Early in my career, while working closely with construction companies, I found that joint ventures (JVs) were relatively rare. They were usually reserved for unusually large or complex projects, where the risk, capital requirements, or technical scope exceeded what a single contractor was willing to undertake alone.
Over the past 15 years, I’ve seen his approach change. What were once situational collaborations have steadily become a common and often necessary way for contractors to perform and deliver work. Today, JVs are no longer the exception. In many markets, they are becoming standard practice.
From my perspective, working alongside contractors across the country, this change reflects how construction projects are now being bid, staffed, secured and executed.
Bigger projects and bigger expectations
Today’s projects are bigger, more complex and more demanding than even a decade ago. Owners are consolidating scope, accelerating schedules and transferring more risk to contractors design-offer-construction and other alternative delivery methods. At the same time, bond, insurance and working capital thresholds continue to rise.
Many contractors are excellent builders, but are understandably wary of overstretching their balance sheets or leadership teams. Joint ventures allow companies, including direct competitors, to combine financial strength and expertise to pursue opportunities they would not be willing to take on alone.
Geography and specialization drive collaboration
One of the most common drivers of joint ventures today is geographic scope. While a contractor may have deep expertise in a certain industry (bridges, for example), their expertise does not always align with where new projects are being built.
In addition to expanding the territory of operation, JVs offer another valuable benefit, the possibility of partnering with a contractor who knows the local market. Working with a company with local expertise, access to regional workgroups, established relationships with subcontractors, familiarity with inspection and permitting processes, and credibility with property owners provides a real advantage. And, as owners increasingly value a team that has the right technical expertise AND a local presence, the chances of winning more work increase for both parties.
Labor constraints are shaping bidding decisions
Labor shortages are no longer a distant, long-term concern, as they are already affecting today’s supply strategies.
Joint ventures allow contractors to combine the availability of local labor with specialized or traveling teams, which improves workforce flexibility on projects with aggressive schedules or extended durations. Landlords are paying more attention to employment plans and insurers are doing the same. An offer that looks good on paper only works if it can actually be built.
The risk has shifted downstream
The transfer of risk to construction is not new, but the degree to which it is increasing certainly is. Today’s contracts often include aggressive indemnification provisions, substantial liquidated damages, and minimal relief for delays or unforeseen conditions.
From a risk management perspective, exposure concentration is one of the biggest 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 capability. This doesn’t eliminate risk, but it helps prevent a 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 contributed to longer programs in almost every sector.
Extended terms mean longer exposure to labor challenges, escalating costs and potentially increased insurance risk. Joint ventures help contractors manage this exposure without tying up capital, bonding capacity or leadership resources for years at a time.
Why the American world is getting involved early
At American Global, we understand these trends, because we get involved early in the client’s offering process. In most cases, even before you submit an offer.
We work with clients during the pre-bid and tender phases to evaluate joint venture structures, align insurance programs with contractual obligations and assess how risk will be shared over the life of the project. Decisions taken before the contract that is signed often determines whether a JV works as intended or struggles under misaligned risk.
The role of project closure insurance
When JVs move forward, we recommend evaluating project-specific completion insurance programs based on project size, complexity, duration, and the balance of in-house versus outsourced work.
Summaries can provide consistent coverage to all JV partners and subcontractors, reduce coverage gaps, improve claims coordination, and create cost predictability over long project timelines. Equally important, American Global handles the administrative burden from enrollment and compliance to notification and carrier coordination, allowing contractors to focus on execution rather than insurance mechanics.
looking ahead
Joint ventures do not replace traditional construction companies. They are, however, a practical response to a market that demands greater scale, deeper specialization, local presence and long-term commitment.
Having witnessed this evolution first hand, it is clear that contractors no longer see 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.
Biography of the author
Michelle A. Wesolowski is Senior Vice President and Underwriting Leader in Pittsburgh, PA at American Global and has over 30 years of experience in the insurance industry. Over the past 15 years, he has worked closely with contractors across the country, advising on risk management, joint venture structures and project-specific insurance programs. Wesolowski supports clients during the pre-bid, bidding and construction phases of complex projects
