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February 16, 2006

LEED

Careful what guarantees are offered

LEED Canada to get insurance industry input

Designers and other professionals working on green buildings need to be cautious they aren’t offering guarantees they cannot back.

A Canada Green Building Council task force is reviewing a LEED credit’s wording, prompting attention from insurers specializing in building engineering and architecture.

“You’ve heard about the declaration forms which are required as part of a submission for LEED credits. They may expose designers to uninsured liability,” cautioned John Hackett, a risk manager with Pro-Demnity Insurance Company in Toronto. Hackett was a panelist at a recent discussion called LEEDing towards Durable Building Structures and Envelopes, which was sponsored by the Cement Association of Canada and devoted in part to a durable building credit.

“Architects and engineers simply cannot guarantee the outcomes or the performance of a building and its systems,” he said. “If they do, their insurance policy doesn’t cover it. It’s an exclusion.”

LEED certification credits include life expectancy of a building’s exterior. Exteriors have been LEED credits since the program went national in December 2004.

Hackett said professionals who respond to a request for proposal for a LEED Silver design, and who fail to deliver, could be deemed to have promised to meet that standard.

Predictions of long-term economic savings are also typically excluded from liability policies.

“There’s a tendency to suggest it will cost a bit more up front but for sure you’ll get it back,” Hackett said. “It’s implied that there’s a payback at the end. You have to be particularly careful not to confuse modeling with a guarantee of economic return.”

The problem is rooted in aggressive promotion, Hackett said.

“We have a growing body of professionals who have put a gold braid on their epaulets, billed themselves as LEED-accredited professionals and, in essence, are suggesting to the uninformed observer that they now have a level of specialization and enhanced capability above the ordinary architect or engineer. It’s great marketing, but has the potential of shifting the standard of care ... which determines negligence in court.”

Hackett said designers shouldn’t sign anything that deals with elements of a project that they haven’t actually done or controlled. “Designers can’t deliver the actual construction. They can’t guarantee the properties of a manufactured product.”

He recommended owner involvement in an integrated design process. It should involve all parties leading to collective thinking which, in turn, can help weed out problems that would otherwise slide through.

Hackett said he plans to commence communication with the CaGBC “on a program to get the insurers as a group to review all the credits and offer some commentary to try to make sure that LEED isn’t building unnecessary pitfalls.”

Bob Marshall, who is chairing the CaGBC durable building credit task force, said the organization welcomes dialogue.

“We think we’ve fixed the liability issues with the durable building credit, but the insurers now want to look at all the credits and see what kinds of liability issues there are. We started something, got it solved, and now we want to look at all of the liability.”

The durable building credit applies only to Canada and does not include mechanical units or building interiors.

“We’re not discouraging you from doing durable mechanical units, but these should be pursed as an innovative design credit,” Marshall said.

“We wanted to keep the focus on ... preventing building envelopes from premature failure.”

Marshall said he expects the CaGBC will accept the new wording for the durable building credit in principle in the next few weeks.

“We’ve all got so excited about durable buildings that we’re going to work on a new credit for durable building interiors. We get buildings that get a flood and get condemned, and we get other buildings that have floods and are back in operation in a day or two. The difference is the materials they use.”

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