Green Building Risks: It's Not Easy Being Green

Abstract

Building "green" and seeking certification are becoming necessary considerations for any construction project or construction improvement. The benefits and risks associated with building green will be explored in this article, and insurance solutions are offered. Certified green structures should provide healthier environments to work and live. Productivity should increase and sickness and absenteeism should decrease. The popularity, importance, and number of green building projects will continue to increase. However, green building also involves increased litigation risks associated with design, construction, ownership, and operation. This article will explore those risks, and insurability of such claim exposures. Many of those risks are insurable; some are currently uninsurable.

Sustainable Construction Risk Perceptions in the Kuwaiti Construction Industry

“…Unforeseen circumstances in execution of the sustainable project [51] More complex construction techniques [60] Safety issues [61] Project delay [55] Contractors' inexperience with sustainable buildings [57] Incremental time caused by sustainable construction [59] Construction defects [53] …”

“…Cost is always a concern and represented in both the external and finance categories through a lack of market demand and associated with payback period and cost overruns. Project certification was also identified as an incentive for pursuing sustainable construction and a possible barrier [53]. Energy models that do not align with actual energy performance are increasingly problematic in new sustainable buildings [54].…”

“…Lack of quantitative evaluation tools [59] Cost estimation inaccuracy [46] Not achieving client expectations [55] Payback period is too long [60] Difficulty in the selection of subcontractors who provide sustainable construction services [51] Performance problems since sustainable building projects face a greater potential in failure (causing liabilities) [53] Poor interrelationships between supply chain partners [26] Increased soft costs due to delays in sustainable building completion [53] Lack of upfront planning by all parties [17] High cost of sustainable materials and equipment [51] Sustainability measures not considered early by stakeholders [52] Cost overrun due to lack of sustainable building knowledge [61] Delays in resolving disputes [26] High initial sustainable construction costs [26] Slow approval processes due to sustainable specifications [26] Investor cannot fund the high sustainability measure costs [61] Outdated contractual agreements [62] Costs of investment in skills development [57] High sustainable construction premiums [17] Material…”

“…Challenges for operating renewable energy systems [63] An event that causes the loss of certification [53] Unacceptable performance of modern technologies [61] Lower certification than what was expected due to design defects [53] Technological failures [61] Changing certification procedures [61] Misunderstanding of sustainable technological operations [59] Loss of financing or losing loans for not achieving certification [53] …”

“…Design changes during construction [55] Lack of market demand [56] Slow response to meet design changes [26] Lack of political support and incentives [49] Design-team inexperience [57] Lack of public awareness and knowledge [58] Design defects which could result in failure to achieve certification [53] Uncertain governmental policies [19] …”