The cost to rebuild Baltimore’s Francis Scott Key Bridge has soared to as much as $5.2 billion, shaking up the insurance industry and highlighting new challenges for those covering major infrastructure projects. The original collapse occurred when the container ship Dali lost power and hit a support pier about 20 months ago. Initially, estimates for rebuilding the bridge were around $2 billion, but rising construction costs, stricter safety measures, and more demanding engineering requirements have pushed the price tag much higher.
Maryland transportation officials have now pushed the expected completion date back to late 2030, two years later than initially planned. This delay and cost increase mean insurers face more risk than ever before when it comes to infrastructure projects. The Francis Scott Key Bridge has become a revealing example of what the future may hold for insurance companies dealing with large-scale construction losses.
The collision that caused the collapse also brought up questions about liability, especially for the ship’s insurer and the Protection and Indemnity (P&I) club that backs it. Since the rebuilding price has surpassed $4 billion, the liability claim could become one of the biggest marine insurance claims in U.S. history. Reinsurers, who support these clubs, are already preparing for widespread effects on their agreements across multiple years.
The insurance issues don’t stop there. Builders risk insurers now have to cover longer construction periods and higher costs. The bridge’s redesign includes stronger protections to avoid another accident, which adds complexity and expense. Surety companies, responsible for performance and payment bonds, also face increased pressure. Bonds in this scale are uncommon, and any political or funding problems could cause delays or defaults, creating more insurance claims.
One of the biggest challenges insurers face is inflation. Highway construction costs have risen by about 72 percent in five years. This increase pushes up the replacement cost of infrastructure like bridges and tunnels. Insurers must now accept that catastrophic infrastructure losses will cost more, delays will increase claims, and replacement values are always changing.
Politics is making the situation even trickier. The Trump administration has questioned the project’s high costs and slow timeline. It has also hinted at withholding infrastructure money from other states over contract disputes, adding uncertainty for insurers that cover government projects. Delays and contract issues can lead to claims under surety, directors and officers, and public-entity liability policies.
For many insurance companies, the Francis Scott Key Bridge case is changing how they price and manage risk on infrastructure projects. The far-reaching effects on reinsurers also signal that public-works disasters in the U.S. may now carry the same unpredictability as natural disasters.
As construction continues on the Patapsco River, one thing is clear: when a major bridge goes down today, rebuilding it is just the start of a much bigger insurance challenge.