‘Nailing AI:’ Dinsmore Attorneys Explain Handling Construction Claims in the AI Era
In an article published on behalf of the International Association of Defense Counsel (IADC) for the August 2024 issue of Modern Contractor Solutions, Dinsmore’s Danielle Waltz, Sarah Smith and Colleen Booth dive into claims that can arise from the use of artificial intelligence in the construction industry.
Danielle is also a member of IADC’s Construction Law Committee. An excerpt from the article is below.
While AI can make work more efficient and more economical, there are drawbacks. As seen recently in the worldwide shutdown of computer applications due to the CloudStrike software outage, operational shutdowns resulting from AI-system malfunctions could negatively impact all industries. Whether a global outage or a site-specific failure, non-functioning AI systems could trigger business interruption claims by, and against, contractors who rely on AI technology. Construction projects may face delays, increased material costs, and loss of skilled labor where AI manages project logistics. Building owners may seek legal damages for business interruption or breach of contract, when delays in project completion expose their businesses to risk.
Contractors without cyber risk or similar coverage may find themselves making payouts to building owners as business-interruption damages under an insurance policy are generally only recoverable to compensate for lost earnings, not to compensate for other potential consequential losses.
To read the full article, click below.
