Technology’s increasing role in construction; the skilled labor shortage; and the latest coverage, legislative, and litigation trends around the nation were topics in focus at CLM’s 2019 Construction Conference in September.
Technology was a major theme across several of the conference’s presentations. During the session, “Smart Building Technology: Is It the New Trend in Construction Defect Litigation?” panelists discussed cutting-edge construction projects that incorporate the latest in smart technologies, and the issues that can arise from that.
Regarding claims implications for these buildings, Marie Cheung-Truslow, principal and owner of the Law Offices of Marie Cheung-Truslow, pointed to cybersecurity issues stemming from the amount of data collected by smart devices in buildings. She also discussed how builder’s risk policies could be impacted if an issue during the construction phase results in some of the technology failing or not working as it should.
Cheung-Truslow predicted that the insurance industry will begin writing more manuscript policies for specialty buildings to address new risks, adding that the technology is currently far ahead of policy provisions.
In addition to smart technology, buildings today are also incorporating various types of green technologies. During the session “Unintended Consequences of Going Green,” panelists discussed potential unforeseen conditions, such as untested materials and how they might impact other aspects of a building, and the lack of expertise when it comes to installing and servicing emerging green technologies.
The panel stressed that it is important when undertaking a green construction project for contractors and design professionals to understand what the building owner’s risk tolerance is, and that is often related to the motivation for going green. Some owners may believe it will reduce operating costs, some may be complying with jurisdictional laws and regulations, some may be taking advantage of tax breaks and financial incentives, and some may be doing it out of principle.
“Depending where on that spectrum the client falls, you really want to see what their risk tolerance is, because a lot of the technology isn’t necessarily ready for primetime,” said Mark Hopkins, vice president of Guardian Group Inc.
Stephen Henning, founding partner at Wood, Smith, Henning & Berman; and Phyllis Modlin, claims manager, Markel West Insurance Services, are the co-chairs of Construction Conference. They said nearly 800 attendees came to San Diego this year. “In terms of numbers, this continues to be the second-largest conference for CLM, right behind the annual.” says Henning.
He adds, “Because of the nature of the breakout sessions, we witnessed incredible energy in the sessions—people asking questions and participating actively, which truly raised the bar on the level of education.” Henning says the regional focus of many of the sessions drew particular praise from attendees this year.
As for what caught Henning’s ear, he took interest in a point raised in the opening session by David Simons, vice president and assistant general counsel in the legal department of KB Home. “I thought [Simons] made an interesting point on the tension between providing affordable housing and the roadblocks thrown in the way of builders, particularly in California.”
Modlin, on her top takeaway, says, “There is a huge building boom that is not necessarily translating to more claims. Severity of claims has been impacted favorably because of the builders’ right to repair laws throughout the nation. Attorney fee entitlement, standing, and other legislative enactments are impacting claims.”