From initial plans to finished projects, technology is revolutionizing construction. Consider that:
— Powerful modeling software lets builders design projects in three dimensions from the foundation to the finishing.
— Smart phones and tablets enhance collaboration and communication on the job site.
— Drones take flight for surveying and other tasks.
— Wearable devices help keep workers safer.
More radical changes lie ahead as robots begin to tackle dangerous jobs, and 3D printing machines literally print structures from the ground up.
While new technologies help speed project delivery, reduce costs and enhance safety, they also bring new risks into an often traditional industry.
Potential liabilities arising from the use of new technologies may not be covered under standard insurance policies designed for the construction industry. Builders need to ensure that their risk management strategies keep pace.
Technology gets to work
Today, builders are increasingly taking a more integrated approach to project delivery through the use of a design-build model that combines architectural and engineering services along with the actual construction. This delivery streamlines the entire process and provides quicker turnarounds.
Behind this approach, ever more powerful software known as building information modeling (BIM) systems present three-dimensional representations of projects that enable all parties to collaborate using one overall model. BIM systems encompass all aspects of project design and construction, while providing a robust way of detecting potential problems, such as a pipe projected to run through a solid column.
On site, drones are beginning to have an impact, performing initial site surveys and tasks such as monitoring progress and estimating material inventories. The high-definition aerial imagery and GPS data gathered by drones can be exported back to modeling and design programs to help pinpoint areas where work may be deviating from the plans.
Related: 10 risks and misuses for drones
Wearable, internet-connected devices are enhancing safety. Embedded in clothing and equipment such as hard hats, wearables help workers avoid dangers and allow supervisors to react more quickly to accidents. Construction wearables include 'smart' hardhats; other small devices that measure how and where workers move; and clothing with embedded sensors that help prevent collisions with machinery. Sensors measure workers' heart rates, air quality levels, heat temperature and oxygen levels. Devices warn workers when they get too close to a hazardous area. Wearables can also alert a supervisor when a worker falls or is injured, and provide the exact location.
Mobile devices tie the new technologies together. Tablets and smart phones enable personnel on site to access plans and view modifications quickly, to communicate with design personnel, monitor inventory, track progress and report claims more quickly and easily.
Builders are increasingly taking a more integrated approach to project delivery through the use of a design-build model that combines architectural and engineering services along with the actual construction. (Photo: iStock)
Technology brings new exposures
While new technologies create greater efficiencies, improve safety and reduce costs, they also open up new exposures in areas including safety and cyber exposures, and raise questions about overlooked liabilities and potential gaps in insurance coverage.
As more personnel use tablets, smart phones and other mobile devices at work, the potential for cyber theft of valuable intellectual property or personally identifiable information grows. A single tablet can hold vast amounts of data or provide a gateway to improperly secured networks hosting building plans and employee information. Those heightened cyber risks mean that contractors need to properly defend their networks and ensure that they can remotely wipe data from lost or stolen devices.
Drones require new safety and compliance procedures. Drone operators must be properly certified, and subcontractors or vendors supplying drone services should show that their pilots have the proper certification. Greater reliance on drones also raises the question of who is liable if software-related errors in drone data cause problems on a job site – the drone manufacturer, the software publisher or the contractor who relies on faulty data.
Wearables create similar uncertainties. For instance, if a device fails to warn a worker about reduced oxygen levels, to what extent would the device manufacturer, general contractor or subcontractor be liable in the event of an injury? Wearables may also foster a greater sense of safety among workers, but the devices provide no substitute for rigorous safety training and cannot replace on-site safety personnel. The proper use of safety gear, such as harnesses, remains crucial as does adequate training on operating machinery and tools. Wearables do not lessen the contractor's responsibility for safety.
When it comes to claims, the use of handheld technology and wearables should expedite immediate medical responses, improving the care of an injured worker and helping to reduce the value of the claim. The data collected by such devices should also improve the timeliness and documentation of an accident site, which may help reduce or mitigate some of the claim cost.
Changing technology, evolving risks
As more builders offer design services, they need sufficient professional liability coverage for the architectural and engineering services they provide. With a growing reliance on design software and mobile devices, cyber insurance is a must not only for data theft, but also digital asset loss and business interruption due to a data breach. Technology risks reinforce the need for builders to use contracts to mitigate their exposures. Drones are often excluded from contractors' commercial general liability policies and coverage requires either an endorsement or a specific aviation policy. Contractors and subcontractors should be able to show they have the appropriate insurance with the right additional insured coverage on their general liability policies to address each scenario.
To make sure that their risk transfer program provides coverage for the exposures associated with new technology, contractors should work with an insurer that has experience in the construction industry and that understands the cyber and other risks related to emerging technologies. As contractors adopt new technology to design and build projects, their exposures will continue to evolve in the years ahead. Technology is helping to make construction safer and more efficient, but it is crucial for builders to adapt their risk management strategies as the industry embraces new ways of working.
Lyndsey Christofer is vice president of Chubb Construction. She is based in New York City, and can be reached at Lyndsey.Christofer@chubb.com.
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