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Hardhats, high tech and the value of new technology

UK Construction Risk Insights - Summer 2017

Cyber Risk Management
N/A

August 16, 2017

The construction industry's history of slow adoption of new technologies may offer advantages in finding the right risk/reward balance.

The cautious approach is being increasingly tested by a variety of new quickly advancing technologies.

I've been in construction a long time and admit that at times we may deserve our industry's reputation of not being early adopters of new technology. We're no strangers to high tech, of course. CAD, BIM, drones: we're doing fine, thanks, in the 21st century. But as long as people use buildings, roads and other infrastructure, construction will be mostly a physical job in the physical world. Bricks and mortar, hammers and nails, hardhats and lunchboxes. So forgive us if we tend to lean toward technology you can grab with both hands.

However, the industry now faces significant productivity challenges; a recent McKinsey & Company study1 shows that the typical large project in mining, infrastructure and oil and gas construction takes 20% longer to complete than scheduled and runs 80% over budget. Construction productivity has not kept pace with overall economic productivity, which has led to volatile financial returns for contractors.

We need to seek new and better ways of doing things, and that includes the use of cutting edge technology, for the simple reason that the opportunities are so great. With opportunities come risks, of course. So here we review both — the risks and opportunities — presented by a handful of technologies, and we consider the case for caution. While each one of these technologies merits a much longer discussion, maybe this will start some useful conversations.

BIM

Building information modelling or management (BIM) is deeply embedded in many parts of the construction sector but still presents technological issues that are gradually coming into focus. The sharing of documents and scheduling tools that are part of BIM can help prevent bottlenecks and identify critical dependencies in work and material deliveries. The collaborative nature of BIM, however, can be challenging. Sharing visibility into a project may mean sharing liability. Joint planning tools imply joint responsibility to the point of allocating responsibility when problems arise can be problematic. Bidding on jobs is all about privately weighing estimates about time, effort and resources. It is traditionally a non-collaborative undertaking. And yet collaboration may be something of a requirement in the era of BIM.

Opportunities

  • Instant communication and access to information
  • Avoid bottlenecks and scheduling mishaps
  • Role clarity
  • Efficient project management

Risks

  • Difficulty in allocating responsibility and determining liability
  • Complicating the bidding process by revealing work details
  • Cyber security issues

Cyber security is an issue for any online system and BIM is no exception2. As anyone following the headlines will note, cyber-crime rises along with cyber dependency. The more we go online, the more we are exposed to cyber vulnerabilities. A jewel thief would be quite happy to hack into the blueprints for a museum, store or other facility where valuables are stored. Like it or not, the construction industry is joining other industries, from retail to banking, where cyber security experts fight ongoing battles with cyber criminals, and owners of data being sought face liability questions in the cyber era: who is responsible when data is stolen? Those who created it? Those who store it? Those who access it? These questions can be as difficult to avoid as they can be to answer.

Drones

The drones are coming and the construction industry is one of the leaders of the charge. According to recent reports3, the industry accounts for a commanding proportion of the waivers the Federal Aviation Administration (FAA) has granted for commercial drone use. The FAA is now rolling out4 new rules that will likely broaden the use of drones for many commercial and industrial applications. The value of using drones to make inspections in hard-to-reach places is obvious. Next, drones will be arms in the sky, delivering materials to the workers in those same places. At some point, those responsible for the drones will have to look into aviation insurance coverage—something they may have never considered. The risks associated with drones will have to be addressed, whether companies develop their own drone fleets and operators or simply hire a drone service provider.

Opportunities

  • Inspections of work and work areas
  • Material delivery
  • Documenting project progress

Risks

  • Air safety issues
  • Air traffic control on the job site (including unauthorized drones)
  • Protection from crashes — property and liability issues

Privacy issues

  • Supervisors looking in on works (possibly subject to union negotiation)
  • Inadvertent recording of off-site activity

The appeal of drones is that no human passengers or pilots are required — but humans end up having access to everything drones see and record. The privacy implications raise serious liability concerns. The privacy of workers on a jobsite may be an issue. So is the privacy of anyone working, living or traveling through the vicinity of a jobsite where drones may be in use. If a company drone sees some suspicious activity are they obligated to report it? If some embarrassing moment is captured on a drone's video and then a clip of it goes viral, where might responsibility rest should the result include reputational damage? These are just a couple of the questions companies should look into before they fly ahead with their drone plans.

Wearable technology

There's a lot to keep track of on a job site, including people. On some job sites today, workers wear transmitters on their hardhats so the job supervisors can keep track of them electronically. And on a hot day, everything becomes harder — including making sure that everyone on the jobsite is hydrated and no health issues arise. At least one insurance carrier is supporting efforts5 by getting workers to wear health monitoring devices that can transmit an alarm if a biometric trigger (related to body temperature or heart rate, for example) goes off — or if a worker is motionless for a certain amount of time.

The potential advantages of 'wearables' in the workplace in terms of efficiency and safety are clear. Those employing these technologies, however, may also want to reserve some risk management resources to monitor and track the potential liabilities that could develop from privacy and liability issues.

Opportunities

  • More efficient deployment and management of workers
  • Immediate biofeedback to prevent health problems from going undetected, allowing first aid to be delivered immediately
  • More data available to research accidents and workplace injury claims

Risks

  • Privacy issues for workers on and off break
  • Health monitoring and HIPAA issues — laws protecting the privacy of health data
  • Health monitoring responsibility and liability issues

Health care providers aren't the only companies that have to consider the laws regarding the privacy of personal health information. Companies that provide wellness programs (with the intention of improving employee lives and productivity) face these issues today. They must be aware of laws preventing discrimination according to physical appearance and condition. They must be extremely careful with any personal information — of any kind — they keep about individuals. Health monitoring on the job raises these and other issues immediately: who sees the biometric data? How is it stored? Who is responsible for its security? Can health monitoring be made mandatory? If for reasons of privacy a worker does not wish to be monitored, can an employer change their assignment to one with lower risk? These are potentially questions, for risk managers, lawyers and unions.

The question of medical responsibility arises at the same time. If the intention of a health monitoring program is to protect the safety of employees, how far does that protection go? If health monitoring reveals a chronic health condition that the worker and the employer were previously unaware of, who is responsible for any change in work status that may result?

A final set of questions loom in regard to investigating claims. When a construction company launches an incident investigation, workers on site are often reluctant to get involved in the interest of potentially protecting a co-worker or themselves. With workplace tracking, the employer may know for a fact that a given worker was close to the scene when an incident occurred. That may put pressure on them to divulge information they might have wanted to keep quiet, whatever the moral implications. It's important to remember that technology often has an impact in areas it was never intended to affect at all.

Laser scanning and its applications: autonomous vehicles

Measure twice, cut once — the rule in carpentry is a reminder of how crucial accurate measurement is in construction work. Laser scanning, the technology behind self-driving vehicles, can raise measurement accuracy to new heights. Laser scanners can measure every aspect of a space at any stage of construction. The potential value is enormous. Lines that start out straight don't always stay straight in the real world and in complex projects, laying conduit, plumbing and anything that requires precise placement can be problematic. Laser scanners promise precision at any stage of construction. The ability to accurately register a 360-degree view of the world, as the technological basis for self-driving cars, heralds the development of autonomous construction vehicles.

Opportunities

  • Laser accuracy
  • Measurement of complex spaces
  • Use of self-driving construction vehicles

Risks

  • New technologies to learn, new expertise required, dependence on specialized equipment
  • Liability and reliability issues facing self-driving, autonomous vehicles

It's probably safe to say that, costs aside, the opportunities represented by laser scanning in taking measurements during construction outweigh the risks. Taking the next step and using autonomous vehicles, which employ laser scanning to act as the eyes of the self-driving machinery, may be another matter. The appeal of autonomous backhoes and cranes is clear — the work can be dangerous and extremely precarious. But news reports6 of the first death of a driver of a semi-autonomous vehicle — while possibly pointing to human error more than machine error — serve as a reminder of the dangers and liabilities courted by early adopters.

VR training

One of the largest construction equipment rental companies we know offers virtual reality (VR) training for users of hydraulic lifts, scissor lifts and other heavy equipment that can pose a danger to operators and people nearby if not operated correctly. Virtual reality offers an immersive experience akin to the 3D reality of the job site without the physical dangers. It potentially offers access to different scenarios and situations that a trainee can expect to find in the real world. And it is one of the most engaging training technologies ever devised. Your attention remains focused when you're wearing 3D goggles and begin interacting with the virtual world.

Opportunities

  • Engaging and immersive training experience
  • Hands-on practice with no risk — and no wear and tear on equipment
  • Monitoring training results and progress

Risks

  • Over confidence, complacency and desensitization
  • Liability for assuring sufficient training before workers use dangerous equipment

Yes, VR is more like real life than pictures in a training manual. But it is not the same as real life, and VR shouldn't be taken as an actual real-life experience. VR offers what programmers have imagined. Real life offers everything we can imagine and more. Which brings me back to where we started. Construction is physical reality. The virtual, digital, cyber and wireless world is no doubt part of our reality and when it comes to adopting new technology, we'll move ahead. But we'll keep our yellow and black caution signs in mind.

Footnotes

1. Imagining Construction’s Digital Future, McKinsey and Co.
2. Building Information Modelling (BIM): Addressing the cyber security issues, The Institution of Engineering and Technology.
3. Construction  drone  use  taking  off  as  industry  scores 40% of all FAA exemptions, Construction Dive.
4. Here’s why the drone industry just had a milestone moment, Fortune.
5. AIG Sees Profits in Tracking Workers’ Moves, The Wall Street Journal.
6. NHTSA probes Tesla self-driving cars after fatal  crash, The Detroit News.

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