The Europeans do it. The Chinese and Japanese do, too. But no one does it to the extent that the Swedes do.
We’re talking about modular construction, which despite having been around for decades, just hasn’t caught on in the U.S.
That may be changing, not in dramatic fashion, but changing nonetheless as the construction industry looks for new ways to deal with chronic labor shortages and to build more affordable housing in far less time than a site-built house or office building.
There’s plenty of room for growth. According to the Modular Building Institute, modular construction is an $8 billion industry in the U.S., which isn’t a negligible figure but still represents less than 5% of construction. By comparison, 85% of the construction in Sweden is modular.
Like most things in life, there are implications here related to insurance coverage and how contracts are written. Needless to say, unpleasant surprises await the contractor or owner who doesn’t pay attention to the details of their coverage.
The good news is that carriers view modular construction favorably. Walls and floors and ceilings built on a factory floor aren’t exposed to the elements. Moreover, quality controls would presumably be better inside a factory than on a job site. Better still, there are fewer risks to laborers working in what is akin to an automobile assembly line.
On the other hand, there are areas of concern where questions will invariably arise. Among them:
There’s more to all of this, of course, but you get the idea. Moving to modular will require you think about just what your policies cover and how they might need to be modified.
Whether your business today does any modular work or not, the future of modular in the U.S. seems undeniable.
According to the National Institute of Building Sciences Off-Site Construction Council, 81% of construction managers, general contractors, engineers, trade contractors, architects, owners and developers plan to use offsite construction at some point.
With 3D modeling, new approaches to manufacturing and digitized construction processes becoming more advanced, who knows? Construction could become more about assembling parts than creating something on-site. Just ask the Swedes.
Michael Kline is a CCIG Vice President. Reach him at Michael.Kline@thinkccig.com or 720-212-2042.
CCIG is a Denver-area insurance, employee benefits and surety brokerage with clients nationwide. We do more than make sure you have the right policy. We help you manage your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.
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