Lockton Published Guide Amid Construction Failures
The firm released its Project Certainty Guide as Australia faces a surge in construction sector insolvencies.
Updated on Oct. 14, 2026 in Construction
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Lockton released the Project Certainty Guide on 9 September 2026 to help firms manage project risk. This comes as the construction sector accounted for 24.5% of the 14,152 Australian business insolvencies recorded in 2025-26.
Why it matters
Construction remains the primary source of company failures in Australia, with collapse rates currently running 75% above pre-pandemic levels. The guide provides tools for companies to pressure-test project arrangements amid these significant industry pressures.
Construction insolvencies rose to 3,475 in 2025-26 from 1,515 in 2018-19, with the sector making up 24.5% of total business failures. Meanwhile, Victoria recently increased its Home Warranty insurance limit to $400,000 from the previous $300,000 cap.
The players
Lockton
Lockton is a global professional services firm that provides risk management, insurance, and employee benefits consulting.
Australian Taxation Office
The Australian Taxation Office is the principal federal revenue collection agency for the Australian government.
The details
Lockton designed the guide to include a checklist for evaluating current project risks, as trade credit insurers increasingly rely on buyer-level assessments to manage exposure. The sector continues to struggle with high failure rates despite new regulatory changes like the July 1, 2026, implementation of ATO Payday Super rules.
Timeline
2018-19: Construction insolvencies numbered 1,515.
2020-21: The last financial year before 2025-26 to record an insolvency decline.
2025-26: 14,152 businesses entered external administration.
1 July 2026: ATO Payday Super rules and Victorian Home Warranty began.
9 September 2026: Lockton released the Project Certainty Guide.
Market Landscape
The introduction of the ATO Payday Super rules represents a regulatory shift that construction firms must navigate alongside broader market insolvency pressures. These requirements add a layer of complexity for firms operating within an environment already strained by high business failure rates.
Consumers engaging with construction projects may see increased costs or stricter contract terms as firms navigate higher insurance limits and regulatory requirements. Prospective homeowners in Victoria should note the increased $400,000 Home Warranty cover when evaluating their building insurance protection.
The takeaway
Firms are increasingly prioritising rigorous risk assessment to survive the current wave of industry insolvencies. Property owners and project stakeholders should stay informed on updated insurance limits to ensure their financial protections match current project values.
Further reading
For more on industry trends, see Construction.
Source note: This article includes information reported by Insurance Business.
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