From Construction to Operations: Where Transition Risk Really Bites

Takeaways from Aon’s Natural Resources Insights Forum 2026

The transition from construction to operations is no longer a neat handover moment. For large natural resources projects, it is an extended, high risk phase shaped by new technologies, phased delivery models and increasingly complex insurance interfaces.

Insights shared by Aon’s Construction team and representatives from Swiss Re Corporate Solutions at Aon’s recent Natural Resources Insights Forum offered a consistent pattern in their portfolios and case experience: many transition losses are driven less by unforeseen hazards and more by misalignment — between contracts, delivery sequencing and insurance intent.

A changing risk profile at handover

Today’s projects bear little resemblance to those delivered a decade ago. Hybrid renewable power systems, battery storage, autonomous fleets, digital twins and increasingly sophisticated processing technologies are now standard features of large assets.

While many of these innovations support safety and long-term efficiency, they also introduce unfamiliar failure modes during testing, commissioning and early ramp-up. At the same time, project delivery models have evolved. Phased handovers, early operations and sectional completion are now commercial imperatives rather than exceptions.

From a risk perspective, this has stretched the traditional boundary between construction and operations. The result is a growing grey zone where responsibility blurs, insurance programs are put to the test and claims often become more complex.

“Transition risk isn’t just about new technology — it’s about when risk of loss actually ends and begins. That’s rarely as clear as people think”

– Robert McNab, Engineering & Construction Portfolio Leader, Swiss Re Corporate Solutions

What claims data is really showing

Claims experience suggests that most material losses surface early in operations, particularly where design assumptions or commissioning processes fall short of reality. These are not catastrophic tail events; they are operational failures that reveal themselves quickly once assets are pushed toward nameplate capacity.

Common themes observed by Aon’s Construction team and our market partners include:

• design or specification issues that only become apparent under load
• incomplete or compressed commissioning programs
• maintenance responsibilities shifting before capability has fully transferred
• equipment warranties at risk of expiring before testing begins due to project delays.

Based on our portfolio experience, a notable change in the initial operations and testing and commissioning, is not a sharp rise in claim counts, but an increase in claim complexity — often linked to misaligned responsibilities and coverage around the construction to operation transition.

“If something is going to go wrong, it usually goes wrong early. The dispute is rarely about what happened, but rather which policy is meant to respond”

– Tyler Wilson, Claims Specialist, Swiss Re Corporate Solutions

Where handovers break down

A carefully planned and disciplined process can help manage risk of failure. Projects with clearly defined testing plans, responsibility matrices and commissioning criteria tend to transition smoothly, whereas projects without these safeguards often rely on assumptions that unravel once something goes wrong.

From an insurer’s lens, risks tend to escalate when:

• testing and commissioning periods are underestimated or arbitrarily capped,
• mechanical completion is treated as operational readiness,
• assets are put into early use while contractors and original equipment manufacturers (OEMs) remain on site,
• or operational policies are triggered before construction risks have truly ended.

“Don’t hand the asset over just because you can. Make sure the contract, the risk profile and the insurance are genuinely back-to-back”

– Mary-Catherine Hamill, Head of Construction – Australia, Aon

The insurance interface: gaps are designed, not accidental

Many transition gaps are entirely preventable. Standard testing and commissioning clauses, generic durations and poorly aligned expiry triggers continue to expose projects at handover — particularly where delay in start-up (DSU) cover is expected to transition seamlessly into operational business interruption.

Contract works policies are not designed to absorb extended operational risk unless explicitly structured to do so. Likewise, operational industrial and special risks (ISR) policies may not cover assets still subject to construction phase obligations, subcontractors and commissioning risk.

When delivery strategies evolve — as they almost always do — insurance programs must evolve with them. Assuming the policy will “follow the project” without deliberate redesign is where many projects encounter avoidable risk.

“The policy usually does exactly what it says — the problem is that the project no longer looks like the risk it was written for”

– Milos Obradovic, Construction Placement Leader – Australia, Aon

What better transition looks like

Safer transitions are not necessarily achieved by buying more insurance. They are supported by earlier engagement, clearer alignment and deliberate design.

Projects that manage transition risk effectively tend to:

• engage brokers and insurers early, often at Financial Investment Decision or earlier,
• design insurance around delivery strategy rather than retrofitting it,
• align contractual milestones, completion definitions and policy triggers,
• scenario-test handover points before they occur,
• and treat transition as a phase, not a date.

Sharing how a project is likely to evolve — even when details are incomplete — enables better decisions and reduces downstream disputes.

Key takeaways

• Transition risk is a phase, not a moment. Testing, commissioning and early operations are where design assumptions meet reality — and where losses most often emerge.
• Misalignment causes most losses. Gaps form when contracts, delivery sequencing and insurance programs evolve independently.
• Early operations need deliberate design. Contract works, DSU and ISR policies will not align automatically without explicit structuring.
• Clarity beats complexity. Defined testing plans, responsibilities and handover criteria can help to materially reduce disputes and loss severity.
• Early engagement enables better decisions. Collaboration at FID and through delivery supports resilience and helps protect long-term asset value.

With industry-leading capability in construction and operational risk, Aon is designed to deliver insurance and advisory solutions that are scalable, innovative and aligned to the needs of the largest and most complex natural resources projects. Find out more or contact us to discuss how we can help support a smoother move from construction to operations.

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