Building smarter? AI’s impact on claims against construction professionals

The construction industry is witnessing a transformative shift with the adoption of artificial intelligence (AI). At our recent Breaking Ground meets FutureProof webinar, we discussed the emerging themes in this area before considering the potential impact it could have on claims. You can watch the webinar here if you missed it.

This article recaps some of the key issues raised in the webinar. 

Architects leading the way

Architects have traditionally been early adopters of new technology in the construction sphere (think CAD and BIM software), and AI is no exception – they have been utilising more basic forms of AI to help with the automation of tasks like compliance checking for some time. More recently, sophisticated AI-driven software has seen significant strides in design optimisation and coordination. For example, AI algorithms were used on the Crossrail project in London to automatically detect potential clashes between structural elements of the Elizabeth Line and existing underground structures and services. This not only boosted efficiency but significantly reduced the risk of potential costly reworks and disputes.

AI in project management

Project managers are also harnessing AI by utilising reality capture and analytics platforms to monitor construction sites remotely.

These platforms use 360-degree cameras to capture real-time footage, which is analysed and relayed to project managers remotely. This offers numerous potential benefits and applications including, eg:

• Billing: To verify task completion before authorising payment to contractors.
• Quality control: Identifying defects early and ensuring compliance with standards.
• Site safety: Reducing accidents by identifying potential hazards.

This technology has been rolled out by a major construction and engineering company in the UK, which estimates that it saved over 6,000 labour hours annually.

AI in construction tasks

AI-powered technology is also now performing tasks which were traditionally undertaken by building contractors. This is perhaps best illustrated by a project in China to construct a 180m dam using AI-controlled robots and 3D printing, without any human workers on site. The project showcases AI's potential to control every aspect of construction, from material collection and transportation to paving and rolling, all monitored remotely.

Future developments in AI

AI is here to stay in the construction industry, and we expect to see an increasing use of robotic and autonomous systems moving forwards. Think automated earthmoving equipment guided by GPS technology, fully automated bricklaying robots, and collaborative robots that lend a hand with various traditionally manual tasks! At a time when sustainable building practices are also a priority, AI can help analyse the environmental impact of proposed developments, select eco-friendly materials, and optimise construction techniques to minimise waste and promote greener practices. 

Impact on claims

AI's ability to reduce the potential for human error could have a profound and ultimately positive impact on the volume of claims involving construction professionals. By efficiently handling tasks like compliance checking and design coordination, AI could help prevent the kind of breach of contract and defects claims that stem from simple oversights during the design or construction phases of a project. Taking the example of the Crossrail project, for instance – it is easy to see how the use of AI to identify and avoid potential clashes at the design stage will have reduced the risk of disputes arising.

AI-powered predictive analytics can also foresee potential delays or overspending, tackling issues before they become major problems. This proactive approach is a big win in an industry where such disputes are common. As AI technology continues to evolve, real-time site monitoring should become even more effective at catching potential defects early, allowing for quicker and more cost-effective resolutions. This should mean fewer and less significant claims.

Risks and challenges

In spite of all the benefits, AI brings with it unique risks and challenges that professionals must navigate carefully. AI can produce incorrect or misleading outputs, including what’s known as "hallucinations." These arise from flawed data predictions and can lead to defects, delays or safety hazards.

AI systems also draw on vast amounts of data, making them prime targets for cyberattacks. Data breaches can lead to the theft of sensitive information, project delays, and financial losses. As a result, construction professionals need to have robust cybersecurity measures in place to protect both the AI systems and the data they handle.

Temporary failures or malfunctions of AI systems can also cause significant disruptions on construction sites. If they fail, delays and claims may follow and construction professionals must have robust contingency measures in place.

As AI becomes more integrated into construction processes, complex liability disputes are likely to arise when things do go wrong and determining whether a fault lies with the AI model or the professional could be extremely difficult. These disputes will likely require AI experts to analyse and unpick the cause of the error, thereby adding a layer of uncertainty and potentially significant cost when claims arise.

As with all good tools, the benefits generally outweigh the risks, but those who use AI must remain cautious and vigilant about sense checking the end product.

Key takeaways for construction professionals and insurers

For construction professionals, the integration of AI to move projects forward requires a well-structured approach:

• Professionals should establish clear internal policies and procedures outlining the specific uses of AI, and the parameters for its acceptable use before implementation.
• Professionals must be satisfied they have addressed any potential data protection and/or cyber security protection concerns before using AI models on “live” projects.
• Most importantly, professionals should always sense-check AI outputs and ensure their accuracy, involving experienced team members in the oversight process. AI should be viewed as a tool to enhance processes, not as a standalone solution.

There is currently little guidance on how the courts will tackle the liability issues arising from claims involve AI, largely because there have been no reported judgments so far in relation to the use of AI in a professional indemnity context. However, as the use of AI becomes more widespread and reliance on it increases, claims will inevitably arise.

At the same time, debates will also emerge as to what precisely is covered for such claims under traditionally worded professional indemnity policies and how those policies may need to adapt and change. Look out for future episodes of our Cover Talk webinars for more on this topic.

For all these risks and challenges, the rise of AI is likely to have a transformative and largely positive impact on the way in which construction professionals work.

This article forms part of our Breaking Ground series. For more information on the series, contact Andrea Lynch.

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