This post is the first in a series exploring what the insurance and legal industries must do to keep pace with building innovation — and why getting that right matters enormously for the future of the built environment.
The Changing Environment & How it Will Change Insurance & Legal Contracts
Innovation in buildings is surging. The opportunities are vast, and so are the complications. Earlier posts in this blog have laid the groundwork: 92. Innovation Everywhere, but Nothing Changes explored why great ideas stall; 86. What is BuildUSA All About? painted the bigger picture; and 17. What is Building’s Problem? #$%& provided the “telephone book” analogy that captures just how Byzantine the industry’s processes have become. The intent of this series is to paint a more detailed picture of what the insurance and legal industries must do to help realize building’s brighter future.
The insurance and legal industries work to identify, mitigate risks and when these risks do occur, create viable processes to assign both financial and professional responsibility. Innovation disrupts the status quo, and the historical methods, vocabulary and documentation used to assess and assign risk may or may not be applicable. So, as innovation pushes into new frontiers and illuminates new potentials of better quality, safer processes and products, lower costs…etc. the insurance and legal industry must change at a pace that will be supportive of this change or innovation’s promise may be strangled on the vine.
How do these industries assign and weigh risk? As new tools and processes come into play, how will they reassess exposure and assign costs? Every business veteran knows that problems occur, and when they do, what separates great partners from the rest is whether they roll up their sleeves and work through it alongside you. That’s as true for the insurance, legal, and financial relationships as it is for the A/E/C/O/M team.
To bring this into focus, it helps to look at the specific issues already emerging, issues that will only multiply as innovation accelerates. And accelerate it will. As professionals in their 20s and 30s step into positions of authority, responsible for operations, business systems, budgets, client relationships, and building processes, they will move far more aggressively to implement digital systems, data standards, and both in-person and digital communication. The insurance and legal industries must be ready to support that momentum, not hinder it. Here are the issues that are coming up more and more:
- Off-site manufacturing: As more building moves off-site and CAMs (construction Assembly modules) are assembled not on the construction site, responsibility, insurance coverage and payment structures need to be clearly assigned from the point the materials are assembled in a fully constructed CAM (think pods, panels, racks) or coordinated packaged format (think Ikea furniture). This needs to be addressed within the manufacturing facility, during transport, storage on site, during placement and assembly on site, until it is fully connected with the site and building structure.
- All building is not the same, IIBOs and CIPOs: As discussed in several posts
08-The Future of Collaboration” (May 13, 2017)
52-Collaboratively Integrated Partner Organizations (CIPO) (Mar 15, 2022)
74. Collaboratively Integrated Partner Organizations (CIPOs)” (Aug 15, 2023)
82-BuildUSA – The Business Opportunity” (Apr 16, 2024)
Building is moving toward two distinct business models: IIBOs and CIPOs. The internal controls, standardization, data structures, and processes built into these models all contribute to reducing risk, cost, and time, while improving quality and performance. How will the insurance and legal industries evolve their relationships, documentation, and fees to reflect these meaningful differences?
- All buildings are not the same, Boutique, Optimized, Hybrid and Iconic:
As explored in posts:
26-The New Order (Feb 12, 2019)
55-The Building Orders – Optimized Building (Jan 11, 2022)
95. The Key Concepts & Why They Support BUSA’s Mission & Goals” (Feb 4, 2026)
Boutique, Optimized, Hybrid, and Iconic project types carry fundamentally different risk profiles. How will the insurance and legal industries adapt to their relationships, documentation, and fee structures to reflect those differences?
- Volume Sales:
As the industry gets better at creating successful Optimized building brands, and those buildings are sold and delivered at scale, the risk profile changes dramatically. How will insurance and legal relationships, documentation, and fee structures evolve to reflect a world where a single design is replicated dozens or hundreds of times?
- Data structure and Ownership:
Much of the inefficiency in the building industry stems from data that is either unstructured, structured inconsistently, or siloed — created by one company and inaccessible to others without friction. Resolving this is at the core of nearly every major innovative initiative in the industry today. As data structures become more integrated and shareable, how will the insurance and legal industries help define ownership, responsibility, and access rights across inter-company databases? And when problems arise between parties who have agreed to intimately share their STWs and data, while remaining legally separate, how will accountability be assigned?
These are just a few of the issues this series will address. The goal is straightforward: to begin aligning the business interests of the insurance and legal industries with the realities, and the promise of building’s future.
Those of you in the legal and insurance industries would love to hear your thoughts!