The race to build AI data centers is pulling inexperienced workers into high-risk construction trades at an accelerating rate, and insurers are tracking the predictable spike in first-year injury claims that follows. Zurich North America's head of construction casualty confirmed the carrier is adjusting its loss-control approach to match a workforce that the industry estimates is short roughly 349,000 people this year alone.
"The construction industry in the US was already facing labor challenges even before the data center surge," said James Savage, head of construction casualty at Zurich North America. "Depending on which economist you ask, the industry is currently more than a quarter of a million workers short of demand."
Associated Builders and Contractors projects the gap will widen to 456,000 net new workers in 2027 as spending accelerates. Data center construction - driven by technology companies building out AI infrastructure - competes directly with power infrastructure and manufacturing developments for the same electricians, HVAC specialists, and other technical trades.
MEP trades and the first-year injury problem
Mechanical, electrical, and plumbing contractors face the tightest squeeze. Data center projects demand highly technical expertise, yet many entrants are arriving through apprenticeships and workforce development programs with minimal on-the-job experience. The claims data pattern is well established.
"Workers' compensation data consistently shows that employees in their first year on the job experience higher injury rates," Savage said. Zurich is working with contractors and brokers to identify which projects require the most skilled labor and where additional loss-control support may be needed. The goal, Savage said, is "to ensure newer workers receive the training they need so they can return home safely each day."
Schedule pressure, not defective workmanship
Despite the influx of inexperienced workers, Zurich has not observed a meaningful increase in casualty litigation or defective workmanship claims. Contractors have maintained quality assurance and quality control standards effectively. The labor shortage shows up elsewhere.
"Simply getting enough workers onto job sites and coordinating labor across multiple projects has become more difficult," Savage told Insurance Business. Project delays and scheduling pressure have become the primary operational consequence, rather than substandard construction.
Safety shifts from compliance to retention tool
Leading contractors are reframing safety programs as workforce retention strategies. On projects employing thousands of workers across multiple trades simultaneously, scheduling models that balance productivity with worker protection have become standard practice among top performers.
"Because of the labor shortage, contractors and owners recognize they need to provide safe working environments so skilled workers will want to return to future projects," Savage said. Carriers are reinforcing this by looking beyond the workers' compensation policy itself.
Auto liability and behavioral monitoring
One of the biggest loss drivers in construction is auto liability, which also affects workers' compensation claims. Zurich is emphasizing driver safety for employees whether they are on the clock or not. The carrier has also expanded its partnership with construction technology firm Aerosite to deploy job-site footage analysis that identifies unsafe behaviors and near misses on data center projects.
"We've used this technology successfully across other parts of the construction industry, and now we're deploying it on data center projects, particularly during some of the highest-risk phases of construction," Savage said. "The behavioral feedback has been very valuable in helping workers operate safely."
Why this matters for insurance professionals
Workers' compensation underwriters and loss-control specialists should expect first-year injury frequency to remain elevated as data center construction absorbs more green labor through 2027. The playbook emerging from carriers like Zurich - early project triage for loss-control support, auto liability monitoring, and behavioral video analysis on high-risk phases - signals where claims prevention resources will concentrate in the near term. Brokers who help contractor clients document these safety investments may find stronger positioning at renewal, particularly in the MEP trades where labor constraints and technical exposure overlap most directly.
Your membership also unlocks:
