LEGAL ISSUES


Seven Key Issues for Construction Professionals to Consider When Dealing With COVID-19


By Jason M. Adams, Esq., Gibbs Giden B


y now every construction profes- sional has been inundated with articles regarding the impacts


of COVID-19 on the construction industry. Te sheer volume of infor- mation is overwhelming and changes by the hour. Tis article is intended to summarize the key issues affecting construction professionals and serve as a general roadmap for navigating the crisis.


1. Determine Project Status Te first consideration is whether


the construction projects at issue are allowed to proceed given “shelter in place” and related orders. Te current consensus in California


appears to be that Gov. Newsom has deemed construction to be essential and, therefore, exempt from California’s “Safer at Home” order. Tere is some debate as to whether the governor’s order takes priority over contradictory local (city and county) orders. If the project owner or a public entity repre- sentative orders the project to shut down, the parties will need to make a fact specific determination regarding whether to proceed at that time. If the project proceeds, employee


safety is paramount. Te parties must comply with social distancing (six feet), refrain from holding meetings, and close the project to the public. Anyone who can work remotely should be encouraged to do so.


2. Review Insurance Policies Tere is a glut of information online


containing some variation of a headline stating that “there is no insurance coverage for coronavirus.” Tis position


16 May/June 2020


is not necessarily accurate. All policies are different and should be analyzed considering the specific facts and damages at issue. Construction professionals should


promptly review their insurance policies with their risk management team (risk manager, insurance broker and attorneys) to determine whether there is potential coverage.


Construction professionals should promptly review their insurance policies with their risk management team (risk manager, insurance broker and attorneys) to determine whether there is potential coverage.


If there is potential coverage, then


a claim should be reported to preserve the insured’s rights under the policy. Some policies and lines of coverage have short notice and reporting periods that could be waived if a claim is not timely made. Once notice has been given, steps


should be taken to prepare the claim. Develop a timeline and track all pertinent facts and damages as they arise as it is easier than recreating the history of the claim later. Document everything and organize the data in a cohesive fashion. Te more thorough and profes- sional the claim, the more likely the insurance carrier is to give it priority.


3. Review Contracts COVID-19 related issues will


likely implicate a wide variety of contractual provisions. Construction professionals should carefully review their contracts to determine whether there is a force majeure provision that governs the actions of the parties during a pandemic. Notice, delay, mitigation and dispute resolution provisions are also likely to come into play. Tis is an unprecedented situation, and cooper- ation and compromise will be the key to completing projects in the most efficient and cost-effective manner possible.


4. Consider Employee Related Issues


Again, employee safety is the top


priority while navigating this crisis. Te California Health and Safety Adminis- tration (Cal/OSHA) protects employees from any conditions that provide imminent danger. Moreover, employees may be eligible for protection under the federal Family and Medical Leave Act (FMLA) and California’s corresponding state laws if an employee is deemed to have a serious health condition, which may include COVID-19 depending on the circumstances. Employers should regularly update


employees as to the steps that are being taken to protect their safety. Implement social distancing protocols and facilitate work from home arrange- ments where possible. Encourage sick employees to stay home and seek treatment if necessary.


5. Review the Company’s Lease


During this time of uncertainty,


all opportunities should be explored to minimize overhead. Along those lines,


California Constructor


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