How Liquidated Damages & Consequential Damages Interact in a Contract

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Construction contracts can be overwhelming when you’re not looking at them every day. That’s why it’s important to understand your contract and the types of classification damages that could be written in it. Even though disputes are inevitable, understanding your contract will ultimately give you a leg up during the claims process. Let’s explore how liquidated damages and consequential damages interact in a contract.

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Topics: Contracts

The Importance of Onsite Start Dates for a Wrap-Up

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If you find yourself working on a Wrap-Up, there are often documents that need to be completed prior to starting on the project site. Typically, the first document completed is the Enrollment form, as this form helps the Wrap-Up Administrator create a Wrap-Up contract in their system. On this document, Trade Contractors often skip filling out their onsite start date. This can delay your approval, which can delay when you’re actually allowed on the project site but it can also affect your Wrap-Up insurance coverage.

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Topics: Wrap-Up Insurance

3 Types of Construction Contract Damages

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In today’s construction climate, building projects and construction contracts can be extremely complex. A Contractor must become thoroughly familiar and fully understand the contract’s terms and conditions.

Any uncertainty with the provisions in a contract may lead to costly disputes whether the resolution is by way of mediation, arbitration, or litigation. All of these dispute resolution forums can be expensive and time-consuming. The ultimate purpose of dispute resolution is to determine the amount of money the party claiming to be damaged by a contract breach can reasonably expect to recover. 

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Topics: Claims, Contracts

5 Steps for Handling Pollution Claims

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Pollution incidents can occur while working on a job site. Air pollutants—such as the dust from land clearing, demolition, burning, etc.—and/or liquid pollutants—such as oil spills, paint spills, harmful chemical spills, etc.,— are some examples. When a pollution claim occurs, the Insurance Carrier will appoint a Claim Analyst to oversee the case. Here are 5 steps to consider when managing a pollution claim.

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Topics: Pollution Liability Insurance

Using Your ROI To Find Your Company’s Profitability

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Last week, we learned about calculating your company’s Return on Investment (ROI). We discussed that, in general, the lower the risk, the lower the return—whereas, the higher the risk, the higher the return. This week, we will dig further into Net Profitability and Rate of Return with our example Contractor, XYZ Company. With that as a backdrop, what should the Owner of a construction company require in return for the risks taken?

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Topics: Surety Bonding

The Importance of Knowing Your Company’s ROI

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What is the appropriate compensation for the Owner of a construction firm? Is a healthy salary plus expenses enough to justify the business risk that a Contractor takes—or should that Contractor also be building wealth using the construction firm as an investment vehicle?

Unfortunately, there is no one right answer to these questions. However, answering the question on an individual basis does depend on the Return on Investment (ROI) a Contractor expects for their business.

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Topics: Surety Bonding

Oops! What You Need To Know About Professional Liability

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Have you ever thought what would happen if you were building a bridge across a river one mile wide and your calculations were “almost” correct but actually off by a mere one degree? You would miss your mark by over 90 feet, which is the distance from Home Plate to First Base at Yankee Stadium.

OOPS!

Insurance coverages help transfer these risks from your company’s balance sheet to the Insurance Carrier.

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Topics: Construction Commercial Insurance

Who Pays for a Property Loss? Part 2

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In Part 1, we discussed the major difference between Liability Insurance and Performance Bonds. In addition, we reviewed the steps the Surety must take if a Performance Bond Claim is made. This week, we will explore how the courts have viewed this situation.

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Topics: Surety Bonding

Who Pays for a Property Loss? Part 1

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Depending on the type of construction project, the General Contractor may be required to provide both General Liability (GL) coverage along with Performance & Payment Bonds. In that situation—if a claim were to arise dealing with a construction defect—a common question is who will cover the loss?   

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Topics: Surety Bonding

Cyber Risk in the Construction Industry

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Ransomware, malware, and data breaches have become part of today’s business vernacular. It may seem like the big-name consumer brands are the only ones at risk; that is simply not the case. Even the construction industry is not immune to cyber risk. Like the rest of the world, the construction industry is becoming more dependent on technology. However, this dependency can lead to exposure to cyber risk.

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Topics: Cyber