The construction process is fraught with risk. Owners of construction companies face serious risks to the productivity of their businesses every day. Unforeseen incidents resulting in damage to property or injuries to persons, stolen equipment, structural flaws and component failures, and other risks can disrupt a project and cause expensive delays. With decades of experience helping clients with managing construction-related risks, the insurance coverage and litigation attorneys at Payne & Fears have developed a set of best practices for advising construction companies with their insurance choices and, when claims do arise, navigating the insurance claims process.
Construction-Related Liability Claims: Property Damage
Given the nature of residential, commercial, and public-works construction projects, the risk of incidents resulting in damage to, or loss of use of, property is ever-present. When occurring during construction, these losses may be covered under a builder’s risk policy or, depending on the policy and the facts, under a general liability policy. When occurring after construction is completed, a general liability policy often provides coverage. But these claims are never simple. Some consequences of a single incident may be covered by insurance (e.g., physical injury to property), which others may not (e.g., code-compliance issues and other delays). Maximizing your insurance coverage when such incidents occur requires carefully identifying and parsing these consequences, understanding which may be covered and which may not, and persuasively presenting your claim to your insurers.
Construction-Related Liability Claims: Injuries
Creating and maintaining a safe worksite is always a challenge. No matter how much effort is invested in preventing injuries to employees and others, a construction site can be an inherently dangerous place. Workers’ compensation insurance provides risk transfer for on-the-job injuries to employees. Managing the risk of injuries to others, however, requires a combination of effective, enforceable indemnity agreements with trade partners and general liability coverage with appropriate coverage parameters and sufficient limits.
Work Quality and Missed Deadlines
Managing construction-related risks requires strict compliance with governing regulations and codes. If a project is found to be structurally unsound, is not up to code, or displays other construction defects, the contractor faces claims by the owner and others, resulting in delays, loss of revenue, and expensive litigation. Missed deadlines and delayed timelines can cause similar problems. These exposures may or may not be covered under a contractor’s builder’s risk, general liability, or professional liability policies, depending on the factual nuances of the incident and the specific terms of the policy.
Materials and Equipment Damage and Theft
The theft of or damage to materials and equipment can throw off the timeline for a project. A builder’s risk policy may protect against these kinds of losses.
Construction-Related Liability Claims: How We Can Help
Construction is a risky business. Owners of construction companies face many challenges over the course of completing a construction project. We have decades of experience advising owners, developers, contractors, and designers confronted with potential losses arising out of these kinds of construction-related risks and effectively prosecuting their insurance claims.