Latin American Construction Faces Growing Number of Risks: Chubb

The construction sector in Latin America is operating under increasing pressure due to a combination of economic, social, environmental, and technological risks, according to Chubb’s Construction Under Pressure: Risk Outlook in Latin America report.

Persistent inflation, currency devaluation, and rising labor and material costs are eroding profitability across the region. Cristian Di Lorio, Construction Regional Head, Chubb América Latina, highlights that “building under pressure has become the norm,” as contractors struggle with high project costs, unstable regulatory environments, and limited access to financing. The report also warns that late payments and contract defaults continue to strain liquidity, adding to financial uncertainty.

Worksite safety remains a critical issue. Falls from height, improper machinery use, lack of personal protective equipment (PPE), and deficient infrastructure are among the most common causes of accidents. The shortage of skilled labor further complicates operations, says Chubb. 

Moreover, Latin America’s vulnerability to natural disasters, such as earthquakes, floods, and hurricanes, poses a significant threat to construction projects. In parallel, social conflicts, protests, and community opposition are increasingly disrupting projects of medium and large scale, reports the company. New environmental requirements also push companies to adopt higher sustainability standards, raising compliance costs and extending project timelines.

Abrupt political shifts and regulatory changes continue to destabilize the sector. From evolving labor laws to stricter environmental regulations, contractors are forced to constantly adjust project planning and execution. These shifts can alter cost structures overnight and affect investor confidence, making risk anticipation and mitigation essential.

Low Technological Adoption and Rising Cyber Risks

Despite the availability of transformative technologies like Building Information Modeling (BIM), IoT, and AI, few construction companies in the region have implemented them, warns Chubb. This lag hinders efficiency and risk prevention. At the same time, construction firms face growing exposure to cyberattacks targeting project management and financial platforms, underscoring the need for stronger digital protection.

According to Chubb, the future of Latin America’s construction industry will depend on its ability to adapt, invest in prevention, and build strategic partnerships that enhance resilience. Insurance plays a critical role in this process by offering financial protection and operational continuity amid uncertainty, says Chubb.

“The ability to adapt to changing contexts, invest in prevention, and consolidate strategic alliances can determine the future of the sector,” says Di Lorio.