Does your insurance cover Level 2 BIM?

The increasing use of BIM on construction projects raises some interesting questions regarding the legal liability of the contracting parties involved in the design process. This also has implications on the professional indemnity insurance market and whether individual annual polices are able to properly respond to design issues which may arise out of the Construction Industry Council BIM protocol.

At this stage the insurance market response seems to be that Level 2 BIM should not pose any serious difficulties in terms of policy response, but there are some obvious issues that can arise:

  • The start of a BIM project is extremely unlikely to coincide with the renewal or commencement of an annual PI policy. It is important that as a construction manager you inform your broker if you become engaged in a BIM project for the first time to ensure that insurers are aware and there are no particular policy terms or conditions that could be an issue.
  • If you directly employ or designate someone within the company to be a “BIM Coordinator” or “Model Manager” the services provided by this person should fall within the Professional Activities and Duties definition of the PI policy. However, a condition of cover is that the professional activities and duties must be undertaken by a professionally qualified person (usually a chartered construction professional), or a technical person having not less than five years relevant experience.
  • The experience has to be relevant to the activity undertaken so a person with five years construction site experience may not be experienced in design coordination. It is unlikely at this stage of BIM that many BIM coordinators have that level of experience.
  • The levels of cover available between the various contracting parties will not be consistent. For instance the insuring clause of a PI policy could be written on a “civil liability” basis such that it is capable of responding to non-negligent claims. However, most contractors’ PI policies have insuring clauses written on the basis of a “negligent act, error, or omission”, which would mean claims based on a fitness for purpose allegation are not covered.

In a Level 2 BIM, the individual design team members continue to prepare their individual architectural or engineering designs using their own 3D software packages and feed their individual model packages to the BIM coordinator or model manager, who combines these into a fully developed BIM model. Although the lead consultant is likely to take on the role of model manager, increasingly the building contractor may take on this role as the model can be a useful tool for procurement of materials, resource planning and operation and maintenance issues.

The use of BIM cannot completely eliminate the possibility of design or contractor error.– Bob Paterson

The use of BIM cannot completely eliminate the possibility of design or contractor error. In 2011 a widely reported case in the US concerned a life sciences building at an unnamed university where BIM had been used to coordinate the M&E services within a roof void and which had to be installed in a specific sequence to fit. Unfortunately when the contractor had installed 70% of the equipment he realised that the rest of the plant would not fit. According to Engineering News Record, the problem was that “the design team never discussed the installation sequence with the contractor, and the contractor wasn’t sophisticated enough to understand the importance of assembling the components in a certain order”. BIM, of course, should reduce the possibility of such issues arising in the life of a project, but it’s not a panacea.

The Government Construction Strategy also foresees the eventual arrival of fully integrated Level 3 BIM, where all of the project team contribute towards a single fully integrated model, rather than developing their own models individually.

This raises the question of identifying responsibility if something goes wrong and clearly there will be a need for full traceability and restricted access requirement to be able to identify at a later date who made any changes and when.

From both a contractual and insurance perspective, this joint responsibility for the design and implementation of a project should lead to more partnering contracts to reflect the multi-party nature of the collaborative design. As the design team will be working under these partnering contracts, then rather than having individual annual PI policies with different levels of cover and timeframes, the obvious solution would be for a single project insurance policy.

This type of single project policy is already common for contract works cover and may be increasingly used on larger projects to incorporate design liability to address the issues that are raised by BIM, as it becomes more integrated into construction projects.

Bob Paterson is a chartered civil engineer and loss adjuster and director of Walsh PI, part of the Triton Global Group which specialises in the defence and handling of professional indemnity claims.

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