Building Information Modelling and Insurance

BIM and the Future

• Building Information Modelling (BIM) is being promoted as the way forward for the planning and construction of major infrastructure and construction projects.
• The Australian government has not mandated for the use of high level BIM in government projects, however, a number of other countries such as the UK, Singapore and South Korea have. BIM is also mandatory in a number of European countries.
• In these countries, the mandatory BIM level required is usually Level 2. Level 2 is defined as a series of federated models prepared by different design teams put together in the context of a common framework for the purpose of being used for a single project with licences granted to other project team members to use the information contained in the federated model. (NBS Roundtable 12 July 2012).

Cheaper, quicker and better buildings

• In theory BIM leads to cheaper, quicker and better buildings primarily because BIM allows the resolutions of construction difficulties in a virtual model before construction and for more accurate calculation of quantities for tendering.
• In order to provide the b
  etter use of BIM, several associations or groups have produced standard BIM protocols for the exchange of data and information. A prominent BIM advocate in the UK is the National Building Specification (NBS), and the Construction Industry Council (CIC).

BIM in Australia

• In Australia the Government has undertaken a National Building Information Modelling Initiative to investigate and promote BIM implementation through groups such as buildingSmart, the Australian Construction Industry Forum and the Australasian Procurement and Construction Council. These groups and others such as NatSpec have published model protocols for use in implementation of BIM in construction projects in Australia.
• Software packages now exist to support the efficient exchange and storage of data for multi-party use of BIM, so the technical development of BIM is progressing and is well catered for. The increase in skilled BIM staff will also allow for its greater use.

Legal and Insurance Issues

• It was recognised however at an early stage that BIM would present a number of legal issues especially relating to the types of contracts required, liability and intellectual property rights. Participants were also concerned about the liability of information sharing in relation to current insurance provisions.
• Research in the UK has led to a general consensus that the existing suite of construction contracts adequately provide for the use of BIM protocols up to and including level 2 albeit with some minor changes. There is also consensus among insurance companies that professional liability is adequately covered by the current professional indemnity policies and there is no need to change the insurance modelling for BIM to level 2 (Best Practise Guide for Professional Indemnity Insurance When Using Building Information Models CIC 1^st Ed 2013).
• In fact, it is thought that there is a reduced risk in BIM modelling as the problems associated with onsite construction should be addressed more frequently during the creation of the building information modelling scheme.

Establishing Stability

• It is, however, acknowledged that where BIM modelling is undertaken at level 3 or greater, it is difficult to determine the work that is undertaken by each party and therefore the liability that party has for that work. To address this issue a new insurance scheme has been produced in the UK called Integrated Project Insurance (IPI) which is designed to encourage more collaborative models of procurement and project delivery (The Integrated Project Insurance (IPI) Model 2 July 2014).
• The first trial of IPI commenced at a new Centre for Advanced Technologies building at Dudley College in the UK in December 2015. The aim of IPI is to provide adequate insurance cover for the collaborative alliance contractual arrangements. At present we are unaware of a similar initiative in Australia, however, it is likely that the successful implementation of the UK scheme will flow on to Australia.
• For those businesses involved, or looking to be involved, in BIM projects in Australia it is advisable to notify your insurance broker of the nature of your involvement in the project so that they can assess the risk and advise on the appropriate level of cover.

Kreisson is also able to provide advice to contractors on their contractual arrangements where BIM is required.

This communication is sent by Kreisson Legal Pty Limited (ACN 113 986 824). This communication has been prepared for the general information of clients and professional associates of Kreisson Legal. You should not rely on the contents. It is not legal advice and should not be regarded as a substitute for legal advice. The contents may contain copyright.