It Ain't Easy Being Green: The Unique Risks of Green Construction-and How to Overcome Them

The problem increases because there are some architects who are extremely well qualified to talk about sustainability and green design, and there are others who aren't. Even if a professional has the ability to give advice on green design, he needs to make sure that they keep their education current because there is so much going on and things are changing day by day.

You have another set of problems when an owner has a set of expectations about green design, and the design that the professional has created may conflict with what the owner wants. It's pretty complicated. What we've been doing is offering risk management advice, writing on the subject, and giving seminars.

AA&B: What differences have you found between green and traditional construction? How can these differences create challenges for agents, and how can they deal with the difficulties?

Parsons: There are many differences. If a person wants a green roof, you have to calculate the weight of holding the soil and plant life on the roof, you need different systems to seal the roof, and you need different membranes to keep the water out. You have to be educated in the industry.

While there are differences in the materials used, any new product is risky because we don't know how well it will last. For instance, people originally used bamboo floors in green design–they were said to be very sustainable. But they did not wear well. People were replacing them within 3 to 5 years, which was not their expectation.

One of the problems when producing a green design is weighing the difference between the upfront costs of investing in the product and the long-term maintenance costs. There is additional service required in green design, which may lead to higher fees. Clients are surprised to find that it costs more upfront, and then the unpleasant surprise is when some products used don't actually yield long-term operating savings. When you have unmet client expectations, you get claims.

Right now, with different methods of construction and use of different materials, you not only need a design professional who understands design, but also knows how to choose the proper materials. It is common in the construction industry to make substitutions. A contractor will say a certain product is better, cheaper or will yield long-term cost savings, but it is not as green. There is the normal tension between the design professional and contractor as they go through the process, but it sometimes creates more work for the design professional.

Many design professionals are interested in getting Leadership in Energy and Environmental Design (LEED) and other certifications, and we've talked about having some of our underwriters get LEED certifications–it's very doable, even for those not in the design profession. But it's just the beginning.

Our brokers who handle design professionals have been receiving a lot of education so they can advise their clients. Some of them actually put together seminars, borrowing from those of us who are doing research, and are giving advice to their clients, communicating an awareness of the risks. I think any agent who says that they are involved in the green industry needs to keep educating themselves regularly.

There are insurance companies that specialize in design professionals and put out a lot of information. A couple of these agencies have stocked information on their Web sites about some of the risks and hazards. Things keep changing–for example, well over half of the states have statutes or executive orders promoting green design. Depending on where you are, you need to research what is going on in your state that may mandate using equipment, lighting or products that produce a savings. So brokers really need to look at what their state is doing.

There are a number of clients who have mandated green design. Green design is very popular in the residential and commercial world, because often LEED-certified buildings can charge higher rents because it's popular to be green. A lot of the green buildings promote a health savings, some of which have not proven to be true because these products have turned out not to be as green as we hoped. As a broker, you have to be aware. Many local components of professional societies for design professionals are very conscious of these matters, and interested brokers should make them their first stop to learn about what is going on in their area.

AA&B: How are you helping architects, engineers and contractors avoid the risks that specifically come along with green construction?

Parsons: We're doing a lot of education. We give seminars and webinars on green design, and hopefully we will do podcasts in the future. We also have been networking at industry conventions to talk about green design and help raise awareness on the issue.

We have a scholarship that we give to an engineer so he or she can study and research with us, using the claims statistics that we have. It's in our best interests because if we can prevent claims or at least make claims for green design more defensible, it translates into better prices and more sales in our program.

The two most important things to tell design professionals are to help your clients manage expectations and to be very careful about making any statements that can be construed as a warranty.

Design professionals need to stay up-to-date on the legislation in the state or jurisdiction where they are building, and they need to read professional societies' codes of ethics, because a peer will testify based on those standards. They also have to be very familiar with certification systems, such as LEED, so they understand the different levels and what it takes to get there. They have to review all advertising and marketing to make sure they're not overselling what services they can actually provide. They should document an owner's expectations with the design professional's response so they can discuss what a realistic outcome is. If a client has unreasonable expectations, we say one of the best things to do is not take the job. You can sometimes see a claim coming.

AA&B: Is your company making any steps toward green technologies?

Parsons: Like many companies, we are interested in being green. We started with simple things, like putting recycling bins in for cans and paper. We are in the middle of a plan to go paperless. Parking comes with our building, but we charge everybody who parks and then help subsidize some of the people who use public transportation. We're looking at creating a satellite office so people don't have to commute as far. Our cups are made from recycled paper around the office, and printing is done with paper that also is recycled. We try to practice what we preach.

AA&B: How has the housing slump affected the construction industry? Has it put any hold on the growth of green construction?

Parsons: The housing slump has not impacted the strong move toward green design. Of course, when fewer units are built, there are fewer green buildings–but there are plenty of renovations centered on green design.

We base ratings on a firm's billings, and billings have been reasonable in the commercial sector this year, though we've seen a falloff in the residential sector. Next year, I think commercial is going to follow in the slump. This still hasn't put a hold on the growth of green design. I visited Seattle this year and saw a couple of projects that were very green, and I was amazed and proud of American innovation. Developers have actually taken some chances on some very innovative design. So it's still growing.

Educate Yourself–Resources on the Web

o The U.S. Green Building Council–www.usgbc.org
o The Green Building Institute www.thegbi.org and www.greenglobes.com
o The American Institute of Architects www.aia.org and www.aia.org/walkthewalk
o The American Society of Landscape Architects www.asla.org
o American Society of Civil Engineers www.asce.org
o American Society of Heating, Refrigerating and Air-Conditioning Engineers www.ashrae.org
o Architecture 2030 www.architecture2030.org
o The National Institute of Building Sciences–Whole Building Design Guide www.wbdg.org
o The Environmental Protection Agency–Energy Star program www.energystar.gov

Lorna Parsons, Hon. AIA, is president, chief underwriting officer and managing director for Victor O. Schinnerer & Co. Recently, she participated in AIA's Integrated Practice initiatives and moderated sessions at the AIA and AISC conventions.