Inexperience and Unproven Products: The Risks of Sustainable Construction
Sustainable construction is rapidly expanding with the continued development of green codes and eco-friendly building materials. Championing the movement is the United States Green Building Council, whose Leadership in Energy and Environmental Design (LEED) certification system has become the benchmark for energy efficiency and environmentally safe construction.
For those who would rather live and work in a healthier environment with cleaner indoor air and lower operating expenses, hopping aboard the green building bandwagon seems like a no-brainer. Many already have. As a result, sustainable construction now has been woven into the fabric of nearly all the services offered by contractors.
But the movement brings its own set of risks, especially in the area of professional liability. Untested design methods and experimental products present threats often unrecognized by contractors. From the advent of water walls to vegetative roofing systems to "organic architecture" (design promoting harmony between habitation and the natural world), never before has so much time and expense been dedicated to bringing the outside indoors. Consequently, the exposure to water intrusion and moisture problems, the largest cause of all forms of mold and bacteria, has never been greater.
Many more traditional products are also being developed and used with little concern paid to their long-term impact on building performance. One firm, for example, used an environmentally friendly flooring adhesive on a condominium project in the Northeast United States. Weeks before the building was completed, however, the bamboo flooring began to buckle due to the adhesive's ineffectiveness. During removal of the damaged materials, the contractor realized that much of the flooring was not salvageable. It took several weeks for new flooring to be delivered and installed, causing occupancy delays for the owners. Clearly, this was the contractor's professional liability problem since the firm accepted the project then selected and installed the product based on the owner's specifications.
Similarly, vegetative roofing systems, water walls, geothermal heating and cooling systems, and solar panels all offer potential energy and cost savings. But concerns related to these products have surfaced. In one recent incident, a commercial office building designed with a vegetative roofing system began to show structural problems after a particularly heavy rainstorm. The problem was that the system was not designed or equipped to hold the weight of so much water.
Another area that must be considered is the industry's general lack of green building expertise. To meet demand, many firms are rushing into sustainable projects without properly understanding the building codes, statutes and other requirements currently being developed to address sustainable construction issues.
Staying on top of this ever-changing environment is critical to ensure a suitable standard of care and efficacy. Unfortunately, there are contractors that sometimes misrepresent their expertise or cater to the unrealistic expectation of building owners for the purpose of securing a new job. LEED accreditation does not guarantee experience or competence. As a result, those clients interested in going green have little to go by aside from the contractor's word. And on a more philosophical level, in a world of constant innovation and continually changing standards, how is an expert even defined?
LEED certification presents issues of its own. A construction project can suffer major financial fallout if the building fails to achieve a certain certification. Many tax credits and other green incentives offered by governments are tied to this designation. And if the contractor fails to design that project in accordance with United States Green Building Council specifications -- or simply cuts corners during the construction process -- there will be no tax credits, no rent premiums and none of the expected benefits from plans to market the project as a green building.
For this reason, virtually all attorneys have discouraged contractors from offering "LEED certification warranties," but some still include such language in contracts. In the process, they may be exposing themselves to risks that are not insurable. When a construction firm guarantees a building will be built to a certain LEED certification level or contractually links environmental design to occupant satisfaction, catastrophic results can occur. There are documented instances of tenants that were promised their employees would be happier, healthier and more productive in green buildings only to find that productivity was actually down after a year in their new facilities. Worker performance had little or nothing to do with lighting, air quality or architecture. And after paying a premium for promised benefits, management was soon even less happy than their employees.
The implementation of building information monitoring is also creating liability for construction firms. The process embeds contractors into the design process by requiring them to advise clients on issues including contractibility, site preparation, scheduling and sequencing. While contractors may have consulted on these concerns in the past, they generally did so more informally. Today, building information modeling has placed many contractors into the heart of these processes, expanding the risks associated with virtually anything that goes wrong -- after and before ground is broken on the project.
Conceptually, green building is a wonderful idea with many benefits for workers, companies, local communities and society at large. But reality includes many stories of unfulfilled promises. Inexperienced contractors and the unproven products they use have left many companies disappointed. As a result, professional liability risks and other downsides associated with green buildings should not just be an ongoing concern -- they should be anticipated throughout the entire design and construction process.
Jeff Slivka is executive vice president of New Day Underwriting Managers in Bordentown, New Jersey.