Change order insurance policy (COIP) in the U.S. design and construction industry: Is there any likelihood of acceptance?
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Throughout the construction industry and for a long period of time, the issue of change orders poses as an undesirable problem in maintaining the efficiency and cost of construction projects. This research study will investigate a new mechanism for dealing with such problems. Accordingly, it will propose sharing the risk of cost overrun as a consequence of change orders, with a third-party insurance company, which can also be known as Change Order Insurance Policy (COIP). In order to check for the possibility of implementing such a policy in the U.S. market, this study will primarily test for the acceptance rate of design and construction professionals spanning the industry. Accordingly, participants were chosen from a list of 25 top construction firms found in The Atlanta Business Chronicle. Two anonymous surveys were then administered to assess the extent to which construction-affiliated professionals accept the concept of using COIP. Accordingly, results showed that the majority of participants do not accept the idea of using such a policy. However, program managers and owners did portray higher acceptance rates, as opposed to architects and contractors.