There’s only so much an unsophisticated owner can do when it comes to due diligence - you don’t know what you don’t know.
There’s also only so much an architect can do although they should certainly know more than the owner.
This is something that the GC or CM should have raised as they’re responsible for the logistics involved in developing:/executing/completing a construction plan but we don’t know what the architect or owner advised in this regard, if anything (including “don’t worry about that” or “we’ll deal with that when the time comes”).
What we don’t know here is who told who what and when. We also don’t know what involvement the insurance company might have had.
What we do know - and I do have some bias in this regard - is that TN should have had a development manager from the beginning capable of representing their interests with all of the other stakeholders and team members making sure issues or potential issues like this are addressed before the fact and not after the fact. Unfortunately too many people think this is an expense they can avoid and this is what happens.