A 3D scanning company gets hired to document an existing building before a renovation. The crew laser scans the property and delivers a point cloud and a Revit model. The architect then builds renovation drawings on top of that model, and the contractor works from those drawings in the field.
Partway through construction, someone notices that an existing condition doesn’t match the model. Redesign, extra labor, replacement materials, change orders, possible fabrication costs, and a delayed schedule follow. The dispute reaches $300,000.
That’s where the conversation about E&O for 3D scanning companies starts. It differs from the generic line that errors and omissions insurance protects businesses against negligence claims. It starts with how the dispute actually happens.
Why E&O for 3D scanning companies matters even when you don’t touch the design
A typical project includes the owner, architect, engineers, contractor, subcontractors, surveyors, and the 3D scanning company that supplies existing-condition data. A dispute doesn’t necessarily stay between the owner and the architect, or the owner and the contractor. Depending on the facts, the contracts, and the jurisdiction, claims, cross-claims, third-party claims, or contractual indemnity demands can pull in other participants.
A scanning company doesn’t need to cause the problem to face defense costs. Being accused of causing a loss differs from ultimately being responsible for it.
Eventually, a company might establish that its scan was accurate or that its model matched the scan. It might also show that the disputed condition fell outside its scope. Likewise, the contract may have required the contractor to field-verify the dimension, another consultant may have altered the information, or the architect may have misread the delivery.
Reaching that conclusion can still take attorneys, experts, documents, and depositions. That’s the exposure, regardless of whether anyone ultimately finds the company responsible.
Where things go wrong for 3D scanning companies
Something got left out
The measurements the company captured might be perfectly accurate. The problem is something the scan never captured, such as a pipe, a duct, a beam, an opening, a piece of equipment, a wall, a utility line, or a clearance. The design team proceeds without knowing the condition exists. It turns up during construction, and redesign or added construction cost follows.
Professional exposure extends beyond getting a measurement wrong. Leaving something out can create the same kind of allegation.
The scan is right, the model is wrong
This one matters because scanning companies often focus heavily on equipment accuracy. Meanwhile, the team downstream uses the actual deliverable.
Say the LiDAR data and point cloud are exactly right. The error happens in the conversion step, when someone builds the Revit model, CAD file, floor plans, elevations, or as-builts from that raw data. Someone models a component wrong or drops it entirely.
The deliverable can be wrong even when the scanner is right.
An incorrect measurement
The scanning company documents a building, and a wall, column, opening, beam, ceiling height, or piece of equipment shows up wrong in the deliverable. The architect relies on it, and the team builds construction documents around it. When construction starts, the discrepancy surfaces in the field.
The chain runs from measurement to model to design to construction to change order to financial loss to dispute. In some form, the allegation is that the project team relied on inaccurate existing-condition information.
Matterport and other third-party technology
Using Matterport or similar reality capture technology doesn’t change this picture. The information chain runs from the physical building to the reality capture technology to the data to the scanning company. From there, it moves to a drawing, model, or deliverable, then to the architect or contractor, and finally to a project decision.
Once that information becomes part of a project decision, a dispute can raise several questions:
- Was the underlying information accurate?
- Was it appropriate for how the team used it?
- Did someone interpret it correctly?
- Did the conversion lose something?
- Did anyone communicate the limitations on the data?
- Should someone have verified a measurement independently?
These questions say nothing about whether Matterport’s technology is reliable. They show how third-party technology sits inside a longer information chain that a scanning company doesn’t fully control.
Prefabrication
A contractor needs accurate existing-condition information before prefabricating components off-site. A 3D scanning company captures the space and produces a model. Fabricators build components from that information, and the components arrive at the building and don’t fit.
That can mean replacement fabrication, additional materials, labor, expedited shipping, crane or equipment costs, redesign, and delay. Everyone involved starts investigating where the discrepancy came from.
The scanning company didn’t manufacture the component, install it, or necessarily design it. Even so, its information may have been part of the decision chain that led to it.
Does a verification clause remove the need for E&O for 3D scanning companies?
“Our contract says they have to verify everything” comes up often. An owner’s contracts may require contractors to verify measurements independently before relying on them, which is good risk management on the owner’s part. However, a contractual defense doesn’t necessarily stop someone from making an allegation against you.
After a major loss, the parties can still dispute what the contract actually required. They can dispute whether that provision applies to the specific situation and who was responsible for verification. They can also dispute whether the scope of the scanning company’s work was clear, whether someone reasonably relied on the information anyway, and whether another party contributed to the loss.
The contract may ultimately help the scanning company a great deal. Someone may still need to pay the attorneys who establish why.