By Stacy Bercun Bohm and Leslie Tomzcak
Storm trackers dubbed Hurricane Sandy as “the perfect storm,” and she certainly lived up to that forecast. While many sat spellbound watching news reports of a 1,000-foot construction crane dangling from a high rise building in midtown New York, those in the construction industry began to think about the steps that would have to be taken by that building’s project team – and others across the Eastern Seaboard – after the storm to prevent further damage and to repair the damage already sustained.
The following are some suggestions concerning what project owners and construction teams can do in the aftermath of a disaster involving damage to on-going construction projects:
- Determine nature and scope of the damage
- Ascertain the exact cause, nature and extent of the damage
- Prepare an internal damage report listing all damaged aspects of the project
- Take photos and/or video of all damaged areas before they are disturbed
- Determine if invasive or destructive testing is needed to further assess the damages
- Retain appropriate experts to conduct required testing (and consider whether such experts should be retained through legal counsel in order to protect the confidentiality of any reports generated)
- Take immediate action to prevent further damage to persons or property
- Install temporary shoring to stabilize structural elements
- Seal off points of entry (to prevent continued moisture intrusion)
- Confirm that gas and other electrical sources are protected or turned off
- Separate damaged from undamaged property (if possible), and set aside the damaged property for examination by applicable insurance carriers
- Determine if indoor air quality or moisture levels have been affected
- Keep a record of all expenses incurred in mitigation efforts
- If applicable, and upon the advice of qualified professionals, notify occupants/tenants as to whether the property is safe for continued occupancy
- Determine availability of insurance coverage and notify all applicable carriers.
- Obtain copies of all applicable insurance policies (such as builders’ risk and other property insurance, business interruption and any other policies carried by the owner, contractor and lower tiered subcontractors)
- Send written notices of claim to the carriers, in the form and manner required by the various policies, as soon as possible after the storm (as failure to do so could provide the insurer a defense to coverage)
- Keep proof that you provided the notices of claim (including copies of the letters and date stamped proof of mailing)
- Follow up with the carriers and obtain claim numbers
- Respond in a timely manner to carriers’ requests for information, but be sure to seek advice of counsel so as to avoid inadvertently voiding coverage
- Analyze applicable construction agreements, bonds, warranties, leases or other contracts
- Send required notices under those agreements (i.e., notice of “force majeure” delay in construction contracts)
- Determine who is responsible for repairing the premises if the damaged property is leased
- Determine the appropriate venue and forum for any disputes
- Determine appropriate repair/remediation protocol.
- If the project is salvageable, determine the forces necessary to conduct the repair/remediation
- Determine the step needed to commence the repair/remediation
- Locate qualified, licensed and insured disaster remediation experts to work in conjunction with the construction team already in place
- Determine whether outside sources such as FEMA or other government sources are available to aid in the repair
- Take preventative measures to limit future exposure.
- Obtain insurance which provides coverage for future claims
- Implement peer reviews during the design and construction process
- Provide regular maintenance and inspection of the remediation work
An experienced team of professionals can help you to navigate in the aftermath of the storm. Consult with qualified professionals and experienced attorneys who have the necessary skill, knowledge and expertise to assist you in determining the best course of action for obtaining a successful outcome.
Stacy Bercun Bohm, a shareholder at law firm Akerman Senterfitt in Fort Lauderdale, Fla., focuses her practice on drafting and negotiating complex construction, design and development contracts, construction and real estate litigation, indoor air quality, and project development and administration matters.
Leslie Tomczak, also a shareholder at Akerman Senterfitt, represents developers, contractors, subcontractors, and design professionals on a range of complex construction contract, project administration, and litigation matters.