Kicking off a new construction project brings discussions of all types: blueprints, the site and its preparation, logistics, permits and approvals, and ultimately the budget and delivery schedule. But as part of these conversations, there is one critical element that is becoming more commonly asked before construction begins to support the project being completed on time while setting up the future building for success: Internet of Things (IoT) technology.
While many may consider that conversation as only for the owner to consider closer to the occupancy date, that thinking is changing. The reality is that this conversation actually belongs at the start of the building process alongside building materials and floor plans, so that day one of ownership is enabled with smarter, more informed decisions already in place.
As IoT technology adoption continues to grow, Insight Risk is now seeing nearly 60 percent of owners opting to keep the technology deployed upon project completion. That number is expected to rise as more stakeholders recognize the benefits—and experience the positive operational and financial impacts firsthand.
So why should general contractors and building owners be having the IoT conversation earlier? What does it take to go from temporary to permanent? Spoiler: It's simpler than most think!
For the purposes of this article, we're focusing on IoT technology designed to protect against losses from water-, environmental-, fire-, and security-related risks across both construction and occupied properties. While other types of IoT technology, such as smart thermostats, indoor air quality sensors, automatic light sensors, or trash level detection, play an important and helpful role in finished buildings, they fall outside the scope of this discussion.
Mutually Beneficial Approach to IoT Technology
Deploying IoT technology from building construction through occupancy creates meaningful advantages for both contractors and owners, but the full impact is only realized when it's evaluated across the entire life cycle of the asset. Having the conversation before the start of construction gives owners the opportunity to align with the IoT solution being deployed, while also shaping how those systems will support the building long-term. With this in mind, all stakeholders can expect to experience the following.
On-time delivery. Alerts to potential loss events enable teams to respond quickly so small issues do not become major delays, meaning fewer disruptions, unexpected costs, and a smoother path to completion. This confidence empowers contractors to start their next project as scheduled—impacting labor, product ordering, and logistics. Owners and developers hit occupancy targets and revenue timelines by being able to move tenants in as scheduled.
Profitability. Avoiding issues or losses caused by water, fire, or security-related risks thanks to IoT technology deployment not only protects the building, but it also impacts the bottom line. When damage occurs, costs can compound quickly with unscheduled overtime, rush fees for materials, or permitting and certificate of occupancy issues. These unexpected costs can quickly erode project margins for contractors, owners, and developers.
Shared expenses. Deploying an IoT system designed for both temporary and permanent use at the start of construction means the selected system's costs can be shared or strategically allocated between contractor and owner. Installation is often more efficient and less expensive during construction, particularly for more embedded solutions like inline shutoff valves or sensor mats installed beneath the flooring. Most importantly, selecting technology that serves dual purposes ensures both parties see value from day one.
Documented historical knowledge. With IoT technology active on the project from day one, it documents the living history of the building's condition. Sensors detect and alert to the presence of water or high humidity, enabling construction teams to quickly resolve the issue. As all of the data is compiled, contractors have documented proof to show mitigation efforts against any potential claims against construction, while owners gain visibility into past issues. In the event of litigation, a well-monitored building can become the best defense.
Lower insurance deductibles and premiums. Insurers favor well-managed, low-risk buildings and projects. With IoT technology in place, stakeholders can provide real-time and historical data that give underwriters a clearer picture of building performance. These insights can be used to negotiate more favorable premiums and deductibles, and provide stronger positioning during renewal or placement discussions.
Positive reputation. In construction, being known for completing on-time, on-budget projects with "healthy" buildings is built project by project. Many leading contractors rely heavily on repeat business, with some reporting rates as high as 98 percent. Keeping a customer should not be seen as part of the business; it should be a top priority and concern throughout the project life cycle. The same goes for owners and developers: Offering quality, well-built properties that are free from preventable issues and equipped with systems to maintain that performance are differentiators for tenants. No one wants to be remembered as "the company that had that huge water damage claim" or "the one that had all those water issues with floor drains" years after the event occurred.
When to Jointly Discuss IoT Solutions
While IoT technology can be introduced at any stage during the project, the earlier the conversation is had, the better. Specific types of IoT technology can be built directly into the course of construction, avoiding costly retrofits later. Plans can also be made for using specific types of technology during phases of the project but transitioning to other solutions upon occupancy—all while maintaining full continuity in data and system visibility.
During these discussions, stakeholders should indicate all of their concerns, even those beyond immediate construction risks, and operational goals, such as the following.
Will the property be vacant at times, such as during commercial turnover between tenants, seasonally used like student housing, or gaps between leases, as with apartments?
Are there water consumption regulations at the local, municipal, or state level, or requirements to have certain "green" or sustainability features?
Will the property have building information modeling and building management systems that need to be integrated with?
Do future property managers anticipate using a proactive or reactive approach to maintenance?
Which assets or spaces warrant temporary and/or permanent protection, such as mechanical rooms, historical elements, tenant amenities, or green roofs?
Answering these questions early ensures that the selected IoT technology not only meets the project's criteria but also is a right fit for future use, setting up a win/win for all stakeholders.
Ensuring a Smooth Transition to IoT Technology
As construction wraps up and the steps are taken to transition the building to ownership, it's important that IoT technology is included alongside systems testing, final inspections, punch list completion, and owner orientation. The steps taken during this critical phase help set the tone for the building's long-term success.
Contractors should share a clear record of any water-, fire-, or security-related events and the impact of each event, backed by dashboard reports and after-event documentation. This level of transparency on the contractor's side not only builds trust but equips building owners with valuable insights into potential problem spots.
As the contractor's site team will be the main user of the IoT technology during the construction project, they will be the ones trained by the respective technology companies on how to use the sensors for maximum protection. Hence, it's important to remember that training also needs to be part of the transition so owners can confidently operate, manage, and maintain the building from the first day of occupancy through the property's life. Any manuals should also be turned over at this time. Ideally, training should take place before occupancy is obtained.
During the training period, access and communications protocols should be updated. New contacts should be added for alerts, reporting, billing, and main point-of-contact at all of the technology companies while seamlessly removing the construction team. Aligning this transition ensures continuity in monitoring.
Invoicing should also be adjusted for the final date of construction, clearly separating construction-related costs and hardware returns from ongoing operational expenses, giving owners a clean starting point as they take control of the property.
Conclusion
With IoT technology protecting the property throughout its entire life cycle, both contractors and owners receive additional benefits. Stories abound of how technology has prevented costly issues, from catching leaks from building envelope openings that could have led to mold months down the road to detecting freezing temperatures near an HVAC system that could have led to catastrophic frozen pipes and tenant displacement. The common thread to all these stories is that problems are avoided before they ever have the chance to escalate.
Just as contractors, owners, and developers collaborate to bring a building to life, IoT technology plays a critical supporting role, protecting against fire, water, and security concerns to make that vision a reality. Because the smartest buildings are not just well-designed, they are well-protected from day one.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.
Kicking off a new construction project brings discussions of all types: blueprints, the site and its preparation, logistics, permits and approvals, and ultimately the budget and delivery schedule. But as part of these conversations, there is one critical element that is becoming more commonly asked before construction begins to support the project being completed on time while setting up the future building for success: Internet of Things (IoT) technology.
While many may consider that conversation as only for the owner to consider closer to the occupancy date, that thinking is changing. The reality is that this conversation actually belongs at the start of the building process alongside building materials and floor plans, so that day one of ownership is enabled with smarter, more informed decisions already in place.
As IoT technology adoption continues to grow, Insight Risk is now seeing nearly 60 percent of owners opting to keep the technology deployed upon project completion. That number is expected to rise as more stakeholders recognize the benefits—and experience the positive operational and financial impacts firsthand.
So why should general contractors and building owners be having the IoT conversation earlier? What does it take to go from temporary to permanent? Spoiler: It's simpler than most think!
For the purposes of this article, we're focusing on IoT technology designed to protect against losses from water-, environmental-, fire-, and security-related risks across both construction and occupied properties. While other types of IoT technology, such as smart thermostats, indoor air quality sensors, automatic light sensors, or trash level detection, play an important and helpful role in finished buildings, they fall outside the scope of this discussion.
Mutually Beneficial Approach to IoT Technology
Deploying IoT technology from building construction through occupancy creates meaningful advantages for both contractors and owners, but the full impact is only realized when it's evaluated across the entire life cycle of the asset. Having the conversation before the start of construction gives owners the opportunity to align with the IoT solution being deployed, while also shaping how those systems will support the building long-term. With this in mind, all stakeholders can expect to experience the following.
When to Jointly Discuss IoT Solutions
While IoT technology can be introduced at any stage during the project, the earlier the conversation is had, the better. Specific types of IoT technology can be built directly into the course of construction, avoiding costly retrofits later. Plans can also be made for using specific types of technology during phases of the project but transitioning to other solutions upon occupancy—all while maintaining full continuity in data and system visibility.
During these discussions, stakeholders should indicate all of their concerns, even those beyond immediate construction risks, and operational goals, such as the following.
Answering these questions early ensures that the selected IoT technology not only meets the project's criteria but also is a right fit for future use, setting up a win/win for all stakeholders.
Ensuring a Smooth Transition to IoT Technology
As construction wraps up and the steps are taken to transition the building to ownership, it's important that IoT technology is included alongside systems testing, final inspections, punch list completion, and owner orientation. The steps taken during this critical phase help set the tone for the building's long-term success.
Contractors should share a clear record of any water-, fire-, or security-related events and the impact of each event, backed by dashboard reports and after-event documentation. This level of transparency on the contractor's side not only builds trust but equips building owners with valuable insights into potential problem spots.
As the contractor's site team will be the main user of the IoT technology during the construction project, they will be the ones trained by the respective technology companies on how to use the sensors for maximum protection. Hence, it's important to remember that training also needs to be part of the transition so owners can confidently operate, manage, and maintain the building from the first day of occupancy through the property's life. Any manuals should also be turned over at this time. Ideally, training should take place before occupancy is obtained.
During the training period, access and communications protocols should be updated. New contacts should be added for alerts, reporting, billing, and main point-of-contact at all of the technology companies while seamlessly removing the construction team. Aligning this transition ensures continuity in monitoring.
Invoicing should also be adjusted for the final date of construction, clearly separating construction-related costs and hardware returns from ongoing operational expenses, giving owners a clean starting point as they take control of the property.
Conclusion
With IoT technology protecting the property throughout its entire life cycle, both contractors and owners receive additional benefits. Stories abound of how technology has prevented costly issues, from catching leaks from building envelope openings that could have led to mold months down the road to detecting freezing temperatures near an HVAC system that could have led to catastrophic frozen pipes and tenant displacement. The common thread to all these stories is that problems are avoided before they ever have the chance to escalate.
Just as contractors, owners, and developers collaborate to bring a building to life, IoT technology plays a critical supporting role, protecting against fire, water, and security concerns to make that vision a reality. Because the smartest buildings are not just well-designed, they are well-protected from day one.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.