How to avoid common construction claims

As the owner of a construction business, you likely know a significant amount about estimates, production costs and client engagement. Battling clients in arbitration or open court is probably not in your skillset, though. You also do not want to take time away from your business to manage a construction dispute.

In the construction industry, time and money are often sources of friction. That is, if your company overruns either the budget or the completion schedule, you are asking for trouble. If you do not want to find yourself defending a costly lawsuit, you must know about common construction claims and how to avoid them.

Identifying common construction claims

There are seemingly thousands of things that can go wrong on a construction site. Nonetheless, construction claims usually stem from one of the following problems:

• Exceeded project budgets
• Delayed completion
• Modified work orders
• Unpaid workers or subcontractors
• Damaged property

Avoiding construction litigation

Defending your company against a common construction claim can be a hassle. As such, you are considerably better off by taking steps to minimize potential conflict with your clients. Arguably the most effective way to do so is to set expectations early. That is, you want your bid and contracts to be as carefully drafted as possible. Do not leave your contracts to chance, though. On the contrary, you must be certain that your written agreements are both factually and legally valid.

Planning for potential problems

Even if you engage with your clients and have an airtight contract, you may eventually make someone unhappy. Alternatively, something out of your control may cause harm to your clients. Accordingly, your company should have sufficient insurance coverage. Often, it is a comprehensive insurance policy that keeps construction company owners out of the courtroom.

If you work in the construction business, you may eventually find yourself defending a lawsuit. Still, you can take steps to minimize your odds of ending up at the arbitration table or in court.