Explainers

BIM bytes: Insuring professional risk

2 June 2014 | By Assad Maqbool, partner, Trowers & Hamlins

An important way to manage the risks associated with involvement in any project is to insure against the losses that would arise should any risks crystallise. Professional indemnity (PI) insurance is a key risk management device for any professional involved in the construction industry. So what effect should involvement in BIM projects have and what practical steps should be taken?

The Construction Industry Council and insurance broker Griffiths & Armour issued a best practice guide last year which suggests that the use of BIM (at Level 2 and without the use of integrated project insurance) is unlikely to require particular policy endorsements.

The guide’s opinion is that the use of BIM should reduce risk because clashes and other issues should more readily be identified during the pre-construction phase. A consultant may still be liable for the delays or costs of any necessary redesign caused by its failures, but this should be relatively inexpensive in comparison to a design issue being detected during construction.

I would add that the proper use of BIM relies on an orderly pre-construction phase, where each member of the project team has clear obligations to input design in accordance with an agreed protocol and programme. The lack of such an orderly design phase is often the trigger for later problems and disputes.

Arguably, the clear audit trail of responsibility created by the “version control” inherent in the layering of a BIM model, as well as the possibility of a BIM model being used for the long-term management of an asset, means there is a greater potential for an error in a consultant’s work to be highlighted.

The principles of an insurer’s concerns will remain constant: is the insured carrying out services within its technical capability and does it have proper systems for managing risk? In this, an insurer should be interested in the detail of the consultant’s services.

The insured has an obligation of “utmost good faith” to disclose to insurers any facts that may be material to the insurer’s decision to insure. Therefore, on a consultant’s first involvement in BIM, it should consider notifying its insurer. In doing so, the consultant should ensure it has properly considered the detail of the services it is required to perform, has good evidence of capability, has considered any risk involved in carrying out its services, and has a clear plan as to how that risk should be managed.

Arguably, the clear audit trail of responsibility created by the “version control” inherent in the layering of a BIM model means there is a greater potential for an error in a consultant’s work to be highlighted.– Assad Maqbool