Newer materials for green, resilient building complicate insurance underwriting

New sustainable energy products using new and emerging technology make it difficult for insurance carriers to assess risk on green building projects.

Unlike on projects using standard materials, underwriters cannot look to many years of rigorous testing to see how products perform. This makes it hard to assess risk and offer policies on projects that use advanced features such as vegetative roofs, mass timber, or advanced solar panel technology.

New technology, materials, and construction methods can bring unforeseen risks, insurance executives say. Many green buildings have novel designs compared with those using conventional construction where much has been done the same way for years and the risks are well known.

Business interruptions caused by material damage in green building construction have generated costly and complex claims. These claims concern both the expense of replacing the damaged material and the amount of time it takes to replace it, especially given current supply chain difficulties.