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.

New York City has two very large buildings dedicated to answering the 911 calls of its five boroughs. With more than 11 million emergency calls annually, it makes perfect sense. The second of these buildings, the Public Safety Answering Center II (PSAC II) is located on a nine-acre parcel of land in the Bronx. It’s an imposing 450,000 square-foot structure—a 240-foot-wide by 240-foot-tall cube. The gleaming aluminum cube risesthe equivalent of 24 stories from behind a grassy berm, projecting the unlikely impression that it might actually be floating. Like most visually striking structures, the building has drawn as much scorn as it has admiration.