Integrated Project Delivery in Construction

Integrated Project Delivery in Construction

In the construction industry, integrated project delivery, or IPD, helps produce successful projects by ensuring the collaboration of all participants, from design through delivery. The result is a project that reduces waste and has a much better chance of ending on time and on budget. While IPD can help a project run more efficiently, stakeholders also need to consider what this type of arrangement means from a risk management standpoint.

According to Doug Cauti, chief underwriting officer for Liberty Mutual Insurance’s construction unit, construction businesses and their collaborators need new types of insurance arrangements to address the unique aspects of IPD projects. “IPD takes a ‘no fault’ approach to risk, while traditional project insurance aims to protect each participant against the claims of others,” he says. IPD contracts use liability waivers and other provisions to spread risk and reward among the participants.

Cauti says what appears to be working best for IPD is the project-specific approach used for wrap-ups, in which a single carrier underwrites and services multiple parties. “We reduce the number of separate and potentially competing interests through this arrangement,” he says. “This helps us align with the goals of IPD, which are to increase communications and efficiency and improve outcomes through collaboration.”

Cauti advises IPD participants to work with their brokers to determine the best approach to protecting their interests. While the single-carrier, project-specific approach may be popular now, “your broker’s experience working on other projects may uncover potential pitfalls you need to be aware of,” he says.



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The illustrations, instructions, and principles in this material are general in scope and, to the best of our knowledge, current at the time of publication. No attempt has been made to interpret any referenced codes, standards, or regulations nor to identify all potential risks or requirements.