Australia’s business landscape is being defined by significant changes in governance, regulatory environments, and risk management.
Residential construction: Growth, cladding claims, and regulatory reforms
Australia’s residential construction sector is set to grow, with 1.2 million homes planned over five years. However, challenges like labour shortages, supply chain issues, and insolvencies remain. In Victoria, cladding claims are rising due to the Atlantis Towers case and approaching deadlines.
Mergers and Acquisitions (M&A) activity and Warranty and Indemnity (W&I) claims surge
A resurgence in M&A activity is expected to increase W&I claims, particularly in sectors like energy, technology, and financial services.
Shifting priorities across DEI and ESG
As global trends impact Australian businesses, there are signs of a shift in the focus on DEI and ESG initiatives.
Increased scrutiny on financial institutions and D&O risks
Financial institutions face growing regulatory scrutiny, including the FAR and climate-related financial reporting. D&O will also see heightened accountability for governance failures, market misconduct, and cybersecurity risks.
Proactive risk management and strategic compliance will be essential to navigating this challenging environment.
Andrew Moore Head of Financial Lines +61 2 8273 9943 andrew.moore@wottonkearney.com
Raisa Conchin Head of Professional and Financial Risks +61 7 3236 8702 raisa.conchin@wottonkearney.com
3 standout insights across professional and financial risks
Residential construction: Growth amidst challenges
Australia’s residential construction sector is set for significant growth, driven by government commitments to build 1.2 million new homes over five years from July 2024, alongside major transport infrastructure projects. Labour shortages, supply chain pressures, high builder insolvency rates, and shifting regulations remain key challenges.
Insurers, legal professionals, and construction businesses should prepare for workforce gaps, rising costs, and regulatory shifts. This trend reflects a booming market with substantial opportunities, and is expected to continue growing into 2026.
Regulatory and litigation pressure: Rising compliance obligations
Regulatory reforms are increasing compliance and legal exposure across construction, financial institutions, and corporate governance. Examples include statutory duties of care for construction professionals, ASIC enforcement of design and distribution obligations, and climate-related financial disclosures for companies.
Organisations must strengthen compliance processes, maintain thorough documentation, and proactively manage risk. This trend reflects a broader push for accountability, with claims, W&I notifications, and litigation expected to continue growing into 2026.
ESG and DEI: Shifting corporate priorities
Corporate focus on ESG and DEI is evolving amid geopolitical pressures, economic constraints, and changing global norms. Some Australian companies are slowing ambitious sustainability projects, while mandatory climate disclosures remain in effect, and proposed DEI reporting requirements have been scaled back.
Boards and executives should navigate these changing expectations while balancing shareholder interests and regulatory compliance.
This trend reflects a recalibration of corporate responsibility strategies and is expected to remain a key focus into 2026.
“While there are thousands of climate change-related claims, very few claims against directors and officers personally have materialised. The softness of the D&O liability insurance market has also meant that insurers are less focused on climate change as a risk.”
Global Directors’ and Officers’ Survey Report 2024/2025, WTW
Australia’s Energy Transition: Legal liability trends in Renewable Energy Projects
Australia is rapidly transforming its energy sector to meet ambitious emissions targets – including achieving net zero by 2050 and reducing emissions by 65-75% by 2035. Supported by strong policy frameworks, bold state-level commitments, and over $9 billion invested in clean energy in 2024 alone, this transition is driving substantial growth in renewable projects across wind, solar, hydrogen, and battery storage.
As these projects grow in scale and complexity, new legal trends and challenges are emerging. That’s why we’ve launched the first in a four-part series – Australia’s Energy Transition: Legal liability trends in Renewable Energy Projects.
Developed with insurers and renewable energy professionals in mind, this report provides practical guidance to help you anticipate risk, manage disputes, and stay ahead of what’s next.
We hope you find it valuable. If you’d like to discuss any of the insights, please reach out to Partner Marcus Saw.
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