Trend 1: Purchase Limits Required by Contracts
- Contracts are becoming more complex, with purchase limits and requirements that can impact contractor liability:
- Limited coverage: Contracts may limit coverage for specific risks, leaving contractors exposed.
- High deductibles: Contracts may require high deductibles, increasing contractors' out-of-pocket expenses.
- Specific requirements: Contracts may require specific insurance policies or endorsements, which contractors must secure.
- Construction projects are being repurposed or renovated more frequently, introducing new liability concerns:
- Change orders: Contractors must navigate change orders and ensure compliance with evolving project requirements.
- Design and engineering: Contractors must assume responsibility for design and engineering errors.
- Permitting and code compliance: Contractors must ensure compliance with changing building codes and regulations.
- Construction costs are increasing, impacting contractor liability:
- Material costs: Rising material costs can lead to cost overruns and disputes.
- Labor costs: Increased labor costs can impact project profitability.
- Inflation: Inflation can erode profit margins and increase liability exposure.
- The construction industry faces a labor shortage, leading to:
- Training and development: Contractors must invest in training and development programs.
- Subcontractor management: Contractors must effectively manage subcontractors and assume responsibility for their work.
- Risk allocation: Contractors must allocate risk and share liability with other project stakeholders.