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Five Construction Trends and Business Insurance Implications

Jul 19, 2018

From hammers and nails to megabytes and satellites. While the construction industry wasn’t an early adopter of information technology, it seems to be making up for lost time. The biggest construction trends we see this year are based in technology, from the tools being used to the actual methods of construction. Following is our list of the top five, along with some thoughts on how they can impact business insurance.

1. Telematics
Computers and communications technology are ubiquitous. So, it is not surprising that construction firms are increasingly harnessing the combined power of both, known as telematics, in their vehicles.

Using telematics, companies are monitoring fleet workflow, vehicle location, fuel consumption, maintenance status and driver habits. Analyzing and acting on the data, firms often find ways to improve operational efficiencies and reduce costs.

Insurance writers are also able to use the data to better understand a company’s true risks. Proof of things such as safe driver behaviors, the use of equipment within designated areas only and active preventive maintenance can have a positive impact on premium costs.

2. Jobsite Tablets
In 2012, barely half of construction industry professionals surveyed agreed that mobile capabilities were important or very important. Five years later that number had risen to 83.1 percent. Now, according to the JBKnowledge 6th Annual Construction Technology Report, industry survey results suggest that “the iPad is the new hammer.”

Earlier this year, a Dallas-based construction firm reported that using iPads in the field helps the company save nearly $2 million annually. Having access to all the necessary—and consistent, up-to-the-minute—paperwork in the field is one area of savings, as online access reduces printing, errors and time traveling back and forth between on-site trailers to verify information. Companies are using the devices to document site inspections, access installation videos and instructions on the worksite, monitor weather and even tie into scheduling, estimating, purchasing and other systems.

For those using tablets on jobsites, it is important to protect equipment from damage. Consider investing in screen guards and protective cases. To avoid accidentally leaving tablets behind or losing them, invest in wearable tablet holders or RFID tracking technology.

3. Virtual Reality
Virtual reality (VR), in which a participant wears goggles or a special headset to enter an alternate world, is no longer solely the domain of gamers. It is increasingly gaining acceptance and use by educators, medical therapists, designers, trainers and others. For construction professionals, VR may be a game-changer.

Planners, clients, contractors and subcontractors no longer need imagine what a finished project will look like, based on a flat drawing. With the ability to see virtual buildings in 3-D, with a 360-degree line of sight, everyone can more easily share a common vision of the space and how it will function. Needed corrections or desired changes can be identified sooner, improving efficiency, reducing cost overruns and improving customer satisfaction.

VR is also beginning to be used to manage risk. For example, construction companies can use the technology to simulate dangerous situations employees might face and reinforce safety procedures before workers enter the jobsite. Insurance companies may use it to better understand and make recommendations about specific risks and how to mitigate or finance them.

4. Modular Construction
For some types of projects, the ability to build off-site and assemble on-site offers advantages, not the least of which are increased scheduling efficiency and decreased time spent on the construction site. However, this technology-enabled process also brings risks.

From a building perspective, modular construction requires superior project management and control processes. The decision to use modular construction techniques must be made early in the project, and production must be exact to meet requirements in the field. Otherwise, a project can quickly stall and exceed the planned budget and timeline.

Even more than understanding the rigor of the process itself, companies need to know who owns which risks at which points in the process, and what laws apply. For example, if modules are damaged in transit, does the loss belong to the builder, or to the buyer? If the modules are constructed in one state and assembled in another, what happens if there are conflicting state statutes, licensing requirements, labor agreements or OSHA standards?

5. Robotics and 3D Printing
What once seemed like science fiction is closer to becoming reality: technology-automated building construction, also known as additive manufacturing. This building process combines computers, specialized 3D printers (extruders), and various types of building materials such as quick-curing, polymer-reinforced concrete, sand layers hardened with binders and even extruded metal sheets. The process is being considered for building everything from quickly constructed, low-cost shelters to homes in outer space.

Those pioneering and promoting this technology application cite many reasons to be excited. For example, homes could potentially be built in hours or days rather than months. Jobsites would be quieter and safer. Fewer materials would be used in this process, reducing waste and environmental impact. From a design perspective, the new technology would accommodate shapes that are difficult to achieve with traditional construction methods.

While the possibilities seem promising, it is unclear how well these innovative structures will withstand time and the environment. New building standards and codes may need to be developed to govern nontraditional building methods.

Keeping Pace with Change
As new technologies change the construction industry’s landscape, it will be important to understand how those changes impact your risks and business insurance. Hylant’s construction experts can answer your questions and help you stay ahead of emerging trends.

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