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Decreasing the Risk of a Construction Defect Claim

Construction defect claims generally stem from a building owner or tenant discovering an issue with property that your company worked on. Issues might include water intrusion, soil issues or deterioration of the building itself caused by design failure, improper installation or the use of inadequate materials.

While construction defect claims are common and come in many different shapes and sizes, there are a number of steps that can be taken in order to minimize your risk.

KNOW THE DETAILS

Construction projects come with a wide range of moving parts and stakeholders. It is important to understand your level of accountability and potential risks before starting a new project.

Before accepting work, take time to:

  • Review your insurance policies to find potential coverage gaps.
  • Confirm the legal and financial responsibilities within the contract.
  • Confirm that all stakeholders are contractually responsible for their own work.

SELECTING SUBCONTRACTORS

It is important that all parties involved in a project can be depended upon to produce quality work. For contractors, this means being selective and thorough.

Always conduct thorough research on companies that you are considering working with. Be certain to check their credentials and certifications, and make sure that they are financially stable.

It is also important to check subcontractors’ quality assurance and quality control programs to make sure that they are up to your own company’s standards. Review any contracts with subcontractors thoroughly.

BE MINDFUL OF MATERIALS

One common reason for construction defect claims stems from contractors using materials or equipment that do not meet design specifications or building code requirements. Inadequate materials can result in serious accidents.

It is imperative that all parties working on a project take the time to select, inspect and store materials properly. Be certain that you understand manufacturer guidelines and warranties, and that the products being used are compatible with one another.

DILIGENT DOCUMENTATION

Make sure that your company is properly documenting the project. This paper trail should include inspection forms, logbooks, material purchase orders, training documents, specifications, drawings and any other pertinent information.

It is not uncommon for a construction defect claim to be made many years after a project was finished. As such, your company should be sure to file and retain these documents.