When the construction industry undergoes changes, company leaders might be tempted to explore new business opportunities beyond their established client base and expertise.1 However, during these uncertain times, it's best for companies to evaluate and test their financial, operational and risk resiliency.
“Economic and geopolitical events affect contractors in every business environment, but we find the most valuable risk discussions revolve around project selection and how their historic successes can be duplicated elsewhere,” says Donna Powers, head of Construction Bond at The Hartford.
A long-term project focus can help construction leaders become the go-to contractor in their specialty. “Well-planned specialization is one of the best paths to growth and profitability," says Powers.
Powers offers five strategies to help business leaders succeed:
1. Build Best Practices Around Profitable Projects
Construction companies have one of the steepest failure rates among major industries, according to 2022 Labor Department statistics.2 “Identifying your most successful jobs, measuring their profit margins and employing technology that can boost safety, efficiency and savings are just a few necessary tactics to understand and build your company’s current resilience and growth potential,” Powers says.
2. Find and Leverage Strong, Long-Term Relationships
Staying close to project owners who plan responsibly, deal faithfully and communicate transparently is likely the most critical business strategy for any construction company.
“When Sureties discuss project selection and going into new territories with construction leaders, we listen for strong relationships that will make the job go smoothly,” says Powers. “It’s usually a good sign to see a construction firm that sticks with owners they've already done a lot of work for, especially if they are pursuing a much larger contract than they may have completed in the past.”
3. Ask Experienced Risk Experts for Input on Contract Language
Even when working with the most trusted owners and project partners, construction leaders should request an expert risk opinion on every contract they propose or receive. Powers stresses that experienced surety partners are generally not legal experts, but they can provide suggestions that may improve contract language overall.
“Contract evaluation is such a big part of what goes into the overall success of a project,” says Powers. “Even with qualified financial and legal experts already reviewing contracts, The Hartford has a team of experienced claims attorneys that can often spot terms and conditions that may become impossible to meet.”
4. Watch Global Events That May Affect Current and Future Work
Over the past five years, macroeconomic and geopolitical events have had a significant impact on all aspects of construction work, from the availability of talent and raw materials to the way projects are designed.
“If you run a construction company of any size, you need to be aware of how world events may affect your future financial and project considerations,” says Powers.
The Hartford’s Global Insights Center is one resource construction leaders can use to access personalized economic reports and/or subscribe to weekly newsletters on current events.
5. Use the Above Strategies To Build a Go-No-Go Project System
The strategies mentioned above can help design a standardized project selection system, typically known as “Go-No-Go.” A Go-No-Go process works alongside a construction company’s existing business plan to help leaders evaluate potential project challenges before any bid is entered or contract signed.
“While a construction company can build a Go-No-Go process in any way it chooses, there’s value in a framework that can separate projects worth doing from ones that could potentially damage a business,” adds Powers.
Here’s more information on building a Go-No-Go planning process for your construction company.
1 “ABC: Monthly Construction Economic Survey Shows Tariff Impacts Emerge,” Associated Builders and Contractors, April 15, 2025.
2 “34.7 Percent of Business Establishments Born in 2013 Were Still Operating in 2023,” U.S. Bureau of Labor Statistics (TED: The Economics Daily), January 12, 2024.
The information provided in these materials is intended to be general and advisory in nature. It shall not be considered legal advice. The Hartford does not warrant that the implementation of any view or recommendation contained herein will: (i) result in the elimination of any unsafe conditions at your business locations or with respect to your business operations; or (ii) be an appropriate legal or business practice. The Hartford assumes no responsibility for the control or correction of hazards or legal compliance with respect to your business practices, and the views and recommendations contained herein shall not constitute our undertaking, on your behalf or for the benefit of others, to determine or warrant that your business premises, locations or operations are safe or healthful, or are in compliance with any law, rule or regulation. Readers seeking to resolve specific safety, legal or business issues or concerns related to the information provided in these materials should consult their safety consultant, attorney or business advisors. All information and representations contained herein are as of May 2025.
The Hartford Insurance Group, Inc., (NYSE: HIG) operates through its subsidiaries, including the underwriting company Hartford Fire insurance Company, under the brand name, The Hartford®, and is headquartered in Hartford, CT. For additional details, please read The Hartford’s legal notice at www.thehartford.com.
