Trisura Guarantee Insurance has published its third guide for construction contractors – this time, the guide has tips on how contractors can handle project shutdowns during the global pandemic.
The guide, just like the previous two, contains tips that brokers can share with their contractor clients.
As with any construction development, if construction work is ordered to be stopped or suspended by authorities or owners, or due to a lack of resources, contractors should maintain proper communication with everyone involved in the project – this means project owners, subtrades, surety, and suppliers.
Trisura has recommended contractors refer to their executed contract, subcontracts, and purchase orders to understand and provide any notices of delay, applications for extension of time, and claim for costs (if applicable). Reviewing these options with a lawyer is highly suggested. Contractors should also document which notifications were sent and to whom they were sent. The potential costs for site shutdown and maintenance must also be taken note of and shared with the project owner.
Contractors are additionally advised to keep copies of their insurance policies, and they should review with their broker any coverage limitations in the event of a work suspension.
In addition to communicating shutdown orders, contractors must also stay on top of protecting the project, Trisura said. Contractors should prepare a written plan which outlines how the project, materials, and the people involved would be protected once the work is suspended. An inventory of the materials and equipment should also be performed, and insurance lists should be prepared to ensure protection from theft or vandalism. Emergency contacts should also be made available on-site.
On-site safety must also be ensured. Things like site signage, safety rails and barricades, site lighting, climactic controls, temporary heating, temporary filters, and temporary roofing/cladding are all secure and appropriate once the site is shut down. Temporary backfilling for any open excavation on-site should also be considered to prevent accidents. Contractors should also contemplate shutting off domestic water supply to avoid any leaks during the shutdown.
Trisura has advised that contractors should consider site monitoring, even if the work site is closed off. Site security is one option, but video surveillance is a good alternative, the insurance company suggested. Keeping a log of site visits during suspension of work can also help. Apart from security reasons, contractors should also closely monitor the site’s water level for any possible flooding.
Handling a suspension does not mean project management abruptly ends. Trisura called for contractors to document all of the steps they have taken and their costs to preserve the work. Contractors should take time to catch up on change orders and updating quotations, revised change request submittals, and change logs. They might also want to hire construction claims consultants to aid in scheduling updates and claims preparation. Processing invoices for subcontractors and suppliers is something contractors must also keep in mind, as well as ensuring they have the right certificates of insurance, statutory declarations, and workers’ compensation clearance certificates.
Trisura has also offered some general advice for contractors in the event of a project shutdown, which include:
