How extreme weather impacts construction

Record date: 8/6/25
Air date: 9/10/25

The frequency and impact of severe weather events — floods, high winds, and heatwaves — on construction sites is rising. What does this mean for worker safety and project budgets? Listen to the latest Future of Risk podcast in our Extreme Weather miniseries. We cover wearable safety technology, AI-powered weather forecasting innovative risk management and insurance solutions, and more, all so construction companies can meet tomorrow prepared.

Host Arooran "Aroo" Sivasubramaniam is joined by Alicia Pavelko, Head of Innovation and Sustainability for Construction, Zurich North America and Doug Stohlman, Head of Construction, Zurich Resilience Solutions NA.

In this miniseries, other episodes include:

8/27/25: Immediate risks extreme weather poses to your business

9/24/25: Top things C-suite leaders need to know now about extreme weather

10/8/25: Resilient: How extreme weather is affecting cities

Guests:

Alicia Pavelko
Head of Innovation and Sustainability for Construction
Zurich North America
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Alicia Pavelko is the Regional Vice President of Construction Property for the West Region and the Head of Construction Innovation and Sustainability. Alicia manages the growth of Zurich’s innovative, sustainability-inspired insurance solutions and is responsible for developing and deploying new product offerings for Construction. Previously, Alicia held leadership positions in the Construction practice at Willis Towers Watson and Marsh, as well as Construction and Marine underwriting positions at Hanover Insurance and Zurich North America. Alicia graduated with a Bachelor of Arts in Economics from St. Olaf College in Northfield, Minnesota.

Doug Stohlman
Head of Construction
Zurich Resilience Solutions NA
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Doug Stohlman is Head of Construction for Zurich Resilience Solutions, where he provides leadership and strategic direction to Construction Risk for North America. He works closely with customers, brokers, and industry associations to provide relevant risk to construction risk and business resilience.

Host:

Arooran Sivasubramaniam
Head of Zurich Resilience Solutions NA
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As Head of Zurich Resilience Solutions for North America, Arooran Sivasubramaniam is responsible for the direction, growth and management of business resilience services to establish ZRS NA as a leader and trusted partner in the evolving risk prevention space.

(PLEASE NOTE: This is an edited podcast transcript, capturing speakers with natural speech patterns that may include incomplete sentences and/or asides, grammatical errors, verbal shorthand and some statements that may be less clear in print.)

Episode transcript:

AROORAN SIVASUBRAMANIAM: Roughly 45% of construction projects worldwide are affected by weather-related delays, leading to billions of dollars in lost revenue and additional expenses annually. Floods, high winds, and extreme temperatures can damage sites, halt work, and affect material quality, leading to project setbacks and financial losses. ¹‚²

Knowing this, welcome to Future of Risk, presented by Zurich North America. We explore the changing risk and resilience landscape and share insights on challenges that face businesses to help you meet tomorrow prepared.

In this episode, we're focusing our Extreme Weather podcast on the unique challenges that the construction sector faces. I'm Arooran Sivasubramaniam, Head of Zurich Resilient Solutions in North America, and today I'm speaking with Alicia Pavelko, Head of Innovation and Sustainability for Construction at Zurich North America and Doug Stohlman, Head of Construction at Zurich Resilient Solutions. Alicia, Doug, welcome to the podcast.

DOUG STOHLMAN: Thank you.

Extreme Weather: A Growing Challenge for Construction Sites

SIVASUBRAMANIAM: So, let's jump right in. When we talk about extreme weather and construction, what first pops to the top of your mind?

ALICIA PAVELKO: So, for me, it's unfortunately utter devastation. If you turn on your TV, if you've looked at the push notifications on your phone, you might think that our media has become incredibly creative with their headlines. But the reality is there has been an incredible uptick in the frequency and the severity of these extreme weather events.

When you boil it down to construction—Construction is one of the most vulnerable industries that's faced day-to-day by these extreme weather events. There's a couple of really important aspects at play when it comes to construction. One being that you have property in the various stages of completion.

So, it could be subject to the elements, whether you're just setting steel, whether you have a roof on a building yet there's all kinds of different hazards to contend with from a weather standpoint at the different points in a project.

Another really critical aspect for construction is that you have people working in uncontrolled environments. If you think about a manufacturing plant, you have the luxury of having a roof over your head and perhaps air conditioning and heat. But when it comes to a construction project, you're outside, most likely exposed to the elements and having to adapt day-to-day to whatever comes your way.

And then the last part of it is everybody knows that the goal in construction is to come in on time and within budget. And so, there is an incredible amount of pressure to work through it all in order to meet those schedules, to hit all of your on-time incentives and to come in on or under budget. So oftentimes, people are making risky decisions and working through extreme weather events when they probably should just be going home.

STOHLMAN: Alicia, I'd like to add a couple points if I could. So, you talked a little bit about rain. This impacts concrete pours, curing times and quality of concrete excavation tasks. Deep excavations, you need to dry it out, adding time and delay to the projects it makes it unsafe for workers.

So, creating slip, trip and fall exposures on platforms, on ladders, on stairs. And then talked a little bit about heat. High heat increases workplace injuries. There's approximately in California 20,000 heat related injuries. ³ And this impacts workers' comp costs, your medical expenses, your loss time costs and it also just lowers production. And also, when you look at just the U.S. Infrastructure broader than just construction, it impacts roads and bridges and rail projects. So, it's very comprehensive.

PAVELKO: Yes, Doug, you actually bring up some really good points because when you think about traditional natural catastrophes, you immediately think about California earthquake, or Florida named storm, or those high hazard floods.

But what we're really talking about here, is an expansion of those traditional CATs into some of these secondary NAT/CAT perils. So, just that everyday rainfall, your atmospheric rivers, your severe convective storms, tornadoes, derechos, wildfires, a whole array of additional perils that were being faced with day in and day out in today's environment.

STOHLMAN: I'd like to also just kind of weave in wind. High winds on a construction project, stop the crane operations, both tower and mobile cranes. When you're not using cranes, you're not making money. Can you imagine being up in scaffolding when they have 25-35 mile an hour risk? You're really at risk with wind working around construction. Tilt ups—we have a lot of tilt up construction out West here, and they require wall bracing. When it becomes windy, you have to add more bracing, or the tilt up will collapse causing property damage.

Then loose materials—if you're on a high rise and you get up to some heavy winds as the building gets built, there's already winds that are just there. And you add another 20 mile an hour wind, you have tools and debris falling off a building. So can you imagine working on a 25-story high rise and dropping a tool or some of the debris going over and it happens all the time. It causes employee injuries down below. And then also, a tool or debris going to the general public or through a car or through a restaurant nearby. So, there's just all kinds of exposures to think about.

How extreme weather and emerging technologies are transforming risk management in the construction industry

SIVASUBRAMANIAM: It is kind of funny—construction. It's a super, super interesting industry, right? We sometimes take it for granted because its industry's been there forever. But it's so complex.

And then, when you bring in some extreme weather—which hits you from so many different angles, including the secondary events as you alluded to, Alicia—this was actually one of the podcasts I was looking forward to the most because I knew there's so many different elements.

Kind of funny—last week I was on a flight, and I'll share something maybe personal with you. So, I know I speak a lot at work, but generally, I'm an introvert and I like to keep to myself. But I make an effort nowadays, every time I fly, whoever I'm sitting next to, I try to strike [up] a conversation, just to be a bit more sociable and meet new people. And coincidentally, last week, the lady that was next to me, she just happened to be a construction executive.

So, the moment I mentioned I work with Zurich Resilient Solutions and some of the things we do around extreme weather, I mean, her eyes lit up. She just got so passionate about it, because she was just talking about all the different effects and consequences and things they need to think about. And their company particularly focused on cement manufacturing. You could imagine with heat and cold and just the science behind cement, what it does to it, right? All things they have to take into account. And obviously if you don't catch it well enough, once it's built, there are very significant consequences to the fixed property itself and potentially people.

So, I really love this to topic, and I love the fact that you guys took in so many different directions. Alicia, you alluded to severe convective storms. It feels like this is emerging terminology and a topic that's probably come up the last 5- 10 years, whereas before, we didn't hear it as much. I think it probably ties a little bit to your comments around severity and frequency. Can you explain a little bit what it is and what it means to builders and building owners?

PAVELKO: Yes, absolutely. So, when we talk about severe convective storms, what we're referring to are straight line winds windstorms, we're talking about derechos, which are defined as an inland hurricane. We also couple events like hailstorms or tornadoes. All of that type of atmospheric disturbance is wrapped up into the terminology of severe convective storm. What's really problematic about severe convective storms, is this is one of those catastrophe perils that we do not traditionally model for as underwriters.

Also, when you look at where these severe convective storms are happening within the United States, it's happening traditionally, or you know, most frequently throughout the central band of the United States. Which again, we've traditionally considered a no CAT or a low CAT zone.

So, from an insurance company perspective, we hadn't been setting rates, deductibles, sub limits, or terms and conditions appropriately to handle this increasing exposure.

There's one really interesting statistic, and that's from NOA. Looking at the 2024 billion dollar plus weather disasters, there were 27 of them that were over a billion dollars, and actually 17 of the 27 falls into the category of severe convective storm, and they took place throughout the central band of the United States. So, this exposure is real. It continues to be something that's really important.

I do want to illustrate though that there are things that we can do about it, and there are things that our customers are actively integrating into their business processes to address this heightened exposure. So, one such example, is solar contractors. Of course, they're building in big open, sunny fields, often remote fields. Areas that are highly prone to severe convective storm.

But they're looking at building and having the most values exposed during lower hazard times of the year. They're also being really selective when picking the materials for the job to make sure that they do have solar panels that are the most hail resistant available on the market. They're also looking for those that have different stowing type technologies so that they can be pivoted and put into a safe place at the end of a workday or for the weekend or whatever it might be.

So, there are a lot of things that we can be doing and that we are doing in order to address this exposure. But again, it's real. It's out there, it's here today, and we have to address it in order for carriers to continue to provide the necessary coverage to our customers and brokers.

STOHLMAN: Alicia, you mentioned stowing. It's really a critical, defense aspect for reducing hail damage, but it takes time to put it in those positions. You just can't predict a halo event in the next 10 minutes, you'll never get the solar panels to be on the right angle and so you're going to cause all kinds of damage.

So, it really is about trying to have a holistic plan needs to be automated. You have to have software AI kind of built into it. The earlier [you] can predict the weather event, the better outcomes you're going to have.

PAVELKO: That's another really good point, Doug, and that kind of brings me to the different types of technology and the significant technological advances that we've seen in the market in the last 6-12 months.

So again, you can get your weather report from your local news, or you can have a weather station on your project site, and you can subscribe to or have individualized weather predictions coming to you to help you predict specifically for your job site a little bit better accuracy than that 10-minute window that you described.

So, in making investments in some of these new and emerging technologies are really important. It's a great opportunity to demonstrate to your underwriter that you are looking to improve your risk and set your risk apart from the competitors in the marketplace.

Risk engineering: A legacy of protecting what matters

SIVASUBRAMANIAM: That's an interesting point. Because I think a lot of what you're talking about is on a day-to-day basis, and how could the site supervisors and the builders there and control those risks at the same time? You know, if we take a step back and put ourselves in the shoes of the builder themselves as they plan things, that they allocate capital.

We have more and more data available and tools available to help them actually forecast not just today, tomorrow, but also in the short term, medium term, in terms of how weather patterns are changing across the U.S. and across the world.

So, we could see, for example, in areas which for example, right now have very limited extreme heat exposure, but we can see in five to 10 years that increasing significantly, we have pockets like that for sure.

Like was wildfire and so forth. A business owner, a construction builder, should be thinking about these things as a way, where they want to build and if they want to build in certain locations, what type of things do they need to take into account.

So obviously, together with our underwriting partners, Zurich Resilient Solutions offers our spotlight solution, which really helps with this as well. Where we look across many, many perils across many different scenarios and really can zone into a very micro level at site level to help owners really allocate capital better in the longer term.

So, kind of maybe a pop quiz for you guys. So, do either of you know when we hired the first risk engineer within Zurich group, either of you know this by chance.

STOHLMAN: Probably 1950 as a guess.

SIVASUBRAMANIAM: Well, Alicia, what do you think? I'm curious.

PAVELKO: I'm going to go a little earlier than that. I'm going to go 1945. Closest without going over.

SIVASUBRAMANIAM: Honestly, I'm baffled by how well you guys answered that. Because it was literally around that time. So, it was post-World War II and when we had the “economic boom” in the “building boom.” So, the reason we had it is because we had so many buildings going up, especially in New York area, so forth.

As a result, because a lot of unsafe practices, we were seeing a lot of worker injuries and tragically worker deaths as well. So that's actually why we started bringing engineers in-house to help our customers avoid those losses, avoid those really sad circumstances.

So, it reminds me, we talk about extreme heat a lot of extreme weather events. What are some of the things we customers should be thinking about and be proactively addressing when it comes to protecting employees? I'd love to hear your thoughts on that, workers so forth.

STOHLMAN: I'll answer that Aroo.

There are all kinds of technology out there for the workers. So, wearables, I'll just go through a few examples with the wearables. The wearables now are so sophisticated they're either on WIFI or cellular or other, but you can check the vital signs of your workers. The heart rate, their body temperature—the body temperature is real, real critical.

If you're working in Arizona, you can get overheated real quick, but knowing the core temperature is really impactful to say, "Hey, I just got alerted that Doug's body temperatures reached its max. That person needs to take a break and go into like a cooling station."

And just fluid loss. The hydration is so key when you're working outside. You could have somebody come in over the weekend just not hydrated for one reason or another, and then they're going to start working in the heat already at a point with lack of hydration. And so, you need to have that person now really hydrate to get to back to the baseline.

So, all of these sensors and wearables, monitor this worker fatigue. There are sensors out there that monitor that if a worker gets hot, they get tired. When workers get tired, there's accidents. These wearables also are so sophisticated now, they can predict a lightning storm, a tornado, a temperature change, a rain event, and wind. And so, a lot of technology has come a long way for all our contractors to adopt.

SIVASUBRAMANIAM: That's super cool. Recently I was at a construction site with one of your team members Doug. I remember, one of the suppliers came by sharing the new helmets with cooling systems and so forth. Yes, the smile on the workers' faces were. It was a relief to them, and it was very hot day in Chicago. So, you can imagine?

STOHLMAN: Sure. Yes. And they also have cooling tents. Those are really popular.

Cooling tents are not just a pop-up tent like you would think about. It's really an enclosed tent that has air conditioning. It has water, ice, food and a table. You can take a break. There's a lot to be built in to avoid some of the high-risk weather events such as heat that we have today.

PAVELKO: Hey, Doug, I've been hearing a little bit about some changing legislation from a federal level, also state, and then local from OSHA with respect to heat standards and trying to get some more stringent protocol in place to protect workers. Can you talk a little bit about that?

STOHLMAN: Yes, sure. I'd love to. So, OSHA, Federal OSHA, has a heat and illness regulation. So, all states have to adhere to it. So, I live in California. California always goes above and beyond, but at a minimum, each state has to adhere to that. So, it requires them to monitor the temperature outside. There are two triggers involved with it. So once the temperature gets 80 degrees, that's the first trigger for the worker. The project now has to provide cool drinking water, ice cool down areas.

As Aroo was talking about, shade tents and fans. That's kind of the entry level point of cooling off workers and they could have misting fans as well. Then once it gets to over 90 degrees, that's kind of a bigger trigger. And now you're talking about mandatory 15-minute rest breaks every two hours and observation systems to monitor heat and illness on site, and you have to have an emergency response plan.

What happens if somebody has a heat stroke? You have to know what to do. What are the signs of a heat stroke? Contractors must train the employees on all of these standards and risk factors and also the symptoms. So, so that buddy effect that you look at your coworker and they don't look good. And so now you have to identify the signs of heat stress, and all these OSHA standards impact all the contractors. You need more resources; you need more programs and oversight at each one of these projects during the summer months.

Strategies for Resilience, Sustainability, and Integrated Planning

SIVASUBRAMANIAM: Very interesting. I'm curious, right? So, we're talking a lot about extreme weather, obviously it's evolving, it's dramatic, we know it. At the same time, our customers are evolving too.

So, builders are evolving so forth. They're not just looking at the build itself for success, but they're also looking at the completion of it and how that succeeds, right? So, can you talk a little bit about what that means, and from that point of view, when it comes to extreme weather, what should the builders and customers be thinking about there?

PAVELKO: I'd love to address this one from my perspective. It's really neat the transition that we've seen from our customers. So, where a contractor at one point in time just said, "Hey, I'm going to build this asset as quickly and inexpensively as I can. I'm going to turn it over to the owner and I'm going to get out of there." Those days seem to be over. Yes. We see our contractors, our owners, really collaborating and thinking together about the sustainability of the asset of the community in which they're building that asset and the longevity of the asset. We even see some go as far as thinking about the lifespan of the asset and planning, at the time of build, how they're going to de-commission it at the end of the life.

So once again, we see a lot of integrated planning with the owner's fixed property carrier and thinking about how do we pick the right materials that are resilient to climate risk today, but then perhaps in 10 years or in 30 years. Based on some of the anticipated climate change models, how do we make sure that the actions we're taking today will prepare us to be successful in the future?

PAVELKO: So seeing that planning, seeing that thoughtfulness has been a really, really neat kind of transformation in the marketplace and in the environment.

STOHLMAN: Yes, and I could add to that too, Alicia, you have to integrate these protections in the design phases, and as you build and during these weather vents you have to build in temporary structures and closures. When it snows, rains, or gets wind, where does material go? You know, covering it up with plastic sheeting or tarps that's a minimum thing you can do. If you can bring it inside all the betters and the equipment is so expensive and you got thousands and thousands of dollars sitting there, and equipment and materials that need to be covered up and hopefully inside during these extreme weather events.

Also you have to plan for roads. You need to have drainage at the project. You need to have backup systems, and maybe you need swales and, and all kinds of things. You have to provide pumps for below grade excavations a basement, a garage, anything below grade needs to have some sort of water, temporary water to be able to be pumped out. So there, there's a lot that needs to be integrated into the design and the owner side and the contractor side.

Risk Mitigation and Parametric Insurance for Construction Projects

SIVASUBRAMANIAM: Well, cool. No, very interesting. And it's always amazing to see that evolution with our customers and naturally leads to better. Right. I'm curious, it feels like we've been talking a lot about all the changes in some of the, I'd say, downsides of it, but I know, you know, Alicia, Doug, both of your teams are working really hard to also help customers have solutions. So in general terms, can you talk a little bit about what Zurich is doing to help customers best prepare for stream weather?

STOHLMAN: I can take a few key aspects. You have to have a very aggressive, robust risk mitigation plan. It needs to be automated needs to be very comprehensive from start to finish. You don't start a risk mitigation plan halfway through the project. You need to look at it early on during the pre-project planning aspects of it. So, it really has to be well thought out and then well integrated throughout the project.

Also, as you kind of go through and do your assessments at the project level, there's always room to improve. You're seeing various trends that may be that are going on. You need to kind of adjust those plans to that specific project based on those weather events. So, in my opinion, really at the end it's reducing weather delays, property damage, and then keeping our workers safe.

PAVELKO: Yes, and I'll just add on to some of the things that Doug mentioned. So, from an underwriting perspective, we want to know, and we want to hear about all of those pre-test plans that you have put into place to deal with the climate risk or the extreme weather risk that you may face on your project.

So best practice would be to integrate that as part of your submission when you're submitting your project to your carrier. Don't wait for your underwriter to ask to go ahead and be proactive with that information, show that you know what the risk is and that you're proactively addressing it. Another thing that's really neat, that's come out of this emerging trends, these emerging risks is product development. So, at Zurich, we heard from our customers and brokers that they were having a lot of delays triggered by just everyday weather events.

So, it just kind of was rainy, too rainy to work, or it was too windy to set steel and it was triggering a delay in the completion of the project, but it didn't actually cause any physical loss or damage, which is a traditional trigger for a property or a builder's risk insurance policy. So that led to the development of a construction weather parametric product that we're now offering at Zurich.

So again, these new hazards that we're facing has led to some really unique and thoughtful product development and different ways to transfer that financial risk from the contractor back over to the carrier. So really need to see these evolve as we're faced with different hazards day in and day out.

SIVASUBRAMANIAM: I know there's a lot of excitement about the, the parametric solution and, certainly for extreme weather, you know, that screams like a natural fit, right? Yes, so —

STOHLMAN: If I could, I'd just like to maybe add something that to Alicia's point, scheduling is really key to all of this. We're fortunate not to have too many losses with that product, but you have to build some flexibility into the project schedule. It's really key that you build in alternative work plans. What I mean by that is, you know, when are you going to — when are you going work inside that needs to be planned? You do start working inside during January and December. You have to sort of plan for that. You don't want to be caught outside during the winter. And can you do offsite work? Can you do anything with prefab during those, those months where you have a lot of rain and wind events that maybe make the project inhabitable for doing work?

SIVASUBRAMANIAM: Thanks, Doug. we should definitely talk about some of the extremely solutions we have on the engineering side too. So, in addition to planning, there is the climate spotlight tool we offer, right? And it is for builders, contractors, designers to really understand, at a very granular level, various different exposures they might have today and five years from now and onwards.

Sometimes we think extreme weather is, you know, 50 years down the road, but you open up a newspaper literally every day. There seems to be one event somewhere just in the U.S. alone, and then of course there's Canada and the whole globe, right? So, we really need to understand that I feel like customers they're learning more and more, but it's here today.

SIVASUBRAMANIAM: I feel like that's the one part that we need to help our customers understand and as a result of it, plan their project, allocate their capital appropriately, you know, and to really be successful themselves, right?

Alicia, Doug, thank you for joining us today and thank you for listening. If you like the show, leave a comment or review wherever, get your favorite podcast or drop us note at media@zurichna.com. Stay tuned for our next episode of our Extreme Weather miniseries, where we talk to Adam Aronson, founder and CEO of Arrowsight about top extreme weather risks that C-Suite leaders and investors need to know this has been the future risk presented by Zurich North America. Thank you.

1. Extreme weather cost $2tn globally over past decade, report finds, The Guardian, 2024.
2. Assessing the U.S. Climate in 2024, National Centers for Environmental Information, 2024.
3. Impacts of extreme heat to California’s people, infrastructure and economy, 2024.