Resilient Infrastructure: 3 Risks to Watch

Resilient Infrastructure: 3 Risks to Watch
November 3, 2025 10 mins

Resilient Infrastructure: 3 Risks to Watch

Beyond the Blueprint: Tackling the Top 3 Risks in Infrastructure Projects

Cost inflation, project complexity and tight schedules aren’t the only pressures facing infrastructure stakeholders. Emerging risks — from design and contract misalignment to tech-driven vulnerabilities — demand proactive risk management across the entire project lifecycle.

Key Takeaways
  1. Design maturity and contract alignment lay the groundwork for a strong project framework and help avoid costly insurance gaps.
  2. Technology can accelerate progress or introduce new risks. Success depends on thoughtful integration and oversight.
  3. An infrastructure risk management program — supported by a broker with global touchpoints and deep sector expertise — can identify and address challenges long before projects break ground.

Table of Contents

  1. Introduction

  2. Get the Design Right Early

  3. Clarify Contracts to Allocate Risk

  4. Building Tomorrow: Technology's Impact on Infrastructure

  5. A Blueprint for Effective Infrastructure Risk Management

Global infrastructure investment is driving a wave of ambitious large-scale public and private projects — from tunnels and railways to airports and utilities. But as these mega-projects grow in scale and complexity, they are becoming increasingly challenging to build. Labor and material shortages, stretched contracting capacity and intricate risk-sharing arrangements are putting pressure on stakeholders across the board.  

“Contractors don’t die from starvation — they die from overeating,” explains Daniel Machado, managing director and North American growth leader for surety and subcontractor default insurance (SDI) at Aon. In other words, it’s not a lack of opportunity that threatens contractors — it’s taking on too much, too fast, without the right risk controls in place. 

As infrastructure projects scale up, so do the risks — and not all of them are immediately visible. Three critical challenges are shaping outcomes: undefined design parameters, contractual risk allocation and technology integration. To manage these, leaders need to employ a proactive, risk-aware approach across the project lifecycle. 

$106T

$106 trillion in investments will be needed by 2040 to meet the demand for new and updated infrastructure.

Source: McKinsey

3 Macroeconomic Pressures

  • 01
    Economic Volatility

    Global tariffs and recent inflation shocks reverberate across project budgets, with uncertainty prompting greater scrutiny from investors and lenders.

  • 03
    Climate

    Extreme weather puts pressure on insurance markets and highlights the need for resilient design.

3 Operational Challenges

  • 01
    Supply Chain

    Global dependencies, delays and shortages impact the procurement of construction materials.

  • 02
    Workforce

    Tunnel and heavy civil projects are especially burdened by a shortage of experienced talent.

  • 03
    Cyber

    As infrastructure becomes more connected, cyber risk from ransomware, data breaches and IT system hacks grows.

Trend #1: Get the Design Right Early  

Building infrastructure that can stand the test of time starts with good design. Yet many complex projects move ahead with incomplete or immature design plans.  

Insufficient designs can lead to downstream issues like cost overruns, rework and delays. In the worst-case scenario, design deficiencies that go unnoticed can lead to catastrophic failures — not just in budgets and timelines, but in the lives of the people who rely on the infrastructure every day. A bridge, tunnel or rail line is more than an engineering feat; it’s a lifeline for communities. When design falls short, the consequences can be deeply human. 

The problem is exacerbated by: 

  • Talent shortages, with early-career designers sometimes working on critical infrastructure elements. 
  • New environmental and safety codes that are changing rapidly and introduce the potential for non-compliance, which can delay approvals or require costly redesigns.
  • Emerging artificial intelligence (AI) design technologies, which can be used to enhance models and provide alternative designs. Nevertheless, the industry remains far from fully trusting AI, and these designs still require human oversight.

When specifications are incomplete at contract inception, owners risk exposure to insurance coverage gaps that may only surface later in the project lifecycle. 

The Bottom Line: Without mature, well-defined designs and early insurance alignment, infrastructure projects risk spiraling costs, delays and uninsurable exposures. 

>50%

Many projects are awarded with designs only 30-50% complete, when best practice suggests they should be progressed to at least 60-75% or more to ensure that cost and schedule commitments are achievable.

Source: Aon research

Trend #2: Clarify Contracts to Allocate Risk 

Contracts for large-scale infrastructure projects must do more than outline responsibilities — they need to clearly and fairly allocate risk between owners, contractors and lenders. Without that clarity, stakeholders can face financial exposure related to poorly managed risks.

Today’s projects demand more sophisticated contractual approaches: ones that fairly allocate risks, account for potential disruptions and provide clear mechanisms for managing unforeseen economic and environmental challenges.

When contracts fall short, risks can compound over the mega-project lifecycle:

  1. Between initial design intentions and actual project execution requirements, contractual misalignments can lead to scope creep.
  2. Between construction and operational phases, contractual interfaces can result in financial vulnerabilities. Similarly, in the transition to the operation phase — where there is added liability exposure — penalties stemming from failure to meet contractual requirements can also be significant. 

Insurance presents another layer of complexity in infrastructure contracting — and regional nuances play a significant role. From coverage constraints to collaborative contracting models, there are distinct trends and developments across markets that project leaders should consider, including but not limited to: 

  • North America

    SDI single limit constraints are becoming a notable issue for large infrastructure projects in the United States and Canada, with organizations discovering that their SDI single limit is insufficient for the scale of trade packages. For example, a $300 million trade scope may only be covered by a $50 million SDI limit. This kind of coverage gap can pose financial and risk management challenges.  

    Aon’s SDI team is continuously working to solve this issue by implementing excess SDI capacity for large infrastructure projects to provide organizations with larger limits than traditionally available. Aon SDI has placed several such deals and works regularly with the marketplace to increase capacity and appetite in the space on behalf of clients.  

  • Pacific

    The trend towards alliance-based and incentive contracts in regions like Australia and New Zealand aims to mitigate financial risks through more collaborative risk-sharing approaches. Such contracts are most effective on billion-dollar mega projects involving multiple big contractors, geotechnical experts and complex design requirements — helping to mitigate financial risk and improve project outcomes. 

    Aon Australia is the leading industry broker in alliance placements,1 with the key to success being early engagement with the alliance team and the creation of an insurance working group. 

  • Asia

    Owner Controlled Insurance Programs (OCIPs) — where the project owner or developer, rather than the contractor, purchases and manages the insurance coverage for a construction project — are becoming popular for large-scale infrastructure projects.  

    OCIPs help ensure consistent coverage across the contractors and subcontractors involved in the project while providing more tailored coverage than individual policies. Another key benefit is cost efficiency: By consolidating insurance purchasing, owners can achieve cost savings. 

The Bottom Line: Poorly structured contracts and misaligned insurance terms can create costly gaps in coverage and accountability for complex, multi-phase infrastructure projects. 

Trend #3: Technology's Impact on Infrastructure 

Tech’s Influence Across the Project Lifecycle 

Technology is transforming infrastructure — but not without trade-offs. While digital tools can unlock efficiency and precision, they also introduce new risks and complexities. Projects slow to adopt technology may fall behind competitors, while early adopters face steep learning curves and potential missteps. Success depends on how effectively organizations integrate and adapt to fast-evolving tech tools. 

Advanced modeling, robotic and predictive design technologies are already improving project oversight, enabling real-time tracking of progress and safety, optimizing resource allocation and strengthening risk management.  

AI is also reshaping design and modeling, injecting innovation into traditional processes. But challenges remain:  

  • Liability issues: If an autonomous machine or AI-driven decision causes an error or accident, it can be difficult to determine accountability.  
  • Validation of AI-generated designs: Ineffective checks and balances of these designs can introduce technical and safety risks. 
  • Workforce adaptation: Not all teams might be trained to use new technology effectively, leading to potential mistakes or under-utilization of expensive tools.  
Quote icon

If the design phase has been taken out of the hands of people, the risk is inherent. Is the AI actually designing something that can be trusted — and how is this checked?

Vincent Banton
Head of Construction & Infrastructure, Asia Pacific
Infrastructure 2.0: The Technological Transformation 

AI, Internet of Things and automation are redefining the infrastructure landscape, but thoughtful integration is essential to avoid cascading failures.  

Smart city infrastructure is facilitating real-time monitoring of complex urban systems like waste disposal, water usage and environmental conditions. Data centers are helping to drive technological infrastructure development, with massive projects creating entire technological ecosystems that include power generation, computing infrastructure and advanced environmental controls. 

However, as technology is integrated into the infrastructure underpinning cities, cyber risk is rising. More connected systems mean more entry points for bad actors, making cyber resilience a critical part of infrastructure planning. 

The Bottom Line: Without proper oversight, training and cyber resilience frameworks, transformational technology can introduce new liabilities faster than it solves old problems. 

Quote icon

Integrating smart cities with smart roads, buildings and ports presents an exciting opportunity. But along with its immense potential to drive innovation and efficiency, the technology required to make these systems work comes with challenges.

Michael Roark
Managing Director, National Construction & Infrastructure Practice, United States

A Blueprint for Effective Infrastructure Risk Management 

Despite the scale and complexity of today’s infrastructure projects, many organizations still lack rigorous risk management at project start. Fewer than half of large construction and engineering firms say they always consult risk or legal teams at a project’s outset to map out risks and strategies.2 

The firms that build resilience into their projects from day one aren’t just managing risk — they’re protecting reputations, livelihoods and the communities their infrastructure will serve. Those that overlook early planning may find themselves reacting to problems that could have been prevented.  

Here are three ways to help risk-proof infrastructure projects: 

  1. Invest in Early Risk Planning 
    The early planning phase is crucial for identifying and mitigating potential design-related risks and insurance coverage issues. Engage risk advisors, including brokers, early in the design and contract development process to 1) address coverage needs and 2) gain access to alternative risk transfer solutions, such as parametric insurance and cost overrun protection.   
  2. Strengthen Contractual Hygiene   
    Employ fair risk-sharing mechanisms between project stakeholders in contracts and allow adjustments for unforeseeable issues. Align contractual terms with insurance coverage requirements and project scale, considering provisions for specific risks like tariffs, cost escalation and unexpected disruptions.  
  3. Embrace Technology — But Manage its Risks  
    Balance innovation with risk control: Companies must manage software bugs, ensure data integrity, train staff on digital tools and prepare contingency plans for technology failures. Robust digital and cyber protection strategies can help mitigate cyber risks related to technological vulnerabilities.  
Next Steps: Fortify Your Approach to Infrastructure Risk Management 

Infrastructure projects are set to face a rapidly evolving risk landscape into 2026, from inflationary pressure to supply chain disruptions and workforce shortages.  

As a leader in providing innovative insurance and risk management solutions, Aon helps organizations make better decisions about their complex construction projects, backed by proprietary data and analytics and deep sector expertise. Get started by reaching out to our Construction & Infrastructure team today. 

Aon’s Thought Leaders 

Vincent Banton 
Head of Construction & Infrastructure, Asia

Jon Chapman 
Head of Construction & Infrastructure, Europe, the Middle East and Africa 

Mary-Catherine Hamill 
Head of Construction & Infrastructure, Australia  

Keith Jurss
Managing Director, Construction & Infrastructure, United States

Daniel Machado 
Managing Director, North American Growth Leader, Surety and SDI   

Chris McLean 
Head of Construction & Infrastructure, Canada 

Michael Roark 
Managing Director, Construction & Infrastructure, United States 

Tariq Taherbhai 
Global Chief Commercial Officer, Construction & Infrastructure    

1 By revenue and count
2 CMS International Construction Study 2024

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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