1021-1029.pdf

The AIA Trust is a free risk management resource for AIA members. In its role as a risk management resource for members, the AIA Trust develops tools to help AIA members manage their firms effectively. These include current reports on liability issues addressing the standard of care, sustainability,...

The AIA Trust is a free risk management resource for AIA members. In its role as a risk management resource for members, the AIA Trust develops tools to help AIA members manage their firms effectively. These include current reports on liability issues addressing the standard of care, sustainability, metadata, fiduciary duty, and others; data on professional liability insurers and claims trends; and tips on buying liability insurance and starting a firm. In addition, the AIA Trust offers a wide variety of risk management products that include professional liability and business owners protection insurance. F or Mor e I nf o r m ati o n The AIA Trust: www.TheAIATrust.com. The Society of Risk Management Consultants: www.SRMCSociety.org. Victor O. Schinnerer and Co.: www.schinnerer.com/risk-mgmt/Pages/RM-homepage.aspx. A/E Pronet: www.aepronet.org. Professional Liability Agents Network (PLAN): www.plan.org/. 16.3 Risks and Emerging Practices Peter G. Longley, AIA, CSI CCS, LEED AP, and Sue E. Yoakum, Esq., AIA PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S Three emerging practices—sustainable design, building information modeling, and integrated project delivery—have the potential to alter liability for architects. This article will identify possible risks and the means available to help architects manage those risks. I NT ROD U C T I ON Since the turn of the twenty-first century, three ideas have emerged with the power to significantly alter the way architects do business and deliver projects. These emerging practices are fostering new understanding as to how risk management ought to respond. They are: 1. Sustainable Design 2. Building Information Modeling (BIM) 3. Integrated Project Delivery (IPD) This article will address how these three topics alter liability for architects and identify means available to help architects manage those risks. SUSTA IN ABLE DESIGN Sustainable design has its roots in the collision between the environmental movement and the rapid rise of the cost of energy, both beginning in the 1970s. What started as a countercultural movement has matured and emerged as not only fashionable to developers but worthy of being enforced by government agencies. Peter G.Longley is an architect with more than 35 years of experience. As director of operations for Tsoi/Kobus & Associates, he is responsible for the firm’s risk management and quality assurance/quality control practices. Sue E. Yoakum is an attorney and licensed architect at Donovan Hatem LLP with over 25 years of domestic and international experience in design and construction. 16.3 Risks and Emerging Practices 1021 Mainstream architects, who initially hesitated to embrace the movement, have at last determined a palatable pathway to adoption—first accepting and then espousing the notion that sustainable design is actually just one aspect of good design. They are poised to garner the many new commissions where sustainable design is in demand. On the way toward full adoption, architects are faced with new challenges regarding sustainable design. These include: • • • • Changes to owner expectations Adoption of new rating systems, such as LEED Changes in governmental regulations Development of new building materials, systems, and technologies PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S Owner Expectations for Sustainable Design ▶ Risk Management Strategies (16.1) further discusses how to identify one’s risks and manage them. The most effective risk management tool for all projects, especially those involving sustainable design, is proper management of owner expectations. One frequent theme in litigation and claims against architects is failed owner relationships, including unrealistic, inappropriate, or un-communicated expectations. Owners considering sustainable design hear much about the benefits. They imagine reductions in energy costs, reductions in life cycle costs, tax credits, and favorable financing and insurance for the completed project. The marketplace is telling them these things are possible, and some architects might even be promoting these benefits in their marketing materials—indicating how they can help owners achieve these outcomes. The sound of these benefits can establish a whole new wave of expectations. The problem with these expectations lies in what it takes to deliver on them—the reality that the architect often has little control over these outcomes. And unmet expectations equal an unhappy owner. Therefore, it is critical to manage the owner’s expectations relating to the architect’s services, and, most important, what services architects cannot provide or control. With sustainable projects, more explanation is necessary than on traditional projects. Sustainable projects offer a new dimension—a dimension that is only seen over time. Owners must be educated as to the importance of their own role in the operations of their completed project, so that sustainable design goals can continue to be met throughout the life of the building. Sustainable Project (SP) Agreements The AIA has developed a new series of agreements for sustainable projects. Using these agreement forms will help to manage the expectations of the entire project team: owner, contractor, and architect. (See Table 16.2.) TABLE 16.2 AIA Sustainable Project Agreements (as of May 2012) 1022 Risk Management A101TM–2007 SP Standard Form of Agreement Between Owner and Contractor for use on a Sustainable Project where the basis of payment is Stipulated Sum A201TM–2007 SP General Conditions of the Contract for Construction, for use on a Sustainable Project A401TM–2007 SP Standard Form of Agreement Between Contractor and Subcontractor, for use on a Sustainable Project B101TM–2007 SP Standard Form of Agreement Between Owner and Architect for use on a Sustainable Project B214TM–2012 Standard Form of Architect’s Services: LEED Certification C401TM–2007 SP Standard Form of Agreement Between Architect and Consultant, for use on a Sustainable Project • • • • Standard of care Qualifications of design team members Performance goals of the project relating to energy usage and potential cost savings Consequential damages Standard of Care The standard of care is, by nature, always changing. Having the proper clause in the owner-architect agreement is one (good) thing, but responding professionally to current changes in the design practice is quite another. Keeping current is critical because it can prevent a claim. Sustainable design puts a burden on the architect to stay current with: • Education and training in sustainable design issues, systems, and building materials • Awareness of changes to codes and standards • Awareness of what other design professionals are doing—how they are rendering their services and what sorts of services they are providing Qualifications of Team Members More and more contracts are dictating the qualifications of the design team members, requiring that some or all be LEED accredited. The problem with this language is that not all team members need to be LEED accredited for the project to attain certification. Check the language with care. The main consideration is that the architect needs to effectively manage their own capabilities necessary to deliver the services. They must employ the appropriate level of expertise to meet the owner’s requirements for sustainable design, regardless of contract language—because the standard of care has moved. Teams should be chosen with this in mind. If the expertise isn’t present in any of the team members, then it may be necessary to retain a sustainable design consultant. Performance Goals of the Project Promises of a particular outcome, in this case the performance of a sustainable project, create perfect opportunities for later litigation. Though it is reasonable to establish goals for design, there are too many factors beyond the control of the design team that can lead to failure to meet those goals. Claims against architects and engineers have been brought by owners alleging their energy costs, per-month electricity, gas, and other utility costs, are too high— more than anticipated. Typically, high utility bills are not due to design flaws, but rather are the result of how the owner operates the building—something as simple as setting the thermostat too high or failing to maintain equipment. The way to prevent such a cause for claim is to discuss the specified systems, what the design can and cannot do, and proper maintenance procedures. Any outcome in energy consumption is predicated on assumptions, and those assumptions need to be understood by the owner and facilities manager. Avoid any certification relating to energy usage, unless required by building or codes officials, and then approach with utmost caution. If an owner requires use of a rating system, such as LEED, the design program should include the anticipated certification level, and which version of the rating system will be used. Do not promise the project will meet a certain level of certification or that such level will ensure meeting specific energy consumption or usage goals. Instead, explain that the design, if built in accordance with the design team’s contract documents and specifications, will be capable of obtaining the desired certification, energy consumption ranges, or usage goals. After design, others have to build it right, agree to certify it, and then properly operate and maintain the equipment and systems. ▶ See Table 17.1, AIA Contract Documents by Family (17.5) for a more extensive list AIA contract documents, by family. Textbook definition of standard of care: Rendering services with the ordinary degree of skill and care that would be used by other reasonably competent practitioners of the same discipline under similar circumstances, taking into consideration the contemporary state of the art and geographic idiosyncrasies. ▶ Architects and the Law (5.1) further discusses the standard of care. IS S U S TA I N AB L E D E S IG N I M PACT I N G THE S TA N DARD O F CA RE ? Architects are expected to learn from prior mistakes. Acceptable design in one decade might, by ignoring lessons learned, become negligence in the next. Here is a lesson that one architect learned: In 2001–2002 we designed a building using lightweight structural concrete (LWSC) slabs for the floors and roof. LWSC is considered a sustainable product because it weighs less, requires less steel to support, and smaller footings to hold up the reduced mass. LWSC began to dominate the design industry in the mid to late 1990s because of these savings. But with more than a few projects complete and in place, unanticipated problems began to emerge—namely that LWSC holds a 16.3 Risks and Emerging Practices (continued) 1023 PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S Contract clauses to pay particular attention to on sustainable projects include: PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S I S S U S TAIN AB L E D E S IGN IM PACT IN G T H E S TANDARD OF CARE ? ( c o nt inued) significant amount of water. In 2006, the flat roof of our project began to fail, bubbling up and delaminating because of the havoc this unanticipated moisture was wreaking on the roofing sandwich. That same year, two years after our roof was installed, the National Roofing Contractors Association (NRCA) published a finding regarding LWSC, having noted a number of similar failures. NRCA prescribed a solution to the problem— the installation of a vapor barrier to lock the moisture into the concrete, protecting the insulation and adhesives from degradation. Quoting our expert that opined in our defense, without the vapor barrier the roofing insulation was constantly exposed to the presence of the moisture and heat and “curled up like corn chips,” ripping the roof apart. This knowledge, the source and mechanics of the failure—and when it was known in the industry to be a problem—is ultimately what saved us from having to pay for a full roof replacement. The issue was not just what we didn’t know, or what we didn’t do, it was when we didn’t do it. 1024 Risk Management Consequential Damages Consequential damages are those that flow from the consequences of negligent performance or a contract breach. Consequential damages can pile up so fast as to overwhelm most professional liability insurance limits. Standard AIA agreement forms recognize the destructive force of consequential damages and seek to avoid this risk through a mutual waiver—waiving for both owner and architect. In a sustainable design project this waiver takes on additional importance because of the expanded list of possible consequential damages. This list includes the many expectations that can fail to materialize: • • • • • • • • Loss of reduced energy, water, and other operational costs Loss of increased market value Loss of increased investor participation and return on investment Loss of decreased insurance premiums Loss of increased worker productivity Loss of tax incentives, credits, and rebates Loss of development credits and incentives Loss of potential increase in sales or increased revenue During contract negotiations most owner attorneys move to strike the mutual waiver of consequential damages; they want the right to litigate to recover these damages. Don’t agree to strike. These damages can put a firm out of business. It is unreasonable for an architect to be financially responsible, by means of consequential damages, to assume the risk that particular performance goals are met. This is clearly a developer risk. Rating Systems: LEED Registration Leadership in Environmental and Energy Design (LEED) has a series of rating systems devised by the U.S. Green Building Council (USGBC) and the Green Building Certification Institute (GBCI) to guide and distinguish high-performance building projects. Owners can register their projects with USGBC/GBCI, and then, by means of a rigorous administrative process, obtain some level of formal certification (certified, silver, gold, and platinum)—certification that sustainable design goals have been met. LEED creates risks for the architect, mostly that a project might fail to achieve the desired level. This becomes a very real possibility when recognizing that there is a lot that can go wrong, involving people and processes that the architect cannot control: • Design points come under extreme financial scrutiny and can be dropped due to value engineering. • Contractors must furnish materials that meet the specified performance requirements. • Contractors must participate in the documentation process. • The GBCI must accept the documentation and approve each of the LEED credits. There are additional liability concerns related to LEED projects. Projects must be registered with the GBCI to be eligible for LEED certification. Registration must be completed using LEED Online, which can only be accessed after users agree to USGBC/GBCI’s terms and conditions. Prior to 2011, if the architect participated in this registration process, they carried a perceived burden that they were there to ensure certification. In 2011, the USGBC/GBCI made online registration by architects less problematic when it released the agreement, “Confirmation of Agent’s Authority Agreement.” This agreement shifts responsibility for LEED certification and the risk of failure to the owner, regardless of who accesses the project online. Changes in Governmental Regulations The focus on sustainable design has brought forth significant changes to state and local requirements and codes. Basic due diligence requires keeping current with the newly adopted versions and the plethora of add-ons. Many jurisdictions are adopting new “green” ordinances, including the International Green Construction Code (IgCC), as well as other energy “stretch” codes. What’s new about these codes is that they are not voluntary, like GBCI’s LEED certification program. These energy and sustainability codes will be enforceable—enforceable like any other building code. As such, they will bring their own challenges. Regulations can greatly restrict the use of energy, govern the function of mechanical and electrical systems, and dictate fire safety limits that impact a whole host of new energy efficient or sustainable (“green”) building products. The new requirements ultimately affect the entire building, from the skin that leaks energy, to the mechanical and electrical systems that consume it. Taking economic advantage of these changes are the manufacturers that offer, for example, systems that consume energy only when a person is in a room, and building materials that provide for higher insulating values, making the building more airtight. Each of these systems place additional research demands on the architect. Before the architect can specify a system, they should be asking for test results from the manufacturers, confirming that proposed products and systems comply with the new requirements of the code. IgCC The International Green Construction Code (IgCC) was published in March 2012, and joined the other ICC codes for adoption by jurisdictions. It joins Title 24, California’s 2010 green construction code, or “CalGreen.” The IgCC is expected to become popular very quickly. ▶ See the backgrounder The International Green Construction Code (13.1) for a more detailed discussion of the IgCC. PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S This transfer-of-risk language becomes effective only if the owner agrees to it in writing by signing this “Confirmation of Agent’s Authority Agreement.” This executed document should be included as an exhibit to the owner-architect agreement, or kept as an important project record. Managing the risks of a LEED project (all the credits the project could fail to earn) is best accomplished by educating the owner, thereby managing the owner’s expectations. They should be kept aware of the process and the ongoing progress toward certification. Development of New Building Materials, Systems, and Technologies While the code plays a role in driving changes to building materials and systems, there are other forces at work, namely the marketplace—the simple demand for products that respond to consumer interest in environmental responsibility. Where there is the economic opportunity to convert some waste product, something that someone was throwing away (i.e., cheap) into something to sell, there is an equal demand to buy it… to know there is one less piece of plastic, metal, or paper product going into the landfill, turning consumers into good stewards of the environment. Sustainable design rating systems, such as LEED, offer credits (i.e., incentive) that focus attention and help to spawn new products and systems. These credits, to name a few, include: • • • • • • • • • Construction waste management (recycling) Materials with recycled content Certified (renewably harvested) wood Heat island effect—highly reflective roofing Low volatile organic compound (VOC) content in adhesives, sealants, paint, and flooring systems Wastewater recycling systems Renewable energy Daylight systems Innovation (i.e., anything you can imagine) 16.3 Risks and Emerging Practices 1025 New products and systems that respond to current demand create risk for the architect. Should the architect specify them? New product failure almost always results because of unforeseen exposure conditions—exposure that only time will tell. Products should be tested by time and a reasonable range of exposures to see if they perform as hoped and as advertised. Yet with the green fervor sweeping the market and the government, there is undue pressure to rush sustainable products out prematurely. The standard of care dictates that the architect has a duty to the owner to investigate and specify appropriate materials and systems, those that are both durable and functional. In the past, when there were fewer building materials to choose from (most with track records), this part of the architect’s job was easier. Using untested, new sustainable building products without a track record creates added risk for everyone. The solution to the problem of designing with new materials falls to a combination of education and communication: • Research the product as much as possible. Share this information with the owner. • Arrange for tours of recent product installations and manufacturing plants. Obtain actual user testimonials. • Share and document findings, concerns—and potential for failure. PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S Involve the owner in each decision. Document the conversation and decision in writing. Ultimately, what goes into an owner’s building needs to be the owner’s decision, having listened to the architect’s learned advice. Otherwise, if the owner has no opinion, or is uninformed, architects must be ready to answer for each decision on their own. BU ILD IN G I N FO R MATI O N MO D E LI N G ▶ Technology in Practice Overview (11.1) reviews common tools in practice and evaluates their capabilities and value to a project or firm. Building information modeling (BIM) continues to develop and is gaining widespread adoption. What started as a 3D tool used solely by the architect to generate 2D construction drawings is finding other users and uses. It is those other users now that are creating additional risk—potentially blurring the lines of responsibility for the design and construction. Depending on how the BIM for a project is developed and used, there is potential that the architect could be held responsible for construction means and methods, while the contractor could be held responsible for design. For now at least, in conventional project delivery methods (not IPD), the traditional lines of responsibility should be preserved—that is, until legal precedent suggests other ways of managing the risk brought on by the use of BIM. Properly Pitching the Benefits of BIM BIM is made to order for collaboration, allowing architects, owners, contractors, and subcontractors to share detailed design information as it suits their own needs. Architects want to see the design three-dimensionally, to understand how the engineering components are integrated and coordinated, and, as a residual benefit, to automatically generate tedious schedules and alternate views. Contractors want to use the model for quantity takeoffs (estimating), coordination of the trades, and for analysis of staging and sequencing (construction means and methods). Subcontractors want access to the data to generate shop drawings for fabrication of their work, saving drafting time. Owners want to pay only for a single model that is shared, rather than multiple and separately drawn versions—then they want a copy of the completed model to manage their facility. These benefits have indeed been realized, seeing improvements in coordination and quality, shortened project schedules, and better cost management. 1026 Risk Management In this shared environment—multiple parties accessing the model as it develops— it is possible to lose sight of who is responsible for the design. In order to clarify (and record) who is responsible for the design, who owns the model, and how it is to be used, the AIA has developed several form documents: C106TM–2007, Digital Data Licensing Agreement: to be signed by the transmitting and receiving parties, which, respectively, could be the architect and owner, or architect and contractor. This document provides space to set forth the limitations for use of any transmitted electronic data. E201TM–2007, Digital Data Protocol Exhibit: to be attached as an exhibit to a contract, such as the owner-architect agreement. While this document can relate to BIM, its “Project Protocol Table” also sets forth format requirements and permitted uses for all sorts of other electronic project data, ranging across each of the project phases. E202TM–2008, Building Information Modeling Protocol Exhibit: to be attached as an exhibit to a contract, such as the owner-architect agreement. Ownership of the BIM is defined, and an elaborate table sets forth the permitted uses of the model at each level of design (LOD). • Not everyone’s computer will display the same model in the same way—inadvertently showing data that should have been turned off, or not showing data that had unintentionally become hidden. • Inconsistent printing adds to the problem, with different machines producing unintended line weights and fonts that affect both legibility and interpretation of content. • Placing an editable drawing into the hands of another to modify and print without the author’s knowledge is an invitation to nefarious use. Until these problems can be overcome more efficiently with technology, the architect should maintain control over their own document printing and production process as a way of managing the risks. Clarifying restrictions regarding these and other unauthorized uses of the BIM should be added to the final form(s) before execution. ▶ Project Management with Building Information Modeling Processes (10.4) describes the processes that drive effective use of BIM. BIM and the Standard of Care BIM intends the overlay of the engineering trades and the architecture. But this doesn’t happen automatically. Overlay requires participation of the engineers who, in general, have not adopted BIM as quickly as have architects. Before architects employed the overlay process to all the design disciplines, several of the large construction firms instituted the practice of building their own models, accurately redrawing in all the components of the architecture and engineering. Analysis of their model enabled them to identify and eliminate a number of coordination problems during the shop drawing process, before components were fabricated and installed, thereby substantially reducing construction change orders—saving both time and money. As more architects are awakened by these benefits, they have good cause to get serious about using BIM technology. But before architects can benefit from BIM as an integration and coordination tool, they must learn the 3D software used to generate the model and also master other software add-ons that generate the clash-detection reports. Until both the drawing and analysis/reporting functions are employed, architects will merely be using a complex 3D drawing tool to make 2D drawings—thereby missing many of the benefits that BIM can provide. 16.3 Risks and Emerging Practices 1027 PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S These documents do not directly address this singularly important point: that only the 2D copies that are generated from the BIM by the architect, in PDF and paper form, constitute the legal construction documents. It remains an unfortunate aspect of computer and software technology that: BIM is already helping architects to squeeze out errors before they are built, which translates into a necessarily higher level of design performance afforded to their clients—meaning the standard of care is changing. Firms not using or underutilizing BIM on other than small projects are therefore in danger of falling below the standard of care. IN TEGRATE D P R O J E C T D E LI V E RY ( I P D ) AIA’s IPD Guide, a free download on the AIA website, provides succinct information to educate the reader about IPD. ▶ Integrated Project Delivery Overview (9.3) further discusses IPD methods as understood and practiced in 2012. PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S ▶ See the backgrounder on Integrated Project Delivery Agreements (17.2) for related information. A recent study by the AIA confirmed that many architects that are interested in doing an IPD project have wildly varying views of what IPD is and means. Some do understand it, of course, but to many, IPD means essentially just “collaborating” with others. IPD is not just an enhancement to the standard method of practice—it requires significant mind changes on the part of all participants. Architects must educate themselves and their clients about IPD. Uneducated clients are dangerous, and unmet client expectations will engender claims. As of 2012, those engaged in “pure” IPD have been few. A review of professional liability companies indicates that less than a handful of project policies have been written for IPD projects. And these projects are not contractually alike. The in-place agreements differ in form, and in legal terms and conditions. Clearly those adopting IPD are sailing into uncharted waters. On the other hand, there have been more than a few projects employing an “IPDlite” project delivery method—what the AIA calls a transitional IPD approach. The goal of these arrangements has been to seize on the perceived benefits of IPD—fostering collaboration, teaming—while preserving the traditional lines of responsibility and liability. Accordingly, the types of insurance policies covering the parties involved in IPDlite have been the same as those encountered in traditional design-bid-build projects. Several new agreement forms have been developed by the AIA for both the transitional IPD model as well as several types of pure IPD structures. These agreements set forth in detail the roles and responsibilities of the team members, and establish the legal rules to govern these relationships as well as manage disputes. IPD: A Look at the Money Pure IPD agreements are distinguished from other agreements in their “share the love and share the pain” clauses. For example, contingencies are established to provide financial incentive to be shared among the project participants. However, when the contingency is exhausted, project participants must make up the difference up to a certain limit, typically a percentage of their profit. The amount of profit at risk is highly negotiable, impacting each of the team members. The contingency fund is administered by the core team comprised of representatives from the primary project participants, including owner, architect, contractor, and key consultants or subcontractors. The core team uses the fund to pay for change orders that involve design coordination issues (including errors), or unanticipated schedule and procurement issues. The core team contingency can be allocated and used without finger pointing or determination of fault. Unspent core team contingency is split among the project participants. The percentage split is highly negotiable. Certain claims between the IPD core team members may be waived or limited by agreement. Others may be turned over to the internal dispute resolution process, the focus of which is to resolve matters short of litigation. In addition to this internally managed contingency fund, the owner maintains a separate and distinct contingency to cover scope increases and unforeseen conditions not the fault of the core team. Insurability Issues Related to IPD There is an apparent disconnect between the principles governing professional liability insurance and the IPD multiparty agreement terms and conditions. Professional 1028 Risk Management insurance is triggered on fault, that is, a finding of negligence on the part of the architect. Agreeing to pay a part of the design project’s profit per an IPD Agreement, including coverage of errors, is not triggered on fault or negligence; it is a contractual requirement. In addition, when, by agreement, architects consent to pay a portion of their profit, this payment will not count towards the satisfaction of the deductible required by professional liability insurance, unless some other arrangement is made with the underwriter. Difficulties abound here, since fault would have to be found in each instance. From the underwriter’s perspective, legislating an easy drawdown of the deductible (compatible with IPD) into the policy will likely cause the premium to skyrocket. Can professional liability insurance and IPD live together? This is yet to be determined, but some carriers are now offering IPD project-specific policies for very large projects. These policies permit the drawdown of the architect’s profits to cover internal claims through a process called rectification, changing the deductible to something called self-insured retention (SIR). Unfortunately, the few project IPD policies written thus far have proven to be costly, and the price should not be expected to come down until a claims history is established. Architects should review any such IPD project policy terms and exclusions carefully to fully understand what is and is not covered, as well as the triggers to accessing coverage. What to Do with IPD? ▶ The AIA has published case studies on projects that have employed IPD, available for free download at the AIA website. PA R T 4 : C O N T R A C T S A N D A G R E E M E N T S So, what should a firm do if the opportunity for an IPD project presents itself? How should it be approached? Cautiously. As of 2012, there just is not much actual experience out there—a few tales of success, no tales of woe, no litigation, no established legal precedents. It is reasonable to assume in a claim situation that traditional lines of responsibility and liability will emerge, absent clear changes to those traditions in the executed agreements. One should be wary of accepting any such changes. Associated risks would likely only be overcome with project IPD insurance and a clear limitation of liability equal to policy limits. To parties new to IPD it makes sense to begin with the transitional model, or some similar form of IPD-lite. Extra effort will be required to research and negotiate the many aspects that are different in the agreement form, and to consult with insurance providers in order to maintain the proper risk management strategies. Likewise, seeking involvement of appropriate legal counsel will carry extra costs—but wisdom isn’t free. Those firms that have embraced IPD with success have adopted contractual language to waive claims among the participants. This leaves only an exposure to claims from third parties. Insurance is available to cover such losses. C ONCL USI ON To an ever-changing profession, sustainability, BIM, and IPD are at the forefront of the forces bringing in unknown risk. How new types of claims from these three forces will materialize cannot yet be fully known. Given this situation, appropriate mitigation measures are also difficult to predict. Nevertheless, the tools and cautionary awareness suggested in this article can help practitioners meet the challenges of these emerging practices. There is a long way to go, but the changes thus far suggest there is hope for the future—finding a way to manage new risk. F or Mor e I nf o r m ati o n AIA’s Guide to the IgCC (International Green Construction Code). AIA IPD Case Studies, University of Minnesota School of Architecture, February, 2011. AIA’s Integrated Project Delivery, A Guide. 16.3 Risks and Emerging Practices 1029