Integrating emerging technologies into commercial and residential construction projects creates challenges for builders, but also offers built-in risk mitigations brokers must consider when developing insurance coverages.
“Technology integration is big. We went from buildings that have the core function of shelter to buildings that are more like giant computers. There’s all sorts of low-voltage systems and intelligent controls which builders are incorporating, targeting higher levels of efficiency for the building automation systems,” says Thomas Strong, NFP’s senior vice president of construction technology and innovation.
“We’re seeing technology integration challenges, generally. You used to build simple warehouses, now you’re building complex distribution centres with higher tolerances, extensive power requirements, complex integration of systems. Even average industrial projects are beginning to look like data centres now.”
Safety premium
Many emerging technologies can be used to manage risk during and after construction.
That can include everything from wearables and vehicle controls that keep workers safe on site to alert systems that speed up the shutdown of water, electrical heating, or cooling systems that may be in jeopardy.
“The big trend is a smart, connected job site…you’re walking the job site with a 360-degree camera that captures the entire environment, gets automatically uploaded to a cloud system, and then the algorithms pick away at it and give you updates on, say, the percentage of complete construction,” says Strong.
“Or you have cameras pointed at your job site using AI, which automatically analyzes the number of workers you have on the site, whether or not they’re wearing their safety equipment, what equipment is active and even detecting dangerous activities or near-misses on the project.”
Such systems can save money for insureds.
“We haven’t seen this specifically in Canada yet, but down in the States, certain carriers are recognizing that companies [using] sophisticated project management systems actually manage their risk more effectively and have lower frequency and severity claim rates,” he says.
“By deploying project management systems that help to run your business, keep track of all your data, collaborate and communicate, these carriers can actually correlate this investment with less losses.”
Changing broker analysis
That has insurance brokers altering assessments for contractors that apply technological risk controls to projects, such as smart valves that control water and smart cameras that spot theft.
The goal is for clients to take on technologies that help them operate more efficiently and achieve higher productivity, but also reduce overall risk, says Strong. Doing that requires working across multiple product lines:
- Construction liability – to cover third-party claims and damage
- Builders risk – to cover theft, fire and vandalism
- Professional liability – to cover errors and emissions
- Environmental liability – to cover pollution, soil abatement and other contamination risks.
“There’s technology that can be applied to every single one of these products. We help clients understand their options to invest in both risk controls and insurance products. Risk controls may include technology that might offset and reduce the premium and deductible related to that risk.”
User-driven upgrades
Meanwhile, end users of commercial buildings want to be able to control all its automation systems “from one pane of glass,” Strong says.
Doing that requires a great deal of low-voltage wiring to control Internet of Things (IoT) systems throughout the building, whether that’s dampers on heating, ventilation and air conditioning systems, magnetic locks or other building-control devices.
“And that means buildings are becoming more complex to build,” he says.
“You’ve got to build the hospital, and then you put in all these IoT systems, the devices, the sensors and the wiring, and then you need to build the actual software [and algorithms] to…manage all these smart systems.”
Feature image by iStock/mihailomilovanovic
