Until New Legal Standards are Established, Parties Should Address AI Risk in Contracts
Pullman & Comley Litigation Attorney Thomas S. Lambert authored the Construction Today article, “Until New Legal Standards are Established, Parties Should Address AI Risk in Contracts.” The article examines how the rapid adoption of artificial intelligence (AI) in the construction industry is outpacing existing legal frameworks, leaving owners, contractors, and design professionals with significant uncertainty around liability, data ownership, and risk allocation when AI-related issues arise.
In the article, Tom, who practices in the area of construction law, explains that while AI offers efficiencies across design, scheduling, safety monitoring, and inventory management, traditional construction contracts do not yet address how responsibility should be assigned when AI contributes to errors or failures. He highlights unresolved questions surrounding liability for AI-driven design flaws and emphasizes the importance of proactively addressing AI through tailored contract provisions. He notes, “Clear contract language governing AI, and who is responsible for it, will both help avoid costly litigation and alleviate fears about using a tool so new and powerful, yet far from perfected in an industry that requires precision.”
Tom also discusses the challenges of data privacy, ownership, and insurance coverage as AI becomes more integrated into construction projects. Open-source and data-driven AI tools raise critical questions about who owns project data, how it may be shared, and whether sensitive information could be exploited by third parties. These risks extend to insurance coverage, as many policies have not yet accounted for AI-related exposures. Tom cautions that "if AI is being used at any stage of a construction project and it hasn’t been disclosed to the insurer, a carrier may try to deny coverage,” highlighting the need for transparency and careful contract drafting to mitigate potential liability.
To read the full article, please visit the Construction Today website.