How the Key Bridge Collapse Continues Reshaping Infrastructure Insurance

The 2024 collapse of the Francis Scott Key Bridge in Baltimore, Maryland was a wake-up call for public entities and insurers alike, challenging long-standing assumptions about the risks of insuring large public infrastructure projects.

A year later, the market is still experiencing the fallout as major carriers reduce coverage limits and pull out of certain infrastructure categories altogether. Public entities have been left to cobble together coverage from multiple carriers, often with significant gaps.

Many carriers that haven’t historically handled these asset types are entering the market to fill the gaps. Understanding the current state of the market—and public entities’ pain points—is vital for insurance professionals across all roles who may be handling related policies and claims for the first time.

Understanding The Rise in Infrastructure-Related Insurance Cases

In the past, infrastructure insurance followed a relatively predictable model. A small group of major carriers absorbed most of the risk for large infrastructure, often assuming 50% or more of a policy’s total limit.

That made it possible for municipalities to secure full coverage from just one or two insurers, with risk typically concentrated around localized damage—such as the failure of a single bridge span. Key Bridge followed this model, with a single insurer taking on a significant portion of the policy.

But when the entire structure gave way in March 2024, it exposed the scale of potential losses and the limitations of previous risk models. Now, those same insurers are capping their exposure and scaling back participation, forcing municipalities to rely more heavily on layered coverage in which multiple insurers share risk at different levels.

Many insurers are also reducing the limits offered through excess coverage layers, further complicating efforts to secure sufficient protection for large infrastructure. Meanwhile, some insurers have withdrawn from high-risk infrastructure categories altogether. Certain types of infrastructure are becoming nearly uninsurable, with movable bridges — like drawbridges or lift bridges — often flagged as too risky.

The current risk landscape is complex, but infrastructure’s historically low loss ratio still makes it appealing to many carriers. A growing number of carriers will likely continue to engage in this market, starting with a measured approach that limits exposure.

Claims Delays And Documentation Gaps: What to Expect Moving Forward

When working with public entities to secure coverage, insurance professionals should expect extended timelines and delays.

Most public entities lack immediate access to the engineering assessments required by insurers. That’s because before the Key Bridge collapse, most major insurers conducted and owned their own infrastructure evaluations. Now, municipalities must supply their own third-party reports, and years of underfunded maintenance programs have left many with outdated documentation or gaps in repair history.

Budget constraints further complicate matters. While public entities have traditionally based their insurance budgets on the prior year’s spending, premiums are rising significantly—and municipalities are struggling to keep pace.

Some are scaling back coverage or self-insuring portions of their infrastructure, while others are redirecting funds toward maintenance projects just to meet pre-coverage requirements. Many insurers now require municipalities to complete infrastructure improvements before offering coverage. Whether it’s repainting steel structures to prevent corrosion, repairing minor concrete cracks, or conducting full-scale maintenance projects, these costs come directly out of public entities’ already-tight budgets.

These shifts yield new challenges for insurance professionals. When public entities self-insure a portion of their risk, coverage gaps may not become apparent until a claim is filed, leaving municipalities responsible for a larger share of the financial burden than anticipated.

This lack of clarity can lead to delayed settlements and complex claims negotiations—and insurance professionals must be prepared to navigate this intricate landscape. By understanding how self-insurance, layered coverage structures, and municipal budget constraints impact insurance outcomes, professionals in the industry can help municipalities manage expectations and recover losses more effectively.

A New Era of Infrastructure Insurance

The infrastructure insurance market is undergoing a significant shift. Long-standing assumptions have been upended by large-scale losses, while reduced carrier participation is forcing municipalities to adjust their coverage strategies.

As layered policies, budget-driven coverage gaps, and new asset types become more common, insurance professionals must be prepared to navigate evolving expectations and processes. That requires a clear understanding of how public entities operate, where coverage limitations may emerge, and what documentation may be required before writing a policy—or resolving a claim.

While the market is changing, public infrastructure remains a relatively low-risk space. With awareness of shifting conditions and the right expertise, insurance professionals can play a key role in helping municipalities secure appropriate coverage.

Johnston is the National Public Entity Practice Leader for Amwins. He joined Amwins in 2013 and also serves as an executive vice president in the Amwins office in Atlanta.

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