Staying Healthy – Protecting Your Construction Company During a Pandemic

More About | Construction | Real Estate | COVID-19

While many federal, state and local authorities have issued stay at home directives, the construction industry has benefited from being deemed an “essential service,” effectively allowing many construction companies to continue work on job sites.

To protect their employees and keep them healthy, contractors are working closely with owners, other trades and government regulators to develop and implement new safety protocol such as:

  • Adding hand sanitizing stations
  • Implementing temperature checks at the start of work
  • Increasing the number of portable restrooms on job sites
  • Prohibiting the sharing of tools
  • Mandating social distancing
  • Providing masks and gloves
  • Staggering work schedules

In addition to protecting their people, contractors are laser-focused on protecting their companies. Although most job sites are still open, the rapidly changing situation could result in a shutdown of job sites in the days to come, highlighting the importance of understanding contractual provisions and relief that may be available in the event of stoppage.

Much has been written about Force Majeure provisions as they relate to COVID-19. While these clauses generally provide an excusable delay in construction and allow for additional time to complete projects, most will not compensate for costs incurred related to a delay.

Other contractual provisions may exist, which could provide the opportunity to recoup costs incurred related to work delays, as well as remaining profits to be earned on projects. Construction companies should read contracts in their entirety and fully understand specific provisions, such as emergency clauses and termination clauses in anticipation of an order to close job sites.

In addition to understanding contractual agreements for projects in the process, the following strategies should be considered to protect construction companies:

  • Communicate with the owner and other trades – understand expectations and challenges
  • Document daily progress on jobs – expect the unexpected and use technology to memorialize progress on job sites.
  • Seek payment for work completed – timely billing has never been more important.
  • Assess the impact supply chain restraints will have on projects – delays in materials could have a significant impact on the ability to make satisfactory progress on a project and unexpected deliveries of materials to job sits could increase risk associated with cash flow and theft.
  • Understand the lien law – regulations vary by jurisdiction.
  • Consider performance bonds –risk of interruption can be mitigated through performance bonds, but it’s critical to understand the notification requirements associated with performance bonds.

While many construction companies are benefiting from the ability to continue operations under current regulations, the uncertainty that comes with each day highlights the importance of protecting your construction company during this pandemic.

For more information on how to protect your company, reach out to us at construction@dhg.com.