7 Areas where Technology is Shifting the Construction Business
November 21, 2018 —
Eric Weisbrot – JW Surety BondsThe digital transformation of the last two decades has taken hold of the business environment in a powerful way. Companies in nearly all sectors are experiencing a significant shift in the way business is done, with a heavy focus on improved productivity, increase profitability, and enhanced product and service offerings. The construction industry has been historically slow to update its processes and business models in-line with other industries, but technology is currently making its long-awaited appearance in the sector. Construction professionals can embrace these new solutions to run more efficient businesses and keep a closer eye on profitability by reducing
common costs over time.
These are the seven major areas where technology is changing construction.
1 - Business Management
One of the most apparent shifts taking place in the construction industry thanks to technology is the advancement of business processes and systems behind the scenes. Construction managers and job site owners have countless
digital tools at their fingertips to help with managing all aspects of the business. This includes more efficient ways to manage material use and equipment inventory, logging subcontractor hours and pay, and maintaining reporting requirements from regulatory perspectives. Many software solutions integrate with older, legacy systems, making this change an easy one for construction businesses across the board.
2 – Jobsite Productivity
Another area of transformation in construction is productivity on each job site. Technology has offered job owners and general contractors more efficient methods to keep track of project timelines as well as subcontractor progress from start to finish. The technology advancements in this arena come in the form of wearable devices that track work performed, as well as mobile devices that help keep the often mundane tasks necessary for a project’s success up to date and completed on time.
3 – Worker Safety
Although wearables are being utilized in several different ways in the construction business, these devices are making a significant difference in the safety of workers. From smart helmets to digitally enhanced eyewear, workers are alerted to potential hazards on the job that they otherwise could not identify. Similarly, augmented and virtual reality solutions are being used to train workers before they arrive at a job, preparing them for safety concerns well in advance. Even though most licensed and
bonded construction workers have appropriate training throughout their careers, the addition of these resources has the ability to further reduce the risks often associated with construction work.
4 – Surveying and Monitoring
Unmanned aerial vehicles, also known as
drones, are being used throughout construction. These digital tools are equipped with cameras to offer a bird’s eye view of a construction site to help with surveying and identifying potential hazards for workers. Drones also help with inspections throughout a project’s progression, offering some reduction in cost and improving efficiencies.
5 – Improved Materials
Technology is also playing a role in the materials used on job sites. The addition of 3D printing has proven beneficial for construction companies, as concrete composites, plastics, and other materials are being printed and used to create structures on-site. This offers a more cost-effective and accurate way to complete a project.
6 – Self-operating Equipment
Some technology firms are making waves in the construction industry because they are currently developing and implementing
autonomous equipment solutions. Heavy machinery, like excavators, bricklayers, and bulldozers, are already being used on construction sites to help ease the burden of the labor shortage in the industry. While these machines are not yet mainstream, the benefits they offer mean they are likely to become a staple in construction in the years to come.
7 – Big Data
Finally, technology is shifting the construction business by way of big data analytics. With the detailed information from new software solutions, wearable tech, and drones, construction site managers have more data than they have ever had. This influx of information offers a way to analyze job site progress, budgets, timelines, and efficiency for companies large and small.
Author:
Eric Weisbrot is the Chief Marketing Officer of
JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.
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Disruption: When Did It Start and Where Will It End?
June 25, 2019 —
Brian Gallagher - Construction ExecutiveIf change is the only constant—as was famously observed by a Greek philosopher circa 500 B.C.—then why single out some changes as “disruption”?
Disruption is about more than just technology; it’s about more, even, than the rapid rollout and development of technology in the past couple of decades. The word disruption refers to processes or products that are fundamentally different from what is currently in use and that render unforeseen, large-scale changes. Early discussions of disruption (the term was coined by Harvard Business School professor Clayton M. Christensen in a 1995 Harvard Business Review article) compared incremental change in existing systems, which are usually supported by established corporations, to innovations that start out as something completely fresh, limited in their appeal and flawed in initial iterations.
The construction industry was—and still is—late to adopt most technologies and late in experiencing overall disruption. It also lags behind other industries when it comes to efficiency and productivity. McKinsey reported that construction is one of the “least digitized industries in the world,” despite employing approximately 7% of the world’s working-age population and representing one of the world economy’s largest sectors. Disruption is likely to be fast approaching now, even for the construction industry. But its delay may confer the benefit of allowing construction companies to learn from other industries’ mistakes.
Reprinted courtesy of
Brian Gallagher, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Homebuilding Still on the Rise
December 20, 2012 —
CDJ STAFFThe National Association of Home Builders reports that spending on private homes was up three percent in October 2012, bringing it to a four-year high. This was part of a trend in which fourteen of the last fifteen months have seen increases in spending on residential construction. Likewise, multifamily residences have seen thirteen months of increased spending, putting it 82% higher than its low, two years ago. In addition to new homes, remodeling is also up, reaching its highest point in five years.
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Real Estate & Construction News Round-Up (12/07/22) – Home Sales, EV Charging Infrastructure, and Office Occupancy
December 26, 2022 —
Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law BlogThis week’s round-up explores decreasing home sales, electric vehicle charging stations, office occupancy levels, and more.
- With home sales dropping and more buyers abandoning their plans, forecasters have rarely disagreed as much as they are now regarding where the housing market is going next. (Nicole Friedman, Nick Timiraos, The Wall Street Journal)
- Contractors and construction technology firms are watching as skilled workers look for new jobs in a turbulent economy. (Matthew Thibault, Construction Dive)
- The ability to conveniently charge electric vehicles away from home is a top concern for many owners, indicating the strong need for an extensive and reliable external charging infrastructure. (Robert Charette, IEEE Spectrum)
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Pillsbury's Construction & Real Estate Law Team
Are COVID-19 Claims Covered by Builders Risk Insurance Policies?
May 04, 2020 —
Jason M. Adams, Gibbs Giden Locher Turner Senet & Wittbrodt LLP and Cheryl L. Kozdrey, Saxe Doernberger & Vita, P.C.If you are an attorney, insurance broker, or other professional representing developers and contractors, then your clients have likely reached out with concerns about losses related to COVID-19. One common question is whether there is potential coverage under builders risk insurance policies.
The short answer is: It depends. As with most questions pertaining to insurance coverage, the answers depend on the specific policy language and underlying facts required to trigger coverage. Builders risk policies are even more fact specific due to the lack of uniformity of base policy forms and endorsements between insurance carriers.
The first step in any analysis is to gather facts and carefully document any impending and potential damages or delays. The facts are crucial because the coverage analysis may vary depending on the specific reason the project was shut down. For example, the analysis would be different if the project was shut down as a result of an express government order, such as those in Northern California and Washington, versus the project shutting down as a result of workers testing positive for COVID-19. Properly analyzing builders risk coverage involves a granular account of the facts and damages, and can require a great deal of hair splitting with respect to specific policy language.
Regardless of the strength of the insured’s facts and damages, or the breadth of its policy language, the policyholder still likely faces an uphill battle in finding coverage for COVID-19 related claims. The unfortunate reality of most builders risk policies is that they are property policies that require some evidence of physical loss or damage to trigger coverage. Whether or not COVID-19 claims constitute property damage will be the subject of great debate and litigation over the coming months and years. The outcome will likely depend on how the insured’s jurisdiction ultimately rules on the litany of COVID-19 cases that have already been filed – specifically, how broadly each court interprets the meaning of “physical loss or damage.”
Although these key issues have yet to be clearly defined by the courts, some policies are better than others and there are specific variables that could affect the likelihood of coverage. For example, some of the more policyholder-friendly insurance programs may contain coverage extensions for delay in completion, business interruption, loss of rental income, or civil authority that may not be tied to the property damage requirement, and which would tend to support coverage for COVID-19 claims.
Even if the insured crosses the initial threshold and can demonstrate a covered claim, the following common endorsements and exclusions may require additional analysis depending on the facts.
- Virus or Pandemic Exclusions: Virus or pandemic exclusions are not as common on builders risk policies as they may be on other forms of coverage. However, they do exist and, if present, result in a significant barrier to coverage. As with the policy itself, every endorsement is different and should be analyzed in terms of the express language contained in the endorsement and the facts.
- Abandonment or Cessation of Work: Most builders risk policies include provisions that preclude coverage in the event of the abandonment of the project or a lengthy cessation of work. As a result, the insured should take steps to articulate to the carrier that the project has not been abandoned, and that there exists an intent to return as soon as possible. The insured should also maintain a record of ongoing project oversight and protection efforts taken during the period when construction operations are suspended.
- Security and Safety Requirements: Many builders risk policies contain provisions requiring the insured to maintain protective safeguards and security protocols throughout the pendency of the project. Safety fencing, lighting and security guards are common examples. The policy should be analyzed to ensure that the policyholder can meet any such requirements during a COVID-19 related shutdown. For example, can the insured continue to staff a security guard? If not, arrangements will likely need to be made with the carrier depending on the language of the policy.
- Insurable Limits: Builders risk policies are typically underwritten based upon the total completed value of the structure, including materials and labor. The insured will need to analyze the policy to consider whether increased material or labor costs as a result of COVID-19 will alter the terms of coverage, trigger any escalation clauses, or result in an increase in premium due. If increased cost projections become apparent, the insured should report these changes to the carrier immediately.
- Extensions of Coverage: The insurance industry was facing a hard market even before the COVID-19 pandemic, which resulted in higher premiums and limited coverage options. The COVID-19 pandemic has only exacerbated these issues and it may be difficult to obtain coverage extensions on projects that have been shut down. The insured should work with its risk management team (risk manager, insurance broker and lawyer) to engage the carriers to negotiate any necessary coverage extensions resulting from COVID-19 related project delays.
To summarize, builders risk coverage for COVID-19 claims is far from certain, but not impossible. Insureds should provide notice of a claim to all potentially applicable carriers in order to preserve their rights. The insured should also report increased construction cost and articulate its intent to return to the project to preserve their escalation clause and avoid arguments that they have abandoned the project. The insured should continue to document its claims and damages, and be ready to substantiate its claims and push back on any coverage denial. Throughout the entirety of this process, the insured should work with its risk management team to get out in front of any extensions it may need to complete the project. In a climate where insurance carriers are receiving an insurmountable number of claims, the insured should be prepared to fight for coverage and not simply throw up its hands in the face of a denial. Given the intense social, legislative and executive pressure to cover COVID-19 claims, there may be a tendency for the courts to find coverage in gray areas, particularly if the insured was fortunate enough to have purchased one of the broader coverage forms referenced above.
About the Authors
Jason M. Adams, Esq. (jadams@gibbsgiden.com) is a partner at Gibbs Giden representing construction professionals in the areas of Construction Law, Insurance Law and Risk Management and Business/Civil Litigation. Adams is also a licensed property and casualty insurance broker and certified Construction Risk & Insurance Specialist (CRIS). Jason represents developers, contractors, public entities, investors, lenders, REITs, design professionals, and other construction professionals at all stages of the construction process. Jason is a published author and sought-after speaker at seminars across the country regarding high level construction risk management and insurance topics. Gibbs Giden is nationally and locally recognized by U. S. News and Best Lawyers as among the “Best Law Firms” in both Construction Law and Construction Litigation. Chambers USA Directory of Leading Lawyers has consistently recognized Gibbs Giden as among California’s elite construction law firms.
Cheryl L. Kozdrey, Esq. (clk@sdvlaw.com) is an associate at Saxe Doernberger & Vita, P.C., a national insurance coverage law firm dedicated exclusively to policyholder representation and advocacy. Cheryl advises insurance brokers, risk managers, and construction industry professionals regarding optimal risk transfer strategies and insurance solutions, including key considerations for Builder’s Risk, Commercial General Liability, D&O, and Commercial Property policies. She assists clients with initial policy reviews, as well as renewals and modification(s) of existing policies to ensure coverage needs are satisfied. Cheryl also represents policyholders throughout the claims process, and in coverage dispute litigation against insurance carriers. She is currently working on some of the largest construction defect cases in the country. Cheryl is a published author and is admitted to practice in the State of California and all federal district courts within the State.
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Court Slams the Privette Door on Independent Contractor’s Bodily Injury Claim
May 06, 2019 —
Brett G. Moore, Michael C. Parme, Lindsey N. Ursua & Lawrence S. Zucker II - Haight Brown & Bonesteel LLPIn Johnson v. The Raytheon Company, Inc., Case No. B281411 (2019) WL 1090217, plaintiff Laurence Johnson (Johnson) was a maintenance engineer employed by an independent contractor that provided control room staff to defendant Raytheon Company, Inc. (“Raytheon”). Johnson was monitoring the computers in the control room when he received low water level alarms pertaining to the water cooling towers. Johnson went to the cooling tower wall in order to look over the wall and verify the water level. Johnson saw the upper half of an extension ladder leaning against the cooling tower’s wall. The ladder had a warning sign which said, “CAUTION” and “THIS LADDER SECTION IS NOT DESIGNED FOR SEPARATE USE.” Despite these warnings, Johnson used the ladder. As he was climbing the ladder it slid out causing him to fall and suffer injuries.
Johnson sued Raytheon, the hirer of the independent contractor, arguing the ladder, among other things, was unsafe and lead to Johnson’s injuries. Johnson believed that Raytheon’s course of conduct of leaving a platform ladder (as opposed to the extension ladder) at the wall constituted an implied agreement to always have one present, on which the independent contractor’s employees relied. Johnson further argued that Raytheon was negligent in providing a dangerous extension ladder, as opposed to a platform ladder, at the wall on the night of the accident.
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
Brett G. Moore,
Michael C. Parme,
Lindsey N. Ursua and
Lawrence S. Zucker II
Mr. Moore may be contacted at bmoore@hbblaw.com
Mr. Parme may be contacted at mparme@hbblaw.com
Ms. Lindsey may be contacted at lursua@hbblaw.com
Mr. Lawrence may be contacted at lzucker@hbblaw.com
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Government Claims Act Does Not Apply to Actions Solely Seeking Declaratory Relief and Not Monetary Relief
March 25, 2024 —
Garret Murai - California Construction Law BlogPerhaps it should come as no surprise, but public entities get special treatment under the law, and when filing a claim against a public entity, in most cases, a claimant is required to file a claim with the public entity before filing suit under the Government Claims Act (Gov. Code §810 et seq.).
But, as the next case demonstrates, that’s not always the case. In Stronghold Engineering Incorporated v. City of Monterey, 96 Cal.App.5th 1203 (2023), the 6th District Court of Appeals examined whether a public works contractor that alleged an extended overhead claim was required to file a Government Claims Act claim before filing suit when its initial complaint was limited to a claim for declaratory relief.
The Stronghold Case
In December 2015, general contractor Stronghold Engineering Incorporated entered into a construction contract with the City of Monterey for the renovation of the City’s conference center and an adjacent city-owned plaza. The construction contract provided that any modification to the construction contract had to be approved by the City through a written change order. No surprise there.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Another Defect Found on the Bay Bridge: Water Leakage
February 11, 2014 —
Beverley BevenFlorez-CDJ STAFFAccording to the San Francisco Chronicle, the eastern span of the Bay Bridge has dealt with alleged “defective welds” and “cracked steel rods,” and now there are reports of leakage. The Chronicle stated that rainwater “is dripping into the steel structure beneath the road deck on the suspension stretch of the span, which,” according to Caltrans “is supposed to be watertight.”
Water corrosion on a bridge could cost $6.4 billion, the San Francisco Chronicle claimed. Caltrans said that they “are going to have teams of engineers and inspectors there this weekend to assess the problem.”
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