Earlier in my career, while working closely with construction firms, I found that joint ventures (JVs) were relatively rare. They were typically reserved for unusually large or complex projects, where the risk, capital requirements or technical scope exceeded what a single contractor was willing to take on alone.
Over the past 15 years, I’ve watched that approach change. What were once situational partnerships have steadily become a common and often necessary, way for contractors to pursue and deliver work. Today, JVs are no longer the exception. In many markets, they are becoming standard practice.
From my perspective, working alongside contractors from across the country, this shift reflects how construction projects are now being bid, staffed, insured and executed.
Bigger projects and higher expectations
Projects today are larger, more complex and more demanding than they were even a decade ago. Owners are consolidating scope, accelerating schedules and transferring more risk to contractors through design-bid-build and other alternative delivery methods. At the same time, bonding, insurance and working-capital thresholds continue to rise.
Many contractors are excellent builders but are understandably cautious about overextending their balance sheets or leadership teams. Joint ventures allow firms, including direct competitors, to combine financial strength and experience to pursue opportunities they would not be willing to take on alone.
Geography and specialization drive collaboration
One of the most common drivers of JVs today is geographic reach. While a contractor may have deep specialization in a particular sector (bridges, for example), their expertise doesn’t always align with where new projects are being built.
In addition to expanding the operating territory, JVs offer another valuable benefit, the chance to partner with a contractor who knows the local market. Working with a firm that has local experience, access to regional labor pools, established subcontractor relationships, familiarity with permitting and inspection processes and credibility with owners, provides a real advantage. And, because owners increasingly value a team that has the right technical expertise AND a local presence, the chance of winning more work increases for both parties.
Labor constraints are shaping bid decisions
The skilled labor shortage is no longer a long-term, distant concern, as it is already affecting bid strategies today.
Joint ventures allow contractors to combine local labor availability with specialized or traveling crews, which improves staffing flexibility on projects with aggressive schedules or extended durations. Owners are paying closer attention to labor plans and insurers are doing the same. A bid that looks good on paper only works if it can actually be built.
Risk has shifted downstream
Risk transfer in construction isn’t new, but the degree to which it is increasing certainly is. Contracts today often include aggressive indemnification provisions, substantial liquidated damages and minimal relief for delays or unforeseen conditions.
From a risk management standpoint, concentration of exposure is one of the greatest threats to a contractor’s long-term stability. JVs, even between competitors, allow risk to be shared in a way that aligns responsibility with expertise and financial capacity. This doesn’t eliminate risk, however it helps prevent one project from becoming a company-defining event.
Longer timelines change the equation
Construction timelines today are significantly longer than they used to be. This means that supply chain disruptions, extended permitting processes, phased funding and evolving scopes of work have all contributed to longer schedules across nearly every sector.
Extended timelines mean longer exposure to labor challenges, cost escalation and potential increase in insurance risk. Joint ventures help contractors manage that exposure without tying up capital, bonding capacity, or leadership resources for years at a time.
Why American global is involved early
At American Global, we understand these trends, because we involve ourselves early in the client’s bid process. In most instances, before a bid is even submitted.
We work with clients during pre-bid and bid phases to evaluate joint venture structures, align insurance programs with contractual obligations and assess how risk will be shared throughout the life of the project. Decisions made before the contract is signed often determine whether a JV functions as intended or struggles under misaligned risk.
The role of project wrap-up insurance
When JVs move forward, we recommend evaluating project-specific wrap-up insurance programs based on project size, complexity, duration and balance of self-performed work versus work subcontracted to others.
Wrap-ups can provide consistent coverage across all JV partners and subcontractors, reduce coverage gaps, improve claims coordination and create cost predictability over long project timelines. Just as importantly, American Global manages the administrative burden from enrollment and compliance to reporting and carrier coordination, allowing contractors to focus on execution rather than insurance mechanics.
Looking ahead
Joint ventures are not replacing traditional construction firms. They are, however, a practical response to a market that demands greater scale, deeper specialization, local presence and longer-term commitment.
Having witnessed this evolution firsthand, it’s clear that contractors no longer view joint ventures as a last resort. Instead, they are a strategic tool for business growth and an essential means of delivering work in today’s complex and highly competitive construction environment.
Author bio
Michelle A. Wesolowski is a Senior Vice President and Insurance Leader in Pittsburgh, PA at American Global and has more than 30 years of experience in the insurance industry. For the past 15 years, she has worked closely with contractors nationwide, advising on risk management, joint venture structures and project-specific insurance programs. Wesolowski supports clients throughout the pre-bid, bid and construction phases of complex projects
