Green-building codes have now been created for approximately 20states. New "eco-friendly" products are being created on what seemsto be a daily basis.

In addition, we recently saw the first class action lawsuit against the Green BuildingCouncil's LEED rating system, alleging fraudulent representation ofthe actual energy efficiencies and cost savings associated withLEED-certified buildings. (The lawsuit isdescribed in an Oct. 22 article in GreenSource magazine, titled"USGBC, LEED Targeted by Class-Action Suit.")

We are also witnessing the changing climate of professionalliability for architects, engineers and contractors.

Much is being written about the seemingly new "green" professional liability exposures for architects,engineers and contractors. In reality, however, these greenrisks are actually very similar to traditional construction ornon-green construction exposures, with the exception of BuildingInformation Modeling, or BIM, which we'll discuss later.

In fact, these risks are little more than traditionalprofessional liability risks, which merely have been elevated bythe innovative design, new or experimental products, and mostimportantly, much higher owner expectations for "living"buildings.

However, what is relatively new are the economic damagesassociated with traditional professional liability risk, such asthe failure to realize the expected tax credits, "green" incentivesoffered through state programs, and other related damagesassociated with revenue that is lost when a building does notachieve a certain LEED or level of green.

As professional liability claims arise from sustainable designand construction, what we are seeing right now are traditionalengineering risks with very little being "new." For example, aLEED-certified hospital was completed on time and on budget. Afterseveral weeks of occupancy, the administration reported warm andhumid spots throughout the building. After several investigationsit was determined that the heating, ventilation and airconditioning system was undersized and the ventilation systemrestricted flow to certain areas of the building--design andinstallation errors.

Are these "green" risks? Not really.

SO MUCH BEING PROMISED

Recently, a simple Google search of the words "green design orconstruction" yielded results that included statements such as"Green Design and Construction Will Save The World," "state of theart buildings that will make happier employees and that willproduce better results," and "green design offers the potential togreatly improve the sustainability of new goods and serviceswithout sacrificing performance."

If this doesn't raise expectations, what will? However, in thegrand scheme sustainable construction is a fine concept that doesrequire more long-term data and research. The fact is history hasshown that "good for us today" is not always the same as "good forus tomorrow."

The best and current example is Chinese drywall, which has madenumerous headlines in Florida, Louisiana and Texas.

Due to its alleged high sulfur content, Chinese drywall has beenknown to create a low-grade sulfuric acid and impair the integrityof internal structures when exposed to moisture.

As a result, owners must rely on qualified design professionals,contractors and product suppliers/manufacturers to provide theguidance and expertise necessary to deliver the expectedoutcomes.

The industry must also be wary of "green-washing," which is the process ofoverselling products, processes or design services that will neverperform as advertised.

To further the thought, vegetative roofing systems, water walls,geothermal heating and cooling systems, and residential solar powersystems are all innovative products that offer the potential forsaving energy and costs. However, recent issues have surfaced inrelation to the impact of weather on vegetative roofingsystems.

In one recent incident, a commercial office building designedwith a vegetative-type roofing system began to show structuralproblems after a particularly heavy rainstorm. The fact is that thesystem was not equipped to carry the weight of that much water.

BUILDING INFORMATION MODELING (BIM)

BIM is the use of electronic data to build a virtual model of abuilding or structure in three dimensions, also called digital orvirtual design.

The implementation of BIM processes is not only gaining momentumin the areas of "green" and traditional construction, it is alsoproviding a new level of professional liability to manycontractors. This is because it pulls the contractor closer to thedesign process by requiring them to directly advise and consult ona variety of construction-related processes, such asconstructability, means and methods, site preparation, and manytimes scheduling and the sequencing of work.

While contractors may have provided these efforts in the past,they were usually performed for internal use. Today, the risks areheightened since many other firms are now relying on the expertiseprovided by the contractor via the BIM process.

CAREFUL WHAT WE WISH FOR

As anyone in the risk management world can confirm, the biggestrisks are usually the ones that remain unidentified until problemsoccur. No one can deny that building "green" is a developing andevolving area within the construction industry and can have atremendous and positive impact on society. So as long as itproduces the expected results, it will continue to gainmomentum.

It also comes with risk, however. Much of that risk isidentifiable and manageable based on past experiences.

Contractors who understand and manage these risks willundoubtedly be the true experts in this growing field ofconstruction.

Jeff Slivka is executive vice president of NewDay Underwriting Managers in Bordentown, NJ. New Day is a specialtyintermediary for insurance agents and brokers with expertise inenvironmental insurance, environmental risk management andconstruction related professional liability. Mr. Slivka may bereached at [email protected].

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Green Terminology

What It Means To Be Green

The world of sustainable construction has created a newterminology that is increasingly familiar to architects, engineersand contractors, and insurers who cover their "green"exposures:

Green building generally refers to the practiceof increasing the efficiency with which buildings and their sitesuse energy, water and materials and reduce impacts on human healthand the environment.

The U.S. Green Building Council, a nonprofitagency composed of leaders from each sector of the buildingindustry, is among the groups that have set green-buildingbenchmarks that measure performance in several key areas of humanand environmental health.

LEED certification levels under the USGBC'sLeadership in Energy and Environmental Design guidelines are basedon point values assigned in these areas:

• Sustainable site development
• Water savings
• Energy efficiency
• Material selection
• Indoor environmental quality

Building Information Modeling is the use ofelectronic data to build a virtual model of a building or structurein 3D, also called digital or virtual design.

Water Walls are indoor/outdoor water featureslike waterfalls or fountains. They are used for aesthetics andtheir "soothing" sounds.

Geothermal heating and coolingsystems use of the earth's natural power (internalcooling/heating) by extracting air from wells drilled into theearth's crust. Wells can range anywhere between 300 to 3,000 feetdeep.