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Integrated Project Delivery: Changing the Insurance Landscape

With more project owners demanding the use of Building Information Modeling (BIM), project delivery is necessarily carried out through greater contributions of design input by the general contractor and the major trade subcontractors. The design professionals are no longer the sole authors of the project design. This collaborative project delivery method has been called integrated project delivery (IPD). The contribution of design input from each of the various project players using IPD is a significant break from the traditional division of responsibility recognized in the standard design-bid-build project delivery method. Players who never participated in the project design now face potential risk of professional liability. Additionally, the new, cutting-edge technologies being used for BIM expand the types of risks born by the design professional if there are errors and omissions within the computer modeling system or the improper management of the computerized data.

What is BIM?

BIM involves computerized design software tools that help create a model that reflects all of the building components’ geometric and functional qualities. The general contractor and trade subcontractors provide product-specific information for building components and that data is inputted into the model, including performance specifications, connection details and cost data. However, the model is more than a mere representation of the design in a three-dimensional computer graphic. Embedded within the design programs are rules that define each of the components’ relation to the other components.

The model is dynamic: if there is a change to one component, then the computer program would automatically and immediately revise the design to accommodate the ripple effect caused by the change. During the pre- construction phase, the project team can input different design options to facilitate value engineering and budgetary decisions, material estimation, and even long-term maintenance costs of the facility. In theory, assuming that the information provided by the various project players is accurate and the rules embedded in the model are correct, BIM should reduce errors and omissions, resulting in an aggregate reduction in professional liability and errors & omissions claims. Additionally, it should reduce the demand for change orders during the project, as the design should have fewer ambiguities and inconsistencies. However, if the assumptions embedded in the computerized model prove false, the result would be a costly problem that all concerned should hope is covered by insurance.

Increasing Industry Acceptance

IPD using BIM technology is becoming more prevalent with many predicting that it will become standard. The U.S. General Services Administration’s (GSA) Public Building Service now requires BIM for submission to the office of the Chief Architect on all capital construction programs receiving design funding. One reason for the adoption of BIM was a lack of GSA staffing to review design documents and to ensure conformance to building standards.  Additionally, GSA was concerned with anticipated sustainability goals for federal buildings with respect to energy efficiency and long-term maintenance costs. GSA sought to rely upon the new BIM software tools to provide solutions to these problems.  The GSA is not the only project owner to use IPD using BIM technology. General Motors has constructed at least six projects using this delivery method. Also, the increasing use of BIM is further evidenced by the adoption of a National Building Information Modeling Standard issued by the National Institute of Building Sciences, as well as, industry recognition such as the AIA Technology in Architectural Practice’s presentation of annual BIM Awards.  The expected industry trend is that this delivery method will not be reserved only for complex projects, but rather will start being used for simpler projects on a wider scale.

This has been an excerpt of the May 2012 issue of ProNetwork News. Additional sections include Evolving Contractual Relationships, Professional Liability Concerns for General Contractors and Trade Subcontractors, and Expanded Liability Concerns for Design Professionals. To continue reading this valuable newsletter, download the full PDF version: Integrated Project Delivery: Changing the Insurance Landscape.

ProNetwork News is the latest value-added resource produced by a/e ProNet. Each monthly edition includes an informative, timely article relevant to the design industry and authored by an industry expert. Contact your a/e ProNet broker for early access to these excellent newsletters.

About the Authors: Frank L. Pohl, Esq. and James C. Washburn, Esq. are partners in the law firm of Pohl & Short, P.A. in Winter Park, Florida. The firm’s concentration in business law includes construction law, commercial litigation and real estate law, Mr. Pohl has been advising clients involved in all aspects of real estate development for over 30 years. Mr. Washburn practices construction law almost exclusively and is Board Certified in Construction Law by The Florida Bar. Additional information about the law firm can be obtained by visiting its website at