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Professional liability risks raised by eco-friendly construction

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According to a recent report conducted by Live Insurance News, insurance companies have had trouble developing appropriate errors and omissions coverage for eco-friendly construction projects.

While these projects are similar to typical construction sites, "green" technology and materials used in eco-friendly designing and building are comparatively untested and are considered experimental. Due to these facts, the potential for unexpected results or groundless expectations exists. Thus, insurers have had difficulty constructing an appropriate E&O package.

The article explains that these developments have begun to affect purchasers of specialty E&O insurance, which include directors and officers, cyber risk, employment practices liability, transportation, marine and surplus.

While the eco-friendly construction has caused some headaches for insurers, one industry expert claims "green building sustainable design has been around for decades." Furthermore, he stated that professionals have been seeking more efficient and economical operations for a while, however, only within the last few years has the public and governmental focus turned toward sustainable design.

Another expert told the news site that eco-friendly construction receives a lot of hype with many buzz words associated with it, however, the real challenge for insurers is to convert these terms into contractual language so that it accurately represents the reality of a project's performance. 

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