Damage to Work in Place
Construction projects can sometimes be chaotic. Damage to work in place is not uncommon, sometimes caused by equipment, another trade, or weather conditions. The question of who should bear the cost of such damage can be difficult to answer, leading to disputes.
Who Has The Duty to Protect Work in Place?
It depends. Implied in every construction contract is an inherent duty to take reasonable steps to protect work and avoid damaging the work of another trade. For instance, if a concrete flat work subcontractor chooses to pour a slab right before a thunderstorm and fails to cover the newly-poured concrete, there will not be much sympathy when the work is damaged. However, what happens if that same contractor sets void form, which cannot get wet, and the site floods repeatedly because the general contractor failed to protect the site or scheduled the work out of sequence?
The contract usually provides guidance. This is a familiar provision: "Contractor agrees to furnish continuous and effective protection at all times for its work-in-place and all materials stored for use under this contract, and to bear and be solely liable for all loss and/or damage of any kind to said work and materials occurring at any time prior to the final completion and acceptance thereof." This does not require a contractor to wrap the site in plastic bubble wrap. But reasonable precautions should be taken. In the event the work-in-place is damaged by an occurrence that would have been prevented with such precautions in place, the contractor will have to eat the cost to repair or replace. However, often damage occurs even when reasonable precautions are taken. If an excavator drives a backhoe over wet concrete, no amount of bubble wrap was going to stop him. It is almost always a factual analysis comprised of two questions: (1) What reasonable precautions should the contractor have taken, and (2) Would those precautions have prevented the damage from occurring?
Additionally, contractors have a duty to avoid damaging the work of others. For instance, the contract might provide: "The contractor shall take necessary precautions to protect the work of other subcontractors from damage caused by operations under this subcontract." The renegade backhoe operator exposes the excavator to liability to both the general contractor and the concrete flatwork subcontractor. Those damages could include not only the cost to remove and replace the affected work, but also delay and disruption damages.
What Happens if the Parties Don't Agree on Responsibility?
If a contractor's work is damaged by another party or weather event and that contractor does not believe it should bear the cost of repairing or replacing that work, the contractor should follow the change order procedures of the contract. More on change orders here. Submit a written change order request. Pay close attention to the notice requirements. If the owner or general contractor will not approve the change order, the best course of action usually is to perform the work while reserving the right to seek additional compensation through the dispute resolution procedures of the contract. Even if the right to a change order is clear and the denial frivolous, there is a lot of downside risk to walking off the job. More on that risk here.
Builder's Risk Policies.
Often, especially on larger projects, the owner or general contractor will purchase a builder's risk insurance policy. These policies are also known as course of construction insurance. They provide protection for damages caused by non-construction casualties such as fire, weather, explosions, theft, vandalism - acts of god and men unrelated to the project. Many construction contracts require the purchase of these policies. If the work-in-place suffers severe damage from an outside force, this should be the first avenue of relief pursued.