Masonry Magazine January 2005 Page. 46
Legal Issues
Being proactive as soon as you learn of a potential claim can save your company time and money, as well as provide your lawyer with valuable information at the beginning of a defense.
Having and following risk management guidelines for reporting potential claims to your insurance company, determining who was involved in the construction project (owners, general contractors, subcontractors, specific employees, architects, engineers), and estimating the potential exposure for damages early on can go far in limiting exposure and potentially shift liability to other at-fault parties.
If a property owner calls or writes you demanding that you fix a problem, you may avoid (or at least reduce your chances of) being sued by providing repair or warranty services. Of course, it is imperative that you involve your attorney as soon as possible, as there is the potential of a lawsuit. And, if you intend to seek coverage from your insurance company, make sure that you notify your insurer right away and clear any remediation work with it beforehand. Voluntarily assuming expenses (such as remediation) that may be covered under a policy without first notifying the insurer can void that policy or otherwise make coverage unavailable. Some insurance policies require that you be sued before they will pay any claims, so always check your policy and seek advice from your lawyer before beginning any repair work for which you want to seek coverage.
If the potential claim involves personal injury, again, notify your attorney and insurers as soon as possible, and get as much information as you can from potential witnesses and the injured party. It may be difficult or impossible to find necessary witnesses if you wait the months or years it often takes to go to trial. If you obtain names, addresses and phone numbers in addition to fact statements, necessary witnesses may be easier to find down the road and it may save you on attorney's fees.
Next, read the OSHA reports as soon as possible. If the OSHA reports allege another company caused an accident, then it is best to know this right away. Further, if the injured person reports a minor injury the day after the accident, maintaining copies of statements and reports can help rebut a claim of catastrophic injury by the time suit is filed.
Finally, if you are sued, having internal procedures for who to call and where to send the complaint can keep you from missing important deadlines. An answer usually must be filed within 20 or 30 days, depending on where the case is filed. Make sure that your insurers and your lawyer get copies of all documents immediately. Not acting quickly could result in your company having to pay damages even if it is not liable.
Speak Up
Finally if you are concerned with the work of another subcontractor, the architect or engineer, do not let it go unnoticed by the owner; say something. Not doing so could result in your company being subjected to a lawsuit that you or your employees could have otherwise prevented.
If you are the general contractor and the work performed by a subcontractor is substandard, you could be liable for that subcontractor's poor workmanship. If you are a subcontractor and you notice that another subcontractor is installing materials improperly, let the general contractor, and possibly the owner, know about it. If the poor workmanship of another subcontractor causes damage to your work or makes it appear that your work was otherwise faulty, your company could be sued for that other company's mistake. Further, if the architect or engineer provides plans and specifications that fail to follow standards, building codes or regulations, you could be named in a lawsuit for not meeting those same standards.
You should be aware of other potential problem areas besides the work your company performs. The poor workmanship of another subcontractor could hurt your company, and the best means to avoid being subjected to unnecessary risks caused by others is to speak up.
These are just a few suggestions to get you started. They are just that - suggestions and may not consider every aspect of your company's needs. It is important, therefore, to sit down with an attorney to discuss which strategies will work best for you.
Tammy L. Tomblin is an Associate with the law firm Jackson & Campbell P.C., in Washington, D.C. She specializes in insurance coverage related to construction, toxic tort and environmental contamination. She may be reached at ttomblin@jackscamp.com.
This article is not intended to provide legal advice, but to raise issues on legal matters. You should consult with an attorney regarding your legal issues, as the advice you may receive will depend upon your facts and the laws of your jurisdiction.
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