Different Kinds Of Construction Claims Which Construction Companies Should Avoid Paying

It is unfortunate to hear that construction claims are a lengthy hassle, a nuisance each construction company and project manager (as well as a contractor) wishes to avoid. They often constitute part of a lengthy legal process and legal litigations resulting in endless and inconclusive legal battles. There are instances where both companies and contractors stuck in legal battles ended up in bankruptcy.

The harsh and complex reality is that construction projects are complicated, and quick and involve a monumental amount of labor, third-party entities, and subcontractors. There are moments where either an insurance claim or a construction claim may arise.

Are there ways for companies in the construction industry to avoid construction claims? Experts say there are ways they can follow to avoid construction claims. Usually, these cases are often in review and pending approval from courts and construction claims analysts and are only released and disbursed if the case is proven.

Common kinds of construction claims

Here are the main kinds of construction claims that both construction companies and contractors not only need to avoid but also see happening whenever a construction project is in progress:

Claims for damages caused by contractors or workers

In case a contractor causes any damage to the property whilst completing a project, the client can hold them liable for damages via the filing of a claim for damages. In case a subcontractor caused damage, the client might be responsible for the damage. However, the catch is that they shouldn’t have any insurance coverage.

Claims as per differing working site conditions

When the actual condition of the working site is different from what the clients mentioned, a claim for such can be filed. This rises due to the difference between what was told and what is being proved. An example of such is a job site being in a very good state on flat terrain when it turns out the construction site is on rocky terrain with broken plumbing and other issues.

In such an instance, it can become quite expensive not only to make the foundation strong but also removing other debris and fix other things too. Sandy terrains are difficult to work on and will result in expensive foundation work. General contractors can hence file the claim.

Claims for rise in prices

This kind of claim is filed when the expected project budget balloons up to complete the job early, on time, or beyond the deadline. The client can file the claim since they’re the ones carrying expenses for the work in progress.

Claims resulting from construction delays

Delay claims often arise whenever an unforeseen circumstance or circumstances can drag a project beyond the first deadline which was first agreed upon in the contract. This is a consequence that disrupts the normal schedule. 

Numerous causes exist for these delays. Defective plans, delayed permit approvals, and other factors which are beyond the control of humans (weather, other events beyond the control of man). The claims arising from such lead to lose in productivity and even hurt the financial health of the parties involved.

Though not everyone has control over such situations most of the time, they can cause a lot of damage and result in expensive insurance claims, as well as serious legal issues.

In which countries are such construction claims common?

Such kinds of construction claims are quite common in projects across the United States. They took place for two years after the 2008 recession and during and after the 2020 COVID-19 pandemic. Canada also faced them, especially in Calgary, Edmonton, and Toronto where numerous projects were put on hold.

Numerous construction companies, project management companies, managers, and contractors are doing their best to help implement best practices in dispute avoidance via quantum analysis. In the middle east, these things are also done in the same manner. Though, incidences of claims there are being controlled thanks to effective rules and laws.

Conclusion

These are the kinds of construction claims construction companies, businesses and contracting companies in leading nations across the world are looking to avert. In the Middle East, effective governance is helping put all this under control and ensure nothing goes out of hand ever again.