Construction claims are sadly a hassle. They often lead to a lengthy process of legal litigations and battles. At times, companies and contractors have often gone bankrupt.
The complex reality is that construction projects are complex, fast-paced, and involve a lot of subcontractors and third-party outfits too. This phenomenon creates moments where insurance or construction claims can arise.
How can people in the construction industry avoid construction claims? It is time that we all jump in and have a look at some of the most common kinds of construction claims. Then professionals will review them on the basis of real-world data on industry disputes, along with ways to avoid them in the best possible manner.
The most common kinds of construction claims
Here are the main kinds of construction claims that contractors often see taking place whenever a construction project’s work is in progress:
Claims for construction delays
Delay claims arise whenever an unforeseen circumstance (set of circumstances) pushes a project beyond the first deadline which was agreed upon in the papers. This as a consequence disrupts the intended schedule.
There are a lot of causes for delays. Among them are defective plans, permit approvals, and factors beyond man’s control (weather, unforeseen events, etc.). Such claims lead to a loss in productivity or finances on the client’s end.
Though no one has control over such situations all the time, they can, however, cause a lot of expensive insurance claims. They can also result in serious litigation for the company.
Damage claims
If a contractor causes any damage to the property whilst completing a project, the client might hold them liable for such damage by filing a damage claim. If a subcontractor caused damage, the client might be responsible for the damage provided they don’t have insurance coverage.
Price Acceleration Claims
These claims take place when the project budget is expected to increase to complete the job either on time or early. The client can file the claim since they are the ones who are carrying the costs of the expedited work.
Claims pertaining to differing site conditions
When the actual condition of the project site differs from what the client conveyed in the contract, a claim for differing site conditions can be filed as that can arise due to the difference. For instance, if the client said the job site is in a very good state and the contractor shows up at a place that is in shambles.
In such a case, it is going to be quite expensive to not only make the foundation but also remove debris. If the job site is say grass and the place is a sandpit, then it will be costly to make a foundation. The general contractor will file the claim.
These construction claims are the most common ones companies and other parties involved in construction projects in the United States face. This is why after the COVID-19 pandemic, construction projects, companies, and contractors are doing their best to implement dispute avoidance.
Other claims entities in construction can face
For contractors, prevention is the key to averting the lengthy process of fulfilling insurance and construction claims. To help contractors in this matter, experts have decided to explain the less common insurance claims that they might deal with during a construction project:
- Subcontractors not completing their work to a reasonable standard (as the contract states).
- Construction defects (i.e. an issue in the design, workmanship, materials, or all of them used on a project).
- Builder’s risk claims involve claims of fires and explosions, natural disasters, vandalism, theft, or other violent events during a construction project.
- Contractor pollution liability results in third-party injury, property damage, the need for legal defense, and cleaning up expenses.
- Claims for equipment and tools insurance due to theft and/or vandalism, broken/damaged tools, damages to rental tools, and the expense of time lost due to issues with tools and equipment.
Conclusion
These are the claims entities involved in construction will face whenever they undertake a construction project. The construction industry is a complex industry. A lot of complications exist in the industry and post COVID-19, they got even more complex. Moreover, any delays or disruptions mean more money lost. This is why dispute avoidance in construction is a must.
