Construction projects involve a wide range of stakeholders, including owners, contractors, subcontractors, designers, and suppliers—which means there are numerous opportunities for disputes and claims to arise during the course of a project. Construction claims can be costly and time-consuming, and can significantly impact the timeline and success of a project. Here are five tips on how to avoid construction claims.
1. Develop a clear contract
A well-written contract is the foundation of any successful construction project. The contract should clearly define the scope of work, responsibilities of each party, timelines, and payment terms. It should also include provisions for dispute resolution, such as mediation or arbitration.
2. Communicate effectively
Communication is key to avoiding disputes and claims. All parties involved in the project should be kept informed of any changes or issues that arise. Hold regular meetings to discuss progress and any concerns and set aside time to carefully review all reports.
3. Manage change orders
Change orders can be time consuming and sometimes feel insignificant but they can also be a large source of construction claims. To avoid disputes, change orders should be carefully and proactively managed. Establish and follow a change order process that includes clear documentation and approvals so that, if a claim should occur, you will be able to quickly find the change order and related data.
Teams that use our solutions have increased their win rates in disputes by up to 50% and have reduced overall project claims by up to 75%.
4. Monitor project progress
It is important to closely monitor the progress of the project to identify any issues before they become major problems. This includes tracking costs and schedules, as well as conducting regular inspections of work. By reviewing daily and weekly reports carefully, project managers and construction directors will be able to catch potential problems early on.
5. Ensure quality control
Poor workmanship or defective materials can lead to claims and disputes. To avoid these issues, it is important establish and document standards, as well as specs. Ideally, inspection and reporting forms incorporate spec details so out-of-spec work can be immediately identified and rectified. Quality control also includes materials verification processes. Testing and verifying materials before they are used is a proactive and effective way to reduce claims and rework.
By following clear documentation, inspection, and materials workflows, construction stakeholders can avoid disputes and claims and ensure the success of their projects. Of course, it is important to work with experienced professionals, including attorneys and construction consultants, to develop a comprehensive plan for managing risk and avoiding claims.
Construction and engineering firms and Owners that use our solutions report major declines in claims as well as the ability to defend against claims when issues arise. Our solutions include everything from verifying materials to inspecting and reporting on work delivered; we are helping teams throughout the construction phase avoid costly claims. Learn more about how we help reduce claims and defend against issues when they arise.