David Pliener, barrister at Hardwicke Chambers: Better Together? Construction Projects, BIM and Insurance...
On any large construction project, one of the key markers of success is cooperation and coordination between the various members of the design team. As one might expect, advances in technology provide enormous opportunities for enhanced coordination. This is a cause for celebration, but brings with it real challenges for both the design team and their PI insurers.
Building Information Management (‘BIM’) is a programme which allows all the design team to collaborate on a shared digital model of the project. Many projects are already utilising BIM and by 2016 all public sector construction projects will be required to do so.
What are the Benefits?
The fundamental idea is to allow early design conflict identification and therefore to resolve issues before they cause loss and delay on the project. Implemented well, it could also allow the design team to identify value engineering opportunities as well as creative and cross-disciplinary solutions.
BIM ‘Level 2’ (which is the 2016 level required by the government) allows each consultant to issue separate 3D models to each other on a shared digital system, all of which is fed into a project model. BIM ‘Level 3’ achieves fuller integration, with a centrally hosted 3D model, which all the team work on.
What are the Concerns?
Aside from teething trouble (and the training necessary to use BIM), the main concern is that greater collaboration risks a blurring of the lines of responsibility. If there is a design error, will it be more difficult to establish whose fault it was? Also, who will be responsible for errors caused by the BIM system itself?
What is the impact on PI Insurance?
The general consensus seems to be that BIM Level 2 raises few concerns. The Construction Industry Council issued a Best Practice Guide for PI Insurance when using BIM, in which they concluded that insurers did not consider that Level 2 increased the risk profile because an adequate audit trail was built into it, allowing professionals to identify their own work. They stressed, however, that Level 3 was a wholly different matter.
They also pointed out that insureds adopting BIM should disclose it as a material fact on any policy renewal and make sure they are not accepting additional contractual obligations which might be excluded under the policy.
There has been much discussion about whether the introduction of BIM will impact on premiums, but, given the uncertainties involved, it must be unlikely that any significant changes will be made in advance of there being sufficient data available. America, Australia and Canada have all been using BIM for longer than the UK, but there is little evidence yet to suggest that claim levels (or premiums) have been affected.
One of the potential (unintended?) consequences might be a resurgence in single project insurance, which was previously considered too expensive, but which would clearly mirror the collaborative BIM approach.
David Pliener is a barrister at Hardwicke Chambers and a contributor to Paul Reed QC’s newly published book entitled ‘Construction All Risks Insurance’:
