7 Tips to Successfully Manage Construction Claims
The world of construction is full of complexities, and any of these complexities can lead to a claim, which gives rise to Construction Claims Management. Managing a claim in construction stands as the pinnacle of any project.
However, if the claim was not managed, the result could be losses, and even lawsuits could arise. Thus, it was essential to embrace initiatives that might help in the management of the claim, even in the construction sector.
DISCERN WHAT CONSTRUCTION CLAIMS REFER TO AND HOW THEY CAN BE MANAGED EFFECTIVELY!
Construction Claims – Simply Explained
A claim in construction refers to a demand for additional compensation. This compensation can either be for finances, time, or for both. This happens because of a possible breach of contract from one of the parties involved in a construction project. That is why it is emphasized that the contractual terms are clear and concise so that the occurrence of a claim is prevented.
As mentioned above, this claim comes from a party that is involved in the construction process. It means that it can be a contractor, subcontractor, or the project’s owner.
Recurrent Construction Claims Types
First of all, know that understanding a construction claim is essential, as it will help you to avoid many issues down the road.
That is why we have outlined some common types of claims in construction, which are:
- Faulty work claims
- Unforeseen events claimsÂ
- Design change order claims
- Payment disputes
Origination of a Construction Claim
Numerous issues can stem from a construction claim. In this section, we have outlined the top causes.
Inadequate Contractual Drafting
When contracts are not drafted adequately, this leads to a construction claim. It can either be because of ambiguous language or a confusing term used in the contract.
Unnecessary Delays
A delay in construction means more expenses, which leads to more labour hours. So, a delay contributes greatly to an expensive claim
Scope Creep
If project specifications are not delivered as per the agreement, this can also lead to a claim
Insufficient CommunicationÂ
When the construction objectives are not clearly defined, this can escalate and result in a claim.
Tips to Successfully Manage Construction Claims
Here are some of the most productive tips to incorporate into the Construction Claim Manager Process:
1) Effectual Contractual Management
In any construction project, if robust contractual management is implemented, it elevates the chances of success to a great degree. A contract must clearly state information regarding the following:
- Magnitude of work
- Timeline
- Payment schedules
- Specifications, if any
- Conflict resolution procedure
Every aspect must be defined clearly so that all parties understand their contractual obligations.
2) Systematic Documentation
In a Construction Claim Process, documentation plays a key role. Organized documents and record keeping can be the difference between a successful or unsuccessful consumer claim.
Thus, it is crucial to maintain systematic and updated documentation and keep detailed records.
3) Seamless Communicates
Effective communication ensures that a claim will be managed successfully. It makes sure that all the stakeholders, whether its contractor, client, or a supplier is on the same page.
Proper communication medium and regular meetings are the best way to manage a construction claim.
4) Observant Risk Management
A construction project is always prone to risks, and that is why proactive Risk Management becomes critically needed. And, it becomes a necessity to put in place risk assessment strategies throughout the project.
These strategies will timely identify risks, assess them, and suggest mitigating measures.
5) Technology Leverage
The construction industry is currently undergoing a technological revolution. This technology provides a modern way of dealing with the management of construction claims. Technology is not only beneficial in making the process simpler but also efficient.
The timelines and paperwork involved in a project can be managed through the critical path method, among others. On the other hand, Xactime, a tool specifically designed for efficient claims management, can easily manage claims.
6) Control Over Change Order
A change order in a construction project can happen in an instant. The reason can be a client demand, unforeseen event, or any other uncontrollable factor. That is why it is emphasized to document as well as notify all the stakeholders about a change order.
By doing this, any possible risks or liabilities associated with a change order are identified and timely addressed.
7) Early Conflict Resolution
This holds a great deal of importance in construction claims. It means that issues are pointed out and addressed promptly by contractors. Thus, preventing these issues from turning into claims.
A clear process is laid out by contractors that helps in identifying and resolving an issue. This process requires an efficient laid out requires the following:
- Communication
- Teamwork
- Problem-Solving aptitude
Preventing Future Construction Claims
Even when everything is done right, a claim can still arise. It’s best to look at this as an opportunity to learn from and assess what one can do differently. This will go a long way in improving the management of the project and steering clear of any potential claim arising in the future.
After a claim has been resolved, you need to evaluate the following:
- Circumstances that lead to a claim
- Was there any indication or early warning signs
- Where did your claim management lacked
This evaluation will help you, if not prevent, then to greatly reduce the severity of claims in construction.
Get Professional Services
Note that construction claims, by nature, are complex, which necessitates the involvement of professionals. A professional has the expertise to handle planning, scheduling & estimating for any level of construction project. And, not only this, but their expertise also extends to claim management in construction.
Claim management in construction is an intricate process that demands careful consideration of multiple factors. That is why the cruciality of a skilled and knowledgeable professional cannot be overstated.
CONTACT US FOR THE DEFINITIVE ASSURANCE OF A STRUCTURED CONSTRUCTION CLAIM MANAGEMENT.
Ending Remarks
Construction Claim Management is a complex undertaking that encompasses extensive planning and legal knowledge. This helps in making sure that a construction project has followed all the regulatory standards, which minimizes the risks and decreases the chances of claims. In the ever evolving realm of construction, vigilance is crucial for managing construction claims. And, it can be achieved by following this informative article!
