Authors:

Mark CoatesDirector - Strategic Industry EngagementsBentley Systems

Chris WalkerFounderBe the Best Communications

BENTLEY GOING DIGITAL i3P BLOG – #1

Digital construction data will make people safer and solve the problem of rising insurance premiumsBy going digital, insurers can work with asset owners and the supply chain to stop the indemnity threat to Britain’s construction industry

Insurance is the one of the few things that you buy and hope that you never have to use.As a country with a commercial property market worth more than GBP 880 billion and a residential market worth GBP 7.29 trillion—a combined equivalent of almost two-thirds (63%) of Britain’s entire net wealth – it’s understandable why it’s more fi nancially important than ever to protect our assets.

However, given the value of property and, more importantly, the safety of people, insurers now want to ask more questions.

We have seen the disastrous effects of failing infrastructure, such as the Grenfell Tower fi re in 2017, the collapse of the Viadotto Polcevera Bridge in Genoa, Italy in 2018, and the Whaley Bridge dam in Derbyshire bursting just last year.

Not only do insurers want to safeguard property and infrastructure investments, but they also want to help protect lives.

Two months ago, media outlets reported that insurance premiums for building contractors, architects, and surveyors have been rising by triple digit percentages.

David Stocks, construction professional indemnity (PI) broker at the insurance company Gallagher, explained that, for building contractors, premium increases could vary from 10% to 300% and 400%, with the average between 50% to 100%.

A spokeswoman for the Royal Institute of British Architects said that, “a doubling or tripling of premium is not uncommon.”

i3P BLOG – #1 2

According to the reports, insurers are now increasingly excluding cladding from PI policies, which protect construction professionals against negligence claims.

Some insurers have pulled out of the PI insurance market altogether, as several years of losses and the shortage of insurers have contributed to the rise in prices.

The sources said that the diffi culties in fi nding insurance could affect refurbishment and construction projects, including the UK government’s targets to increase housebuilding.

Many questions are asked of asset owners when they’re buying or selling a property, such as location, local environment, condition, energy effi ciency, and running costs.

However, until very recently, asset owners haven’t been asked detailed questions about elements like cladding.

Insurers are now asking clients to fi ll in more detailed questionnaires about cladding and, in some cases, are cutting the limits on the cover that they will provide or increasing the excess that clients must pay.

How long until insurers ask more questions about the condition of interior fi xtures and fi ttings?

Do asset owners and facilities managers know the make and specifi cation of the fi re doors and fi re extinguishers fi tted in their buildings? Are these items checked and maintained, and the maintenance details logged regularly?

Going forward, digital construction data will be critically important to solving the problem of rising insurance premiums.

Last year, the UK government released its “Building a Safer Future” proposals, setting out new rules and clearer responsibilities for those constructing or managing buildings that are six or more storeys high.

The document proposed new duties of care that apply during the entire lifecycle of a building—from design to construction, management and occupation—including evidence gained through regular inspection, reviews, and maintenance of the building.

The UK government has rightly determined that the solution to making us safer is the creation of a golden thread of accurate and up-to-date information about the design, construction, and ongoing maintenance of buildings.

All of us should feel safe in the structures where we live, work, and travel.

And while the UK government has understandably focused its initial efforts on multi-occupancy and higher-risk residential buildings, it is not diffi cult to see the direction that these efforts will eventually take.

The reality is that one day, the golden thread of information will need to apply to all signifi cant commercial and residential buildings and infrastructure.

The implications of this reality are huge and will be a signifi cant driver towards rolling out BIM on all projects so that construction companies, asset owners, and their insurers will have full understanding and visibility on the exact specifi cation, make, and model of a building’s fi xtures and fi ttings.

A phased implementation of insurance disclosure could help to drive the roll-out of digital construction and create a digital map of most of Britain’s critical infrastructure and high-rise commercial and residential buildings in the space of a few years.

It also empowers us with the information to make these buildings more effi cient and sustainable.

Furthermore, it will also drive investment in connected data environments so that asset owners can log and store this information to answer insurers’ questions.

If insurers are reassured about the constitution of Britain’s buildings, infrastructure premiums will fall.

The solution is going digital, as well as the asset owners investing in BIM and connected data environments as routinely as they buy insurance.

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