LEED insurance

Last week, the AIANYS Statewide Advisory Committee and the American Council of Engineering Companies of New York sponsored the 2007 Annual Joint Session on Current Insurance Issues for Design Professionals. Speakers from a number of prominent insurance companies, including Lexington, Beazley, Zurich, CNA, Liberty, and XL shared their thoughts on the current state of the insurance industry, from a softening market for professional liability insurance, to comments that several panelists made regarding the insurance coverage implications of BIM and LEED for design professionals. Of particular interest to us here at gbNYC, the entire panel agreed that the standard of care for architects and engineers is "changing rapidly," in large part due to the power of BIM technologies and the proliferation of USGBC’s LEED green building rating system.

First, with respect to BIM (which is discussed extensively in the context of sustainable design in the latest issue of eco-structure magazine), each insurer confirmed that their professional liability policies would cover errors and omissions in digital data, including BIM models. However, Lexington's representative called BIM "just 3-D CAD" and warned the audience that the true insurance coverage implications for BIM projects have yet to play out. In an interesting, though potentially sinister, twist, Beazley's panelist also noted that coverage would not extend in the type of situation where a firm hosted a BIM model on its own server, the server was compromised by some sort of hacker, and the digital model was damaged. This is not a designer's error or omission, so coverage would not be available to the architect or engineer who built the model. The same panelist noted that hidden risks are "key" with respect to BIM, and designers should guide themselves on such projects accordingly.

In terms of green projects, each of the panelists agreed that a design professional's errors and omissions coverage will not cover claims by an owner brought in the event that a LEED project does not reach the agreed-upon certification level.