Mortar and Bricks Litigation in Construction Firms


Commercial real estate law

Mortar. Cement. Drywall. Insulation.

The building of buildings.

Construction is big business. According to a national statistics website, the construction industry rakes in $1.7 trillion in annual revenue. The construction of buildings itself is a $750 billion industry, with over 211 thousand companies competing, some on a local, some on a national level.

California is home to the most construction companies with a little over 70,000. Florida is next with over 51,000 and New York comes in third with over 43,000. They are three of the most populous states, with strong economies and an influx of new residents every year.

However, in spite of this much revenue, the construction industry had shrunk considerably during the Great Recession. In fact, between April 2006 and January 2011, the construction industry laid off about 40% of its workforce. This is in large part due to the economic recession, where much less capital was being invested into new buildings.

In large part, the recession was due to the collapse of mortgages and the defaulting on banking institutions.

Construction is hard work. Its members perform mechanical tasks every day, sometimes with extreme regularity. Its stands to reason then, that this work sometimes leads to accidents. A slip, a fall. The wrong tool used here or there. Or something so outside of worker’s power that it seems almost silly to find him or her at fault.

Some insurances, however, are as forgiving as a block of granite.

Fortunately, there are some lawyers willing to fight for the rights of construction workers.

In 2015, the American Arbitration Association administered 551 construction industry cases with claims of $500,000 or more. The largest mediated construction case was for $2.6 billion, while the largest arbitration case was for $96 billion. The total value for all claims and counterclaims in 2015 was $5.5 billion.

Arbitration is a form of alternative dispute resolution where two parties make their case to an independent person or groups of persons to resolve the conflict. In arbitration, the parties agree to be bound by an arbitrator’s decision. Arbitration as a form of conflict resolution removes it from the court system.

Arbitration is the preferred conflict management resolution in the construction industry. The median resolution time for arbitration cases for the construction industry was 232 days or a little less than eight months.

For construction companies, employing the right insurance company can save on money and time. Builders risk coverage is coverage that protects against the damage or destruction of materials deemed necessary by the building company for the construction of a property. Builders risk coverage is often written for a period of one year for a minimum period of one year for the construction of a new property or alterations to an established one.

But even with builders risk coverage and other forms of insurance overage, conflicts do arise between construction companies and insurance providers. In these cases, a construction law firm will step in.

A construction law firm is a law firm that specializes in construction law–which is not the kind of law that is most popular or well traversed. A construction law firm has lawyers who represent construction companies when they have a dispute with the insurance company.

Lawyers for construction companies often represent construction companies in court or in even more common cases, in arbitration. It’s important for construction companies to be well-represented, as their cases often involve millions or even billions of dollars. Some questions to ask if you believe you need a construction lawyer include:

  • Has the insurance company failed to support a legitimate claim?
  • Have I lost millions of dollars for an issue the insurance, I believe, should have covered?
  • Has the insurance company attempted to harass me through letters or phone calls?
  • Have the losses on an accident site exceeded what was reasonable and why didn’t insurance cover it?

A construction law firm in this case will be helpful in discerning what is an actionable case and what may not work in an arbitration setting. They also will prep your team for any interviews you have to give, prepare a case that can be presented to the arbitrator, and lead to positive result for your construction company.

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