How to Document a Construction Delay in Completion or Soft Cost Claim

Developers often run into trouble when they make claims for delay in completion or soft cost claims.  These claims are triggered when damage to the construction causes a delay in the planned completion date.  Many of the problems associated with proving these claims can be minimized by meticulously documenting the damage and recovery efforts beginning immediately after the incident.

Pictures, journals, & schedules

Here’s a list of things you should be doing to document and support a construction delay in completion or soft cost claim:

1. Photograph and/or video all of the damaged areas on a regular basis.  (Daily if possible.) Keep all of the files on a computer in folders with a folder labeled for each day.  Attempt to show damage, restoration progress, and how the delay affects other parts of the project as well.  Try to think in terms of how the delay affects undamaged areas, and then document those effects as you note them.
2. Give every person on the job site a pocket sized spiral notebook and pencil.  Instruct workers to track their daily time and exactly what their daily tasks were, how long they took, and the area of the building in which they were working.  Instruct managers to note overall progress, identify any delays, note decisions made regarding subcontractors, delivery of orders, and changes in work schedule.  No item is too small to document if it catches the manager’s eye.
3. CPM schedules can be your best friend or worst enemy.  Immediately bring in an outside forensic engineer (with qualifications in scheduling) to oversee all changes to the CPM schedule from this point forward.  The immediate involvement of a forensic engineer is critical because if your general contractor may have any liability related to the incident that caused the loss, it is in his best interest NOT to reflect project delays in the CPM schedule as attributable to the incident.  General contractors may try to tie delays to other issues or simply not adjust the milestones or completion dates.  Failure to adjust CPM schedules can result in faulty foundation for a delay in completion claim because the claim will be built upon inaccurate construction schedules that can fall like a house of cards at settlement time.

If you’re a manager, owner, or “clerk of the work” on a construction site, let me know if you have questions.  Or better yet, share some of your tips for record-keeping for insurance claims, below, in the Comments section.  I’d really like to hear from you.

Tagged as: business interruption, claims process, construction, contractors, delay in completion, documentation, linkedin, soft cost

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