In part one of this series, I mentioned several ways in which new technology has the potential to advance safety. For instance, as drones and other automated machinery replace certain job functions that today humans exclusively perform, this could conceivably lead to a significant reduction in workers’ compensation claims.
While emerging technology may in several instances make the construction site a safer place, the same advances may simultaneously present entirely new safety concerns.
New Safety Concerns
The previous section addresses the importance of material quality specifically as it relates to 3D printing and prefabricated modular building. If the pieces that are “put together” on site are subpar, this could also have serious safety implications. Take, for example, the 12-story hospital in Dayton, OH that was once hailed as an advance in technology–a project now known for a Legionella outbreak allegedly resulting from water pressure tests and water introduced in the modules before they were transported to the hospital site.
There are also public safety concerns stemming from the increased use of drones, which include bodily injury to humans and animals. For example, a drone en route could collide with a building, a car and/or a person, causing bodily injury and/or property damage
One of the primary concerns related to the liability exposure from emerging technologies is the inherent inability to actually define and articulate the scope of liability. This ambiguity is probably most apparent with cyber-related issues (which will be discussed in more detail later) and drones.
For instance, standard liability policies (CGL) may not even cover the liability arising out of drone use, as most CG policies excludes liability arising out of the insured’s “ownership maintenance or use” of an auto, aircraft or watercraft. And while the Federal Aviation Administration (FAA) has made progress, issuing new proposed regulations for the operation and certification of small unmanned aircraft systems (i.e. drones) this past February, such legislation is still evolving, resulting in ambiguity that has impact on legal matters as well as insurance requirements and coverage issues.
Manufacturing and Product Risks for Mechanized Machinery
Today in addition to traditional lines, many contractors protect themselves through professional liability, which often varies in form language. But as the lines between human work and machine work start to blur, so may the lines between product liability and professional liability.
As cars lose their drivers and drones perform inspections instead of people, there is a high likelihood that manufacturing/product risk may take over what was previously mostly construction risk defect. There are several areas of concern that have to do with the mechanics of a drone or any of the aforementioned machinery that is now being mechanized. These include malfunctions related to a design flaw or improper manufacturing. Such defects could potentially result in product and completed operations exposures.
We also may see a change in the way that we view professional liability. With 3D printing, modular building and the associate importance of material quality as noted above, there is a chance that procurement and specifying materials may become part of the construction professional service arena.
A relatively obvious property concern around the automation and mechanization of so much construction equipment is the potential mechanical and/or navigational malfunction. While there is the potential for a drone or driverless bulldozer to go on the fritz and fly or drive into a person or animal, there is a higher likelihood that they will crash into a building or personal property.
Theft may prove another area of escalating concern. As construction sites today are already at a high risk for theft, the risk may increase as machines and processes become more mechanized and there is less and less human presence on the site.
Responsible Parties Ambiguity
With the liability issues that may arise as described above, there may come with them questions about the responsible parties. For example, if a driverless bulldozer runs into a building, or a drone crashes into a person, a claimant may sue any number of parties. If the crash were the result of negligent operation of the drone, the owner/operator might be at fault. But if the drone crashed because of a defect or malfunction, the designer or manufacturer of the drone and/or the software designer or manufacturer might be responsible.
Another drone-specific risk that has gained some attention of late is the risk related to potential invasion of privacy through the use of drones. Concerns relate to not only intentional surveillance, but also the potential for unintentional capturing of images such as a homeowner’s likeness captured in the course of inspection of a nearby construction site. Another potential privacy risk is that operators may intentionally or inadvertently capture or transmit personal, non-public information such as intellectual property, trade secrets and other confidential data.
Financial Risks due to Changing Business Models
New technology in construction will undoubtedly begin to holistically change the way things get built. And while some of the processes may be more efficient, the transition to this new way of working will come with inherent risk. For instance, changes in job sequencing and scheduling while using combination of mechanized and non mechanized work can change exposure. Prefabricated modular building relies on a supply-chain strategy, and construction traditionally has not been a supply chain industry. Project managers may require training in this arena, from knowing how to ship materials to creating a skid rack. All of this can affect schedules, increase cost of work and thus have potentially significant financial implications.
This post was written by the Willis Global Construction Industry, main contributors including John Roberts, Mike Phillips, and Jeff Burns & Kathryn Harb.