4 Factors to Consider to Mitigate COVID-19 Risk & Liability How to prep for better project outcomes amid the pandemic
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ith commercial construction back to work and projects across the country continuing to add jobs, one study indicates 56% of industry losses since the beginning of the pandemic have been recovered. This indicates owners face new or different aspects of liability due to the COVID-19 environment. While many contracts account for the effects of force majeure events, the unique nature of this year’s disruptions and return-to-work adaptations may open the door to some equally unique claims or litigation. New and frequently changing parameters across the industry will require all parties—including owners, developers, design professionals, and contractors— to adopt a targeted approach to their preparedness, while maintaining flexibility to stay successful. One of the riskier things construction business owners can do right now is to view the return to work as a return to normal, whether that means disregarding safety and health protocols or failing to be on top of the primary issues impacting others across the industry. With so much uncertainty about longer-term impacts, communication is essential through every level of the project to make sure all team members are in sync with the changing parameters. Adapting operations and expectations is worth the time and consideration in order to help reduce a project’s risks. While factors outside of personal control continue to influence all facets of the work, a large part
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of making sure that COVID-19-related liabilities don’t continue to severely impact a project is careful oversight of vendors and contractors. Though many of the risks facing each are specific to their own work, the nature of litigation means all parties involved in the building project are susceptible to being brought into a suit. Their lapses are not separate from the project itself, particularly if owners have also failed to set the tone through their own preparedness for the potential impacts on the project. What does preparation look like under current, and potentially ongoing, circumstances? The following four factors can help put your team and its projects in the best possible position to successfully navigate the effects of the pandemic. For ongoing projects, begin by thoroughly documenting the project’s progress—as well as any disruptions and delays that can be attributed to the pandemic’s impact—to establish a clear record. This includes segregating known or claimed impacts preshutdown to those impacts created solely by the shutdown due to varying issues and fact patterns and different facets of recovery under each contract. For upcoming projects, accept the reality that time and cost of performance may be higher than in the preCOVID-19 era. Make sure you are knowledgeable about the continued on page 43
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