The Expert:
Greg Perruzzi, Senior Vice President, Construction, Gallagher Bassett
QUESTION: What are some key regulations that are set to shape the future landscape of the construction industry? What is defining its trajectory?
A: The construction industry is entering a period of significant change, with safety, compliance, and innovation taking the spotlight. Evolving regulations are poised to reshape the landscape, emphasizing proactive measures to mitigate risks, enhance operational efficiency, and safeguard employee well-being. These changes represent an opportunity for contractors, insurers, and risk managers to lead the charge in creating safer, more sustainable, and forward-thinking work environments.
1. Osha's PPE Fit Requirement
Effective Jan. 13, 2025, the Occupational Safety and Health Administration (OSHA) has mandated that all personal protective equipment (PPE) provided to construction workers must properly fit each individual. This update addresses long-standing safety concerns where ill-fitting gear contributed to injuries and reduced compliance. Contractors will need to maintain a diverse inventory of PPE sizes, implement fit-check protocols, and train supervisors to verify compliance before work begins. Failure to comply could result in citations and increased liability exposure.
2. Heat Illness Prevention Standard
The implementation of OSHA’s proposed heat illness prevention rule, if passed, will introduce stringent requirements for outdoor work environments. Employers will need to provide shaded rest areas, potable water, acclimatization programs, and heat-stress training. This regulation responds to rising heat-related incidents and temperature extremes. Construction firms should integrate heat safety measures into site plans and document worker training to avoid penalties and ensure workforce health.
3. Silica Exposure Enforcement
OSHA’s enforcement of its silica standard will intensify, maintaining the permissible exposure limit at 50 μg/m³ over an eight-hour TWA. The focus will be on dust control measures, medical surveillance, and recordkeeping. Contractors should invest in engineering controls such as water suppression and vacuum systems, while insurers may see increased respiratory claims if compliance lags.
4. Energy Code Updates
The 2024 International Energy Conservation Code requires state adoption reviews by the end of 2026, promising 7.8% efficiency gains over the 2021 code. Contractors will face higher insulation standards, tighter building envelopes, and more efficient HVAC and lighting systems. These changes will increase upfront costs but reduce long-term energy expenses.
5. New York's All-Electric Building Mandate
Starting Jan. 1, 2026, most new low-rise buildings (under seven stories) in New York will be prohibited from installing fossil fuel systems. This transition to all-electric construction will accelerate demand for heat pumps, induction cooktops, and electric water heaters. Contractors must adapt quickly, and insurers should anticipate evolving risk profiles.
6. Confined Space Regulations
California implemented new confined space rules on Jan. 1, 2026, requiring competent person surveys, immediate notifications for new permit spaces, and formal rescue training. These measures aim to reduce fatalities, but they add compliance complexity and training costs for contractors.
7. Davis-Bacon Act Updates
The major overhaul, effective Oct. 23, 2023—with some provisions under injunction—expands coverage and clarifies subcontractor definitions for federally funded projects. Contractors must ensure payroll compliance and accurate wage classifications to avoid penalties and project delays.