Attention Architects & Engineers--Green Professional Liability Insurance Has Arrived

Argo Insurance Group of San Francisco has developed a green professional liability policy designed to protect architects and engineers involved in sustainable projects.  Information about the policy is available here.  What is unique about the policy, which is underwritten by Lloyd's of London, is that it specifically includes sustainable services in the list of covered professional services which the policy covers, including services:

provided as an accredited/certified professional in the areas of sustainable site development, water savings, energy efficiency, materials and resource selection, indoor environmental quality, and computer aided drafting and design services

In addition, USGBC members get a 5% discount on premiums. 

I had the opportunity to speak to Bill Feree, Vice President at Argos and Nate Brzovich, an Argos
Commercial Producer about the new program. Check back on Wednesday for my take on the Argo policy and what's next for the future of green insurance!

GBLB: What is the background behind the development of the green professional liability policy?

ARGO: We have a very large real estate and construction practice. We saw the development of the Fireman’s Fund green building loss policy. Then we started to work with USGBC creating USGBC chapter D&O insurance. When we went out to do marketing, a lot of the stakeholders were architects, engineers and LEED APs working on the buildings. They asked how their professional liability policies responded to green building issues. We looked at policies and saw holes. The real deficiency was not having heightened standard of care language in professional liability policies, and coverage for failure to acheive LEED accredidation, tax or energy savings. We tried to put specific language in our policy to achieve those goals. Now we are promoting it.

GBLB: Who are the underwriters?

ARGO: Lloyd’s of London is the insurer. We approached quite a few. Insurers tend to take a hands off approach and then respond. The main factor was to find an insurer that was as proactive as we are in developing a product for this industry.

GBLB: What are the components of the Green Pro Endorsement?

ARGO: We added to the standard Lloyd’s policy for architects and engineers professional liability insurance. It takes the definitnion of professional services and includes as usual and customary services those services that are encompassed by sustainable services. We wanted to make it more broad. Technical consulting, site selection, water efficiency, are all covered services.  We also specifically include coverage for guarantees and warranties of achievement of green certification.

GBLB: Is anything specifcially excluded from coverage?

ARGO:  Environmental engineers doing phase I and Phase II are not included. The carrier did not want to underwrite these services. As soon as we get this policy launched, we will be going to carriers to write specialty policies.

GBLB: When was the program launched?

ARGO: The policy became available 3 months ago. We have generated a lot of interest, there is a bit of a sales cycle because people have ongoing policies, so there is a sales cycle that has been a minimum of 12 months.

Listening To Retail: ICSC's Take On Energy Efficiency

In an earlier post, I criticized the International Council of Shopping Centers (ICSC) for a letter sent to their members critical of the National Energy Efficiency Code provisions (Section 201) of the Waxman-Markey Bill (a summary of those provisions is available here). 

Yesterday,  I had the opportunity to speak to Kent Jeffreys, Staff Vice President in the Office of Global Public Policy of ICSC about their position on Waxman-Markey and the future of retail energy efficiency. Here are selections from our conversation:

GBLB: You were critical of the Waxman-Markey National Energy Efficiency Code proposal.  Why? 

KJ: One of the problems with the overall bill is that it is one size fits all when it comes to energy efficiency. For example, how do you measure the energy efficiency of a mixed use facility? Different code standards apply, and energy consumption is determined by tenant mix—a Best Buy and grocery store are different from a yoga studio and a shoe store. Waxman-Markey's adherence to the measuring stick being the building creates problems for shopping centers.

The bottom line is that the commercial building sector would like to see the same consideration that the utilities had—their deadlines were pushed off until 2020. There are a few facts that stand in the way of rapid adoption of a stringent new code. For example, many states don’t have energy codes at all. Other states have adopted different levels of ASHRAE. Waxman Markey refers to 2004 as the baseline. Then it says exceed 30% by 2010—which is tomorrow when it comes to new building construction. It is aggressive. We think it will be be problematic.

There are ways to achieve it. Talking to the technical folks, some are already exceeding ASHRAE by 20% or more. This requires certain design changes. If you start taking out windows, you can add more insulation. Most folks can move forward at 30%, we just don’t think they can do it by 2010. It is a bit unrealistic.

That is why we encouraged our members to talk to their members of congress about how they are increasing the energy efficiency. In the real world, we cannot make them all adopt cutting edge technology. The real world problems that we run into—if they have not been totally focused on energy efficiency, they are going to get a rude awakening if the bill passes in its current form.

The second step in the Waxmna-Markey Section 201, 50% by 2015, we actually don’t know how to do. You would have to change what ASHRAE addresses in order to calculate 50%, including operations, for example. 2015 is actually not that far away. At the very end, the coal burning utilities pushed their deadlines back by arguing technologically and economically that they couldn’t meet it.

These goals were picked in terms of political effectiveness, not technological. In the House, they were unwilling to even talk to us. Therefore, we couldn’t support the overall bill.

GBLB: What efforts did you make to try to work out these issues?

KJ: I went and met with people with folks from Wal-Mart, Target, developers, and let the staffers ask questions. The letter we sent out to our members was intended to inform about the fact that this will change the way they do business. Member of congress don’t know how this will impact their local communities. If you make it impossible for retailers to keep up with the times, in some communities it means jobs are not created, new projects and major renovations will not happen. I don’t really know the ramifications for the nation, but right now, no one is building anything because you can’t borrow money. We did not conduct a study to figure out how much 30-50% energy efficiency would cost—NAIOP figured out it would take 20 year payback. Then you have to figure out how you are financing it. We want members of congress to consider this. Right or wrong, the members of congress did take into consideration the cost for utilities.

There are things we support in the bill, like the REEP program. We tried to make this program more comprehensive.

GBLB: How would you suggest regulating your industry to create more energy efficiency?

KJ: The 40% “responsible” for GHG emissions by buildings—there is an underlying assumption that reduction by buildings lead to a 1 to 1 reduction of emissions. Direct emissions from commercial buildings is more like 4% than 40%. The initial responsibility means that we should be able reduce emissions by that much which is not realistic.

Until we address the generation issue—buildings are not the source of emissions—focusing on buildings is a false hope. If you look at California, the typical shopping center is more energy efficient, because of that experience, developers are adopting those procedures nationwide. But it’s going to take time. If 201 goes into effect, there will be no effect on overall GHG emissions. It will be swamped by other factors.

We would be happy to work with congress on a natioanl net metering standard, there is a patchwork of regulations right now. This would have very direct impact on reducing energy use—if there were economic incentives.

GBLB: What about the part of your letter which criticizes Waxman-Markey on the basis of creating additional code bureaucracy--"there is no trained inspection force to oversee a national building code, so it will require the federal government to retrain state employees and, no doubt, hire a huge number of new inspectors"? 

KJ: I think it is a critical flaw that congress passes a law and leave it to the states to implement. The states are strangled—they can’t run deficit spending. I don’t think that the federal government’s grant to the states for training and enforcement is sufficient. If the federal government thinks that the states will be able to enforce this code by 2010, with this amount of funding, they are sadly mistaken. Some states are really good and others are incompetent. You can’t say it is an anti-government notion—you have got to provide the resources to the states to get this done. The answer is for Congress to slow down and reconsider what it has done, or if you are going to pass the bill as written, give the states more money.

What if the states think implementing energy efficiency evaluation is too hard? Then they may say everybody passes and you get no increase in energy efficiency.  You need standards which are realistic and can be enforced and implemented by the public. 

Missing The Forest For The Trees

Early in my blogging days, I wrote a post on the problem of green sprawl--the practice of developing "green" buildings on unsustainable sites.  Can a building really be considered green if it is built on greenfields in the urban periphery (like green Wal-Marts or Best Buys), or a single family dwelling comprising of tens of thousands of square feet? Twitterer Lauren Glasscock sent along this fabulous link to the 10 dumbest "green" buildings.

I read about a new version of this phenomenon in Chattanooga.  Apparently, Unum Group is: 

[B]uilding a $20 million project that includes a parking garage to hold about 1,450 cars which will attempt to be Leadership in Energy and Environmental Design certified by the U.S. Green Building Council.

So now the big question-- Can a parking lot for 1,450 cars ever be "green"? 

To be fair, the Chattanooga Times reports:

The garage, expected to be completed in the fourth quarter of 2010, will open the way for the sale of much of Unum's 28 acres of surface parking lots.

Mr. Watjen said property will likely be turned into development for downtown, but it is unclear exactly how it will be distributed.

A garage structure is more sustainable than surface parking lots, for the runoff factor alone.  But I question the "green"-ness of erecting infrstructure for 1,450 cars.  Is this something the USGBC should be certifying? Or does it compromise the fundamental credibility of the LEED system? 

"I"-nterview With Maureen Guttman, Executive Director of the Pennsylvania Governor's Green Government Council

Yesterday, I discussed why I thought the ICC Green Building Code project was important enough to put off my knitting lessons for.  But you don't have to take my word for it. 

Maureen Guttman, AIA,  Executive Director of the Pennsylvania Governor’s Green Government Council and Member of the ICC Sustainable Building Technology Committee, agreed to talk to Green Building Law Blog about why she felt the ICC Green Building Code Project was significant to sustainability and the Commonwealth of Pennsylvania.   

Guttman is an active leader in the architecture profession, recently serving as the Pennsylvania representative to the American Institute of Architects Board of Directors. She is a recognized expert on building codes and green building policy, and has been instrumental in the development and passage of several pieces of related legislation in Pennsylvania. 

GBLB: Why are you involved in the ICC Green Building Code Project? 

MG: I have been involved in building code stuff for years. I view it as a major obligation of the professional responsibilities as a licensed architect. Building codes are a playbook for the designers of buildings, so compliance with the codes is one of the very fundamental principles that our license is predicated on.

I believe that all architects should be involved in aggressive code awareness. This was one of the things I pushed for on Board of AIA. I think that architects who are not involved in code development and awareness are missing out on what adds value to our profession.

GBLB:  What makes the Green Building Code Project so important? 

MG: This is an unbelievable opportunity to bring together the rules of the game with respect to health safety and welfare and layer on top the environmental health which we are charged with safeguarding. The idea of tying together the tenets of building health and safety and commitment to sustainability and tie it with regulatory procedure is a very exciting opportunity for me personally and for the Commonwealth of Pennsylvania. It is a good sign in terms of our commitment to codes that there are so many of us on the committee involved in developing the green building code—Pennsylvania is obviously a player.

GBLB:  What is the future of the Green Building Code? 

MG: It’s going to be very controversial. It is such a new way of thinking that there is going to be resistence. But hopefully it will provide some uniformity in what municipalities are enforcing as a ”green building". I hope it will also help the existing rating organizations promote ever more advanced sustainable initiatives—keeping the codes on its toes.

GBLB:  What is the future of the Green Building Code for Pennsylvania? 

MG: I’d like to think the green building i-code can be adopted in Pennsylvania as part of the process for adopting new codes. I envision a lively debate on it. I hope that Pennsylvania will be one of the first states to adopt it. It may be on a roll-in or an incentive basis. I hope that Pennsylvania will be at the forefront of pushing the adoption of this code. This will be a slam dunk measure to make some climate change goals achievable, as sole reliance on market incentives may not get us as far as fast.

I Think "I" Can--Why The World Needs Another Green Building Standard

In the interests of full disclosure, I am a member of the International Code Council's team crafting a Green Building Code. 

Accoding to the ICC:

The objective of this new project is to develop a Green Building Code for traditional and high-performance buildings that is consistent and coordinated with the ICC family of Codes and Standards.

After LEED, Green Globes, BREEM, Energy Star, NAHB Green and the prospective ASHRAE 189, why on earth do we need another green building standard? Is it simply to give people like me something to do in their spare time (I had thought about taking up knitting)? The answer is definitely not. 

As articulated above, the point of the ICC Green Building Code is to be consistent with the other I-codes which most jurisdictions have adopted (or tweaked) as the basis of their building codes. Thus, builders building green buildings must adhere to two standards at least--the conventional I-Code based building code, and the green building standard.  This has caused many issues, including the waterless urinal fiasco, in which waterless urinals were prohibited under conventional code provisions.  By integrating a green building standard with the building code, these types of headaches can be minimized.

In addition,  code officials and policiticians are comfortable with adopting and utlizing I-Codes as the basis for building regulations.  Thus, municipalities do not have to reinvent the code wheel when looking to implement green building practices.

Finally, a solid compromise green building code can advance green building as the default standard.  In California, which has adopted a green building code, various interest groups, including the California Building Industry Association, have come on board with the code. 

There will always be a place for aspirational green building standards.  LEED, for example, should provide new and innovative and more challenging ways to reduce GHG emissions, materials usage, enhance energy efficiency, etc.  The goal of a code, however, should be to raise the floor of all buildings to a greener baseline.  ICC's Green Building Code effort is a step towards making that happen.  So, for me, knitting will have to wait.

"Reasonably Relied Upon..." - The Growing Importance of Energy Modeling

Today's guest post was contributed by E. Mitchell Swann, P.E., LEED AP, a partner at MDC Systems


As a strong component of the sustainability initiative in buildings, energy use is rightfully taking its place as a leading metric in evaluating a building’s performance. Further emphasizing the importance of performance measurement is the expected roll out of an industry wide “Building Energy Performance” label which is intended to provide an objective comparison of energy use between buildings. Rating systems like Energy Star along with model energy codes look at both predictive energy use models and actual usage as crucial to determining a building’s true performance and rating. The USGBC’s newly issued LEED v3.0 rating system requires the initial certification, recertification and by extension the possibility of decertification of LEED buildings to be tied closely to comparisons of modeled and measured energy use over time.


In those rating systems where a project’s “end game” performance is evaluated against their ‘promise’ as presented in a predictive model developed during design, the quality of the prediction greatly influences the quality perception of the results.


On many projects energy modeling work is performed by a subconsultant to the design team or possibly as an independent member of the project team. The results of the modeling effort are extremely influential in making design decisions from site orientation to building envelope options to HVAC systems to control strategies. Clearly an error during the modeling stage can lead to major problems downstream especially with respect to energy use comparisons and possibly maintaining certification downstream.


But if an error is made, who do you turn to for redress? Obviously the first stop is at the door of the energy modeler. This might work in the independent team member scenario but not so well in the subconsultant situation. Dealing with a subconsultant to a member of the design team may require a ‘two stop’ stop. But what happens if the modeling consultant doesn’t have the liability insurance that design firms typically have? What if the error is not ‘caught’ until Year Two of operation and we discover that the system that was installed will never perform as modeled and the actual energy costs are expected to 15% higher than initially thought for the life of the building? What are the ‘damages’ incurred by the Owner? The cost of a building or system retrofit? The energy cost penalty for the life of the system? What about the engineer who reasonably relied upon the analysis provided by the energy modeler? If the initial model output is used to guide engineering and/or architectural designs on the project, is a ‘third party modeler’ providing design services? Do they need to be licensed as an architect or engineer?


These are just a few of the issues that can arise and while energy modeling has a fairly long history, it is common in the industry to consider models as a comparative tool used to evaluate design options, not to ascertain the precise amount of energy a building would consume in a year. The newly ‘codified’ need to compare prediction to reality would seem to introduce a new level of expected accuracy and with it potential exposure. Is this effectively a prediction (and promise?) of performance which traditional E&O insurance does not cover? Will insurance products need to be revised to accommodate this new potential risk?


Design professionals would do well to clearly define performance expectations and potential limitations on their design as well as key parameters and assumptions used in modeling facility operations. On evaluating performance downstream, there may need to be an ‘audit clause’ to allow the designers a chance to evaluate how the facility was maintained or operated and the impact on energy if there is a divergence between predicted and actual usage.


The importance of energy modeling and the importance of accuracy in modeling is growing especially if building ratings or certifications are linked to correlations between predicted an actual performance. Is this a good thing? Well, at one level it seems reasonable to require actual performance to be at or near what was “promised”. But it is also important to remember that construction is a complicated and multi-variable process with many inputs, pieces and actors. So a lot can happen that can impact final performance and it may be difficult to determine exactly all of the “whys”, “hows” and who if something doesn’t perform exactly as expected. And of course we all know how fickle the weather can be.



As hard as this may be for my readers to accept, Green Building Law Blog will be on vacation next week.  Here are some suggested blogs and other resources to peruse while I visit Western Pennsylvania with 8 children under the age of 5 (and their parents).  I have tried to include a little something for everybody:

If you are craving green building law:

Green Real Estate Law

Green Building Law Update

Green Building Envirotrends

If you are craving construction law:

Construction Law Musings

Best Practices Construction Law

If you are craving LEED information:


Real Life LEED

If you are craving environmental journalism:




NRDC Switchboard (also in Spanish!) 

If you are craving water ice: 



Wal-Mart Sponsors Green Job Training For Women

I have written before about the appalling lack of women in the green sector. reports that Wal-Mart is attempting to do something about this by sponsoring green job training for women. 

Together the two organizations are launching an initiative called "Moving from Red to Green: Working Women in the Green Economy."

The Walmart Foundation's support will enable the working women's advocacy group to establish a pilot program and provide grants of $60,000 to four organizations to provide the training.


Others will **hopefully** follow suit. 

What Cash For Clunkers Can Teach Us About Green Building Incentives

I have been watching with interest the voracious appetite for the $4500 "cash for clunkers" incentive program which rewards people for trading in less fuel efficient vehicles for new, more fuel efficient ones.  So many people have taken advantage of the program that it ran out of cash within a week of opening, though the $1 billion appropriation was expected to last until November.  Now the Senate is debating whether to pour an additional $2 billion into the program.

Very interesting, but what does this have to do with green buildings, you may ask.  I see it as a very interesting object lesson for structuring green building incentives.  Green building incentives have been very popular, and are often promoted in lieu of mandatory green building regulations.  What is hard, though, is getting the incentives right.  How much is enough to stimulate green building, while maintaining a responsible public fisc?

Las Vegas famously went very wrong with their original green building incentive program, so much so that it threatened to deplete the finances of the state of Nevada.  Essentially, the problem was the same in Las Vegas as it was for the clunkers--too much money was available from the outset with too few requirements, meaning that the program was oversubscribed.  Instead, a step-wise program would have been more reasonable for both LV and the clunkers. 

So, for Clunkers, if the program had started with a $1000 incentive, and been evaluated after 1-2 months, the incentive could have been enhanced.  Now, reducing the incentive will only garner public outrage instead of benefit. 

The lesson for government entities looking to implement incentive programs? Start out with the lowest reasonable incentive, then evaluate the program after a reasonable period to see if it has been successful.  If not, you can create higher incentives or relax the requirements.  


2009 Lawyer on the Fast Track

I have been named a 2009 "Lawyer on the Fast Track" by the Legal Intelligencer. This honor is in no small part a result of the success of Green Building Law Blog, so thank you to all my loyal readers, commentors and collaborators!