Higher Risks with Green Building

        Liability Exposures for Green Contractors


One of the biggest questions contractors ask is why the risks of green building are so much higher than regular construction. The answer is because of the LEED certification process and higher demands for ROI. Building owners anticipate in advance what kinds of credits they will qualify for, and if the building is unable to attain promised certification in the end, they will not hesitate to file a claim. The bottom line is that green buildings have a much more concretely defined scale of success and failure, and that means you can easily be held responsible for unexpected shortcomings.

Also, building green is very expensive. If owners are going to pay the extra money to go green, they want to see the return on that investment. With green buildings, this is a very quantifiable investment. If the heating and electricity bills are not as low as promised, clients will not be happy with the building.

The best thing you can do to protect yourself from risk is to be open and honest.

     • Create marketing materials for your company with reality in mind, rather
     than making lofty promises.

     • Do not allow clients to have high expectations for things you are not
     sure you can deliver on.

     • Pay attention when drafting or signing contracts to make sure the
     language accurately reflects expectations and realistic goals.

     • Improve your project management process to more clearly define your
     company’s goals, requirements and limits.

     • Seek insurance coverage for green-specific areas, especially for your
     green services and warrantees on green projects.

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.