originally intended scope," said Michael Anderson, Leader of Marsh's U.S. Construction Practice.

"However, the insurance industry's capital position remains very strong. So while underwriters attempt to apply rate increases across the breadth of their contractor portfolios the market remains competitive, especially for well-managed risks," Mr. Anderson said.

According to Marsh's report, rates for project-specific general liability, general liability wraps, controlled insurance programs, builders' risk, environmental insurance, and contractors professional insurance, have generally remained flat or up only slightly in 2012.

Although the workers' compensation market has been relatively stable for good quality risks, rates have increased in many states as underwriters continue to grapple with deteriorating combined ratios and escalating medical costs, Marsh said in its report. Forthcoming changes to the National Council on Compensation Insurance's experience modification calculations—which help to determine workers' compensation rates—could have a particularly negative impact for the construction industry in 2013.

"Those construction firms that proactively distinguish their risk profiles from their peers are best positioned to secure more favorable terms, conditions, and pricing from underwriters," Mr. Anderson added.