As the construction insurance industry continues to grasp this boom in tech, many insurers are neglecting the traditional construction errors and omissions (E&O) exposures in favour of technology E&O, and vice versa. We’ve looked into some top tech tools in the design and construction industry that may be more exposed than you think.
Software platforms
Construction software platforms, such as Procure or Autodesk are growing in popularity because they can solve a wide array of challenges like improving connectivity, project management, data collection and key processes all in one centralised place.
With this heavy reliance on technology, it’s important to also consider what happens if the platform fails. What happens if there’s an error in the platform software itself resulting in incorrect construction drawings being sent, or even a cyber breach resulting in loss of sensitive data?
Even a contractor using the software is not immune to these exposures. Disclaimers used by several major platforms deny liability for E&O as a result of their software. Providers are not often likely to leap to a construction manager’s defense if the platform fails, or if it is disrupted by a cyber-attack on your business.
Contractors can take some refuge by their insurance provider trying to rectify any damage caused to their project and reputation, or respond to an ongoing cyber breach in order to minimise further losses.
Generative design
Generative design utilises artificial intelligence (AI) technologies to generate and explore multiple design options and to optimise project solutions. The AI learns what design elements work and what doesn’t using pre-set rules, parameters, and design preferences.
Generative design software is being used increasingly as part of the design build process. While human beings may still be involved in the sign-off processes for these AI-generated designs, the exposure to a business using a technology platform to create drawings in the first place will mean that anyone working with this software should have construction E&O in place. Broad coverage for technology errors should be included, otherwise they could risk technology claims falling through the gaps.
Modelling and virtual reality
While use of computer-aided design (CAD) and building information modelling (BIM) for construction dates back to the pre-2000s, digital visualisation in construction is heading to new, complex heights. There are an increasing number of tools for contractors, construction engineers, planners, or safety personnel to plan and visualise construction activities. Some platforms enable project stakeholders to visually explore assets in full virtual reality (VR), even when still under construction.
The reality is though, whether it be CAD, BIM, or even VR, errors and costs can always occur, from an incorrect rendering of plans, to broken contractual clauses as a result of a data breach. A huge variety of construction personnel utilise 2D or 3D electronic renderings in some form or other and therefore, technology errors coverage is essential to take into consideration.
There are many more technological advances and investments being made in the construction industry today. 3D printing of building materials or even programmed robot constructors could be a common practice in the future. As well as the multitude of construction E&O exposures faced by the construction industry, they are also faced with growing technological and cyber event exposures too.
At CFC, our design and construction policy combines E&O, technology errors and cyber coverage under a single package form. Read our brochure here.
