Knowledge Corner

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Wrap-Ups are a great risk management tool for large construction projects. There are many moving parts of a Wrap-Up program, which can seem overwhelming if you do not have the proper structure in place. The key elements of a Wrap-Up that create this structure include Program Design, Financial Risk, Administration, and Claims Management.

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An unprecedented court ruling regarding business interruption insurance claims impacted by COVID-19 ‘across the pond’ has many insurers and insureds anxiously awaiting any ripple effects to be felt in the U.S.   

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Initially, courts dealt with a dearth of sophistication when determining the responsibility for the concurrent delay in the assessment of liquidated damages. Courts have now been permitting the assessment of liquidated damages, even where there are both Contractor and Owner-caused delays. Critical Path Method (CPM) scheduling software—aided by expert testimony—made a change in approach and willingness to use complex scheduling possible. Courts have tended to award liquidated damages with reasonable certainty when caused by the Contractor.

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Despite the fact there is a set project schedule, we often find that construction projects are delayed and finish later than expected. As a result, Owners will often attempt to assess their liquidated damages against their Contractors for the delay at the end of the project. In doing so, Contractors typically claim that the delay was either Owner-Caused or a Concurrent Delay, which means the delay occurred due to acts of others beyond their control by multiple, independent parties.

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The construction industry has started picking up the pieces from COVID-19. Together, we have learned new lessons and developed new strategies for the future. Since this pandemic is unique, as disputes start to occur, we will start to see how the courts take precedent on COVID-19 cases. Here are 5 new construction scenarios to consider that could potentially lead to a claim.

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Managing Worker’s Compensation (WC) claims for your employees can be complex and tricky. Here is a breakdown of the claims process to assist you in understanding what to expect when an injury is reported.

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The COVID-19 pandemic continues to have the most significant and widespread economic impact since World War II. Unfortunately, there are no benchmarks to compare what is happening or to accurately assess the overall medium and long-term impacts. As Owners and Contractors start picking up the pieces from this pandemic—and as we see projects that were halted, businesses that have been closed, and many other construction concerns—there are a few things to be mindful of:

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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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Last week we began the dialogue on possible COVID-19 claims and what, if any, insurance coverage could be triggered. This week, we will expand that discussion to the following coverages—Pollution, Professional, and Subcontractor Default Insurance (SDI).