Green Contractors: Negligent Misrepresentation

        Liability Exposures for Green Contractors


With the latitude the LEED certification process allows comes more liability exposure for you. Many contractors are so eager to try their hand in the green market that they forget about the risks. One of the most common claims is negligent misrepresentation.

Consider this example. An extremely lucrative opportunity comes along to bid for a new, multi-million dollar LEED-certified building for a famous client. You want this job but have never taken on a large green project before, so you go above and beyond to present plans for a building that is LEED-certified, highly innovative, a completely sustainable site and will save thousands of dollars in energy costs each month.

You win the bid, begin construction and then realize that what you have planned is impossible to build, given your resources. When you tell your client that you can’t deliver on all of your promises, the client may stick you with an extremely expensive negligent misrepresentation suit. They will claim you had no basis for believing you could deliver on all your design elements and promises in the first place, and, if they had known, they would have gone with another bid.

You can protect yourself from these claims with proper insurance coverage, but you can also avoid them in the first place by learning more about green construction and your limitations, improving project management and carefully managing the client’s expectations.

Green building is a growing trend, as businesses want to do their part to help the environment while lowering energy costs at the same time. Plus, green building is becoming increasingly more difficult to avoid because federal, state and municipal governments are starting to mandate it for new residential and commercial construction.

Jumping into the green movement might seem like a lucrative and logical step for your business to take. Before you go green, educate yourself to avoid costly lawsuits and common liability exposures for those engaging in green construction.