How Bridge Contractors Can Limit Risk During Challenging Times

Anyone who works on bridges deals with risks every day. It’s a part of life when building and repairing these perilous structures, handling difficult tasks in challenging locations, and managing complex projects.

Much of the risk is mitigated by:

  • Following safety standards on job sites.
  • Ensuring that project requirements and expectations are defined in carefully crafted contracts.
  • Making sure there’s adequate insurance coverage should unexpected things happen even after safety and contractual precautions are taken.

Following safety standards helps prevent accidents and injuries on job sites. Having well-written contracts — coupled with adequate insurance coverage — can help limit or share risks related to things like labor shortages, unexpected weather events, issues with supply chains, and actions taken by governments that halt or limit work on construction or repair projects.

The challenge that bridge contractors face today is whether the current safety measures, contracts, and insurance coverage are adequate for dealing with the new issues they may have to deal with right now. This includes threats related to COVID-19, extremely challenging economic conditions, and state and local government budgets strained by unexpected pandemic care expenses and reduced tax revenue.

Here are steps you can take to ensure that you and your business are able to face anything that lies ahead.

Safety requirements

The Occupational Safety and Health Administration (OSHA) and state agencies are providing updates on how to keep workers safe during the constantly evolving COVID-19 pandemic. It includes information on social distancing and the right equipment needed to keep people on job sites safe and healthy, along with information on cleaning products and techniques that can kill the coronavirus and prevent its spread.

This is a different type of guidance from what bridge contractors typically expect from OSHA and state regulatory agencies. Instead of being about how to use equipment and do work on job sites safely, it explains how to keep people healthy in the workplace by preventing the spread of the coronavirus. It’s an added layer of job site protection to deal with today’s realities.

Tip: With all the focus on COVID-19, many bridge contracting firms may be putting less focus on standard job safety training than they usually do. Make sure this doesn’t happen. Regular workplace safety updates are particularly critical now, when workers may have been away from job sites for extended periods of time and could have forgotten important job safety requirements. 

Contracts

Most public works contracts include information about how bridge contractors can be relieved of their contractual obligations for unexpected project delays. The language often appears in clauses known as: 

  • Force Majeure.
  • Acts of God.
  • Acts of Government.
  • Delays and Extensions of Time. 

Most federal contracts include verbiage that excuses delays outside the contractor’s control or provides relief for required construction changes. State contracts typically offer similar protections.

Certain bridge project contracts already include language related to things like unusual delays in deliveries or causes beyond the contractor’s control, issues that could result from the COVID-19 pandemic or economic crisis. A few may even specifically mention things like pandemics. 

The most important thing you can do right now is work with your legal counsel to understand the specific language in your current contracts and plan for how to handle pandemic and financial issues as they arise. You should also consider adding clauses to future contracts to provide more protection for your business, along with definitions around how to handle unexpected issues.

When it comes to dealing with current contractual disputes on bridge construction sites, you need to do three things to protect yourself, your business, and the employees who depend on you:

  1. Provide notice. The first thing you must do when something unexpected happens (after you ensure that everyone is safe) is provide a timely written notice as required by your contract. Make sure you send it in the proper form (print or digital) to the right person (typically an identified contracting officer) using the defined means (mail, certified mail, or email). Ensure that your notice is delivered in the timeframe required by your contract. You may need to provide a notice more than once if conditions related to the original event change or new events occur. It’s better to be safe than sorry. Don’t assume that things that happen at a later date are covered by an earlier notice.
  2. Take steps to mitigate the issue. Once you’ve provided notice about the issues you face, you need to actively take steps to mitigate the delays, damage, and financial problems that could result from them. Typically, you will not be excused from your contractual responsibilities, even in challenging circumstances like the coronavirus pandemic, if you can’t prove that you took steps to reasonably mitigate problems arising from the events. For example, if your asphalt supply is cut off or delayed because a supplier closes down due to the pandemic, diligently try to find another vendor and look for reasonable substitutes that can be acquired at a decent cost and in an acceptable timeframe. Even if the contracting parties disagree over the cause, extent, or price of a change or delay, contractors must continue working to reasonably resolve the issue.
  3. Prove delays or damages were caused by claimed events. The fact that there is a pandemic — or another obvious reason for a delay or default — does not automatically excuse contractors from meeting their contractual obligations on bridge projects. They’re required to prove the delay or default was actually caused by the claimed event. Collecting, saving, and documenting proof has to happen at the same time that you’re providing notice and taking steps to mitigate further damage. Start by maintaining documentation, records, and files. There’s no substitute for keeping records in real time. Your documentation about the issue should be clear and include enough detail that people who are not involved in the situation will be able to understand what happened, agree with your position, and rule in your favor. 

What if a contract you’re working under doesn’t have a direct relief clause? First, work with your legal counsel to look for contractual language related to any applicable changes clause. Next, you and your lawyer should seek out any governmental emergency relief acts or legislation that could support your case. Finally, the common law doctrine of frustration might be a possibility. It allows a contractual obligation to be excused or discharged when some aspect of the contract is not true or fundamentally flawed.

If none of these things work out, you may need to turn to your insurance to help cover your losses.

Insurance coverage

Bridge contractors face unique risks. That’s why it’s critical for you to have insurance coverage tailored to the specific needs of your business and the type of work you do. At a minimum, you should consider the following types of coverage for your company. Check with your insurance agent to find out for sure.

  • Business property insurance is the base policy that every contracting business should have. It covers your business location against damage to it (such as extreme weather) and makes it possible for you to add coverage for other things your business could face.
  • Business interruption insurance helps replace lost income and other things when a business is impacted by a covered issue. 
  • General liability insurance protects your operation in case someone makes a claim that your business has caused them harm, injury, or loss and they initiate legal proceedings against it. This could include: 
    • Injuries on your property or job site, such as slips or falls.
    • Bodily injury or property damage caused by the work your company does or an employee’s activities.
    • Contractual issues.
    • Injuries or damage to property because of business-related errors.
  • Worker’s compensation insurance is mandated coverage that protects you and your employees when there is a work-related injury.
    • Employees benefit because it pays for medical care costs, lost wages, and more.
    • Employers avoid legal expenses and have peace of mind knowing that employees are receiving the care and support they need during challenging times so they can return to work.
  • Commercial vehicle coverage protects the trucks and other costly equipment, including lifts, used on job sites against accidents and damage.
  • Umbrella insurance is additional coverage that provides protection beyond other policies. It covers things like unusual injuries, property damage, lawsuits, and personal liability situations. This could be the insurance that bridge contractors need to help cover them against the unexpected things they could face during these challenging times. Your insurance agent will help you know for sure.

The pandemic and economic issues related to it are making things more challenging than ever for bridge contractors. You owe it to yourself to take steps to prepare for — and protect against — them.

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