A risk management perspective
In today’s construction industry, contractors are routinely looking for ways to enhance their operational efficiency to keep pace with a competitive labor market, building demand, strict project deadlines, and rising material costs.
There have been a myriad of innovations over the last few decades that have enabled the industry to adapt quickly to these ever-changing market factors, such as the advancement in mechanization, robotics, construction modeling, and prefabrication.
Relating to prefabrication, one opportunity for contractors that has been growing in popularity in recent years is the utilization of cross-laminated timber (CLT).
Utilization of CLT can offer a range of benefits:
Efficiency
Economic
Environmental
Aesthetics
However, along with the benefits, there are risks associated with utilizing CLT:
Manufacturing capacity
Novelty of product
Evolving codes and standards
Despite these risks, many contractors and developers have found the benefits to be too substantial to dismiss. CLT projects often attract positive publicity for stakeholders aiding in the material's increased usage in the U.S.
The insurance market has slowly warmed up to CLT buildings, however many underwriters remain skeptical of the material. There are still few data points and claims references at an underwriters’ disposal to properly assess the exposure and potential costs associated with a loss.
As the product matures, there is a high likelihood that manufacturing will increase, and developers will elect to use the material to cater to the evolving marketplace. The CLT marketplace is projected to grow to $4 billion in the next few years and additional manufacturing facilities are already being built outside the Pacific Northwest.
There are many key considerations that developers and contractors must take into account when deciding whether CLT is the right building material for a project. Request the full report to learn more.