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< Previous10 | CONSTRUCTION CLAIMS TheCLM.org/Magazine U.S. has some domestic production, the aluminum smelting industry is relatively small, with total smelter capacity being just 1.73% of the global total. Copper is the third-most-consumed metal, behind iron and aluminum. The U.S. imports nearly half of the copper it uses, with most of it coming from Chile, followed by Canada and Mexico. Tariff cost impact will most certainly put pressure on project budgets, many of which are already challenged by the sig- nificant period of escalation experienced post-pandemic. The Clear Risks Associated with Tariffs and Labor Issues Reliance on imports is significant for the construction industry, as these materials are essential for building and infrastruc- ture projects. In the Aug. 1 edition of Construc- tion Dive , Fluor’s CEO Jim Breuer states, “Over the past couple of months, we’ve seen more clients continue to take a wait-and-see approach due to a variety of reasons, including ongoing trade policy discussions and developments, cost escalation, and interest rates…in a few cases, we’ve seen project cancella- tions or extended deferments.” As noted in that comment, material cost escalation is not the only downside effect of tariffs: Tariff-driven volatility is delaying or sidelining projects and shrinking overall backlog across the industry. In the July 9 edition of Con- struction Dive, author Sebastian Obando shares that nearly a quarter of builders reported tariff-related project cancella- tions in May, requiring some contractors to reduce their workforce as they adjusted operations in response to material costs and uncertain project timelines. Despite recent layoffs due to side- lined projects, the shortage of skilled workers persists. One key area of labor shortage is for electricians, who are needed to support a significant increase in projects for data centers and manu- facturing. According to the Associated General Contractors of America (AGC), the year-over-year percentage change in spending for data centers increased by 69% from May 2023 to May 2024, while the nearest sector, manufacturing, saw an increase of 20%. This shortage of elec- tricians is expected to potentially worsen due to restrictive immigration policies, which limit the number of workers entering electrical training and appren- ticeship programs. It is estimated that as many as one in five undocumented immigrants work in construction. Addressing the Risks Contractors and their insurance provid- ers should start addressing these risks now—in the unlikely event they have not already—because waiting could be costly. In fact, large general contractors (GCs) have been dealing with price escalation since the pandemic, and have learned from those uncertain times the value of pre-planning and continuous planning throughout the execution of the project. The pandemic made many GCs realize the industry was evolving daily, and noth- ing was to be treated as “routine”. According to the Q2 2025 Gordian “Construction Cost Insights Report,” while material prices remained mostly stable in Q2, the construction industry is prepar- ing for potential ripple effects from newly announced tariffs. Preconstruction teams are already modeling cost scenarios and ad- Untangling the Uncertain Landscape APPROXIMATELY HALF OF ALL ALUMINUM USED IN THE U.S. IS IMPORTED, WITH CANADA AGAIN BEING THE TOP SOURCE, FOLLOWED BY MEXICO AND OTHER ALLIES LIKE JAPAN AND SOUTH KOREA.FALL 2025 | 11 justing procurement timelines. The report quotes Andrew Ahrendt of PCL Construc- tion as stating, “Companies are proactively adjusting procurement strategies and selec- tively stockpiling materials in preparation for anticipated tariff-driven price hikes.” This is precisely what two Top ENR 400 panelists at a recent construction conference suggested as well. Part of their strategy was to pay for materials like steel and aluminum in advance of, even years before, breaking ground, getting the owner to pay upfront to avoid the likelihood of significant cost escalation. This approach has implications for insurance, as stor- age sites are often not covered by existing builders risk or inland marine policies, so it is imperative to keep this in mind. GCs are increasingly evaluating the risks associated with larger projects in response to the evolving tariff economy. Consequently, GCs are demonstrating a greater willingness to engage in both smaller and shorter-duration projects to reduce their exposure to material escala- tion and labor shortage. To mitigate the labor shortage risk, GCs are reevaluating their approach to addressing this issue. With skilled labor, it is not simply a matter of throwing man- power at the problem, but rather an issue of retaining qualified workers on current projects and gaining their favor for future projects. According to the 2024 AGC “Workforce Survey Analysis,” GCs have 1) increased hourly wage rates across the board for all skilled labor positions, and 2) heavily invested in training, both on-site and third-party training, to increase the number of skilled workers at their disposal. Using Past Experience to Predict the Future Subcontractor default insurance (SDI) is a highly specialized product that provides coverage to GCs for costs caused by the default of one of their subcontractors. These claims are typically the first type GCs would see on a project. Data from these claims often provides guidance and foresight into other types of claims as well, including, but not limited to, builders risk, contractor’s professional, and ultimately construction-defect claims. Information gleaned from various carriers and brokers indicates a 40% to 60% increase in SDI claim frequency during periods of extreme cost escala- tion. Similarly, there are indications of a smaller but still significant percentage increase in the average SDI claim sever- ity, primarily due to higher replacement costs and delay impacts. It is reasonable to suggest, from our collective experience, that impacts from material cost escalation on SDI claims include higher default risks for subcontractors (due to thinner margins) and more financial distress, larger claim amounts due to higher replacement costs and project delays, and prequalification risks like the financials being evaluated not reflecting current pressures. This data can undoubtedly provide guidance for actuaries to consider IBNR (incurred but not reported), for adjusters to consider case reserves, and for under- writers to consider proper premiums. As we consider suggestions of best practices to help mitigate risks of volatile construction material costs amid an uncertain economic landscape, we see that successful contractors and develop- ers are proactively managing these risks through strategic procurement, contract flexibility, and better forecasting tools. Specifics of some best practices include early procurement and storage planning (as discussed previously), es- calation clauses, supplier diversification, use of digital tools, alternative materials, dynamic cost indexing, robust initial and continuous financial prequalification, and a diversified subcontractor pool. Mitigating Future Risks Knowing the likelihood of significant material cost escalation due to tariffs and other contributing factors, it is important for contractors to limit exposure during contract negotiations. Fixed-price contracts are now high- risk instruments. Without strong mate- rial escalation clauses, contractors are vulnerable to shrinking profit margins or even potential contract breaches. By integrating strategic, tariff-savvy clauses into construction contracts, own- ers and contractors can safeguard their projects against market instability and take command of their financial future. A material escalation clause in an owner construction contract can protect against unforeseen price increases in materi- als by allowing for adjustments in the contract price. Some potential approaches include: • Scope of material price adjustments, including a bulleted list of materials that may have potential and/or cur- rent volatility—i.e., structural steel, concrete and cement products, lum- ber and wood products, asphalt and petroleum-based products, or electri- cal and mechanical components. • Threshold for adjustment (a price adjustment shall be granted if the price increase exceeds __%, i.e., 5%) compared to the base price listed in the contract or bid submission, as verified by industry indices or supplier invoices. • Time extension. If material escala- tion leads to procurement delays, the contractor may request a time extension under the contract’s force majeure provisions. As volatility continues in the con- struction market, uncertainty remains elevated, construction spending has slipped, and material prices are starting to rise, according to Construction Execu- tive’s July 27 edition. Even so, industry optimism persists. Anticipated interest rate cuts later in 2025 may offer relief. In the meantime, strategic planning, flexible contracts, and robust forecasting tools remain essential for navigating the chal- lenges ahead. K Chris Heider is a risk engineer at Optio Group. chris.heider@optiogroup.com Robby Wells is an associate director at Proactive. rwells@buildwithproactive.com Untangling the Uncertain Landscape12 | CONSTRUCTION CLAIMS TheCLM.org/Magazine On June 5, the Tennessee Court of Appeals issued an opinion involving a unique shipping container apartment project in Nashville, Ten- nessee. The case, 83 Freight LLC v. C4 Sourcing Solutions LLC et al., involved a dispute over payment for prefabricated shipping containers used to build an apartment complex in Nash- ville. While the project was innovative, the decision highlights the calculation of damages and common risks in construction agreements, especially with non-traditional materials or supply chains. The Project 83 Freight, a developer, hired Capital City Con- struction to build an apartment complex made from steel shipping containers. Capital City, in turn, subcontracted C4 Sourcing Solutions to sup- ply 171 custom containers. The Dispute C4 delivered 63 containers, but only got paid for 54. C4 then filed a lien on the property and later sued for breach of contract and violation of Tennessee’s Prompt Pay Act. After a jury trial, C4 was awarded: • $866,991 in damages. • Attorneys’ fees. • Prejudgment interest. The total award was over $1.3 million. But the appeals court reversed part of that award. Damages Were Overstated The appellate court found that only $301,309 of the $866,991 verdict was supported by the testi- mony and accompanying exhibits, and reduced the verdict accordingly. In reaching this conclu- sion, that court discussed how permissible dam- ages for breach of contract included expectation damages and consequential damages. The court reviewed the law on expectation damages: “Award the injured party the profits it would have made had the contract been completed.” The court also stated the law on consequential damages as those damages that “are the normal and foreseeable re- sults of a breach of contract.” The court confirmed its authority on appeal to suggest or require a re- duction of damages awarded at trial based on a re- view of the trial record and determining whether the verdict was supported by material evidence. In this case, the $866,991 verdict could not be sup- ported by the material evidence presented at trial. Claims for payment must be clearly documented and proven with precision. Prompt Pay Act Claims Survived—and Triggered Fees The jury found that Capital City acted in bad faith by not paying for containers it accepted. It was un- State-By-State TENNESSEE CONTAINING THE COST Court of Appeals Reduces $1.3 Million Verdict in Construction Dispute Over Shipping Container Apartments By Jason M. Pannu Jason M. PannuFALL 2025 | 13 disputed in this case that Capital City with- held payment for nine shipping containers that were delivered and installed into the 83 Freight project. Although Capital City and 83 Freight contended that payment was withheld in good faith, the appellate court held it was up to the jury to decide that fact. The finding of bad faith allowed C4 to collect attorneys’ fees and other relief under the Prompt Pay Act. Delays in paying subcontractors, especially when goods are delivered and used, can lead to enhanced financial exposure, including le- gal fees and statutory interest. The presence of bad faith is a question of fact. Lien Enforcement Was Upheld— Despite Technical Flaws C4’s lien claim was not filed under oath, and the legal description was arguably incomplete, but the court allowed the lien to stand because it substantially complied with Tennessee’s lien statutes and did not have “nonprejudicial errors or omissions.” The court did not permit Capital City and 83 Freight to use tech- nicalities to invalidate C4’s lien because they were unable to show prejudice. Bonding Off a Lien Does Not Preserve All Defenses 83 Freight extinguished the lien by post- ing a bond through SureTec Insurance. But by doing so they waived challenges to the lien’s validity, extent, and amount— even though the bond included language attempting to preserve those defenses. When bonding off a lien, understand what rights you are giving up with respect to challenging the validity of the lien. There were numerous other interest- ing issues raised on appeal that the ap- pellate court declined to address because it found those issues were waived as the appellant did not fully develop the argu- ments in their brief. K Jason Pannu is a partner with Freeman Mathis & Gary LLP. jason.pannu@fmglaw.com State-By-State TENNESSEE The appellate court found that only $301,309 of the $866,991 verdict was supported by the testimony and accompanying exhibits, and reduced the verdict accordingly. JOIN US FOR A DYNAMIC AND ENGAGING LINEUP OF WEBINARS, DESIGNED TO KEEP YOU AT THE FOREFRONT OF ALL THINGS CLAIMS RESOLUTION AND LITIGATION MANAGEMENT. BEST OF ALL, ATTENDANCE IS FREE AND OPEN TO ALL – MANY OFFER CE/CLE AS A BENEFIT OF CLM MEMBERSHIP. YOUR GATEWAY TO INDUSTRY INSIGHTS: ATTEND OUR WEBINARS THECLM.ORG/WEBINARS14 | CONSTRUCTION CLAIMS TheCLM.org/Magazine The decision in Broughton v. Marcy Ave. Own- ers LLC, 238 A.D.3d 536 (1st Dept. 2025) offers a critical reminder to defense counsel that the seemingly ironclad protections of New York La- bor Law §240(1) are not insurmountable. While the statute imposes absolute liability in many elevation-related construction accident cases, Broughton demonstrates how detailed factual re- buttals, especially those grounded in sound expert analysis, can raise triable issue of facts sufficient to defeat summary judgment. The Claim: A Fall Through a Roof The plaintiff, Tyrell Broughton, worked as a demolition laborer and alleged he fell approxi- mately 20 feet through an unsecured opening on a roof while carrying material during a building demolition project. According to deposition tes- timony from both Broughton and a co-worker, the hole was covered by a metal sheet that gave way beneath him, causing him to plummet to the floor below. On the surface, this narrative seems tailored perfectly to §240(1)’s framework. The “Scaf- fold Law” imposes strict liability on owners and contractors when a worker is injured due to the absence or inadequacy of safety devices required for elevation-related work. Courts have consis- tently ruled that a fall through an unguarded or improperly secured hole in a roof or floor is a textbook example of a §240(1) violation. [See Guaraca v West 25th St. Hous. Dev. Fund Corp., State-By-State NEW YORK IRONCLAD NO MORE? Recent Decision Shows How to Challenge Labor Law Narrative By Tracy J. Abatemarco and D. Bradford Sessa Tracy J. Abatemarco D. Bradford Sessa FALL 2025 | 15 226 AD3d 568, 568 (1st Dept 2024); Cashbamba v 1056 Bedford LLC, 168 AD3d 638, 639 (1st Dept 2019)]. Relying on this precedent, Brough- ton moved for summary judgment. His motion included both his own testimony and that of his coworker, which, taken at face value, supported the conclusion that safety devices were absent or insufficient and that his fall was the direct result. The Defense: Medical Records and Biomechanics Tell a Different Story Rather than default to a liability appor- tionment or seek settlement, defendants Cascade 553, LLC; Empire ID Con- struction; and Blur Rock Contracting, Inc. mounted a strategic counterof- fensive. Their approach exemplifies how experienced defense counsel can transform a case seemingly destined for a plaintiff’s victory into one mired in factual dispute. The defendants submitted expert reports and affidavits from two key professionals: a biomechanical expert and a board-certified neurosurgeon who conducted an independent medi- cal examination (IME) of the plaintiff. Their findings undermined the very foundation of plaintiff’s version of events. The biomechanical expert determined that a 20-foot fall would, according to the laws of physics and based on existing medical literature, typically result in significant injuries, particularly fractures or observ- able trauma to weight-bearing joints and the spine. Yet Broughton’s only documented injury on the date of the accident was a minor elbow abrasion. The neurosurgeon’s IME revealed what the report described as “nonphysi- ologic findings” and “symptom magni- fication.” The doctor noted the absence of acute trauma in the plaintiff’s cervical and lumbar spine despite Broughton’s claim that he either landed on his feet or face (the story changed). Both scenarios would cause significant injuries from that height. Both experts concluded that the described fall and resulting injury was medically implausible. The Result: Summary Judgment Denied The Appellate Division affirmed the lower court’s denial of summary judgment for the plaintiff. Although the court acknowledged that plaintiff successfully established a prima facie case under §240(1), it also found that defendants had raised a triable issue of fact as to whether the accident occurred in the manner alleged. This is a significant result for defense attorneys litigating under New York’s no- toriously plaintiff-friendly Labor Law. The ruling reaffirms that when defendants offer credible, fact-based challenges to the plaintiff’s version of events, particularly through expert testimony, a case may be successfully disputed before reaching the liability phase of trial. Notably, the court drew a clear distinction between the viable expert testimony and other unsubstantiated attacks on the plaintiff’s credibility. For example, defendants’ reference to Broughton’s criminal history was deemed irrelevant. Similarly, the court rejected the notion that unproven al- legations of fraud in unrelated RICO actions could, without more, under- mine plaintiff’s claim. These aspects of the opinion serve as a caution to defense counsel: Arguments based on specula- tion or unrelated past conduct can dilute stronger, science-based challenges. Key Takeaways Broughton underscores several key defense strategies that can be helpful in §240(1) litigation: • Utilize experts. The case highlights the value of obtaining early expert review, particularly in high-exposure construction injury cases where plaintiff’s claims appear exaggerated. By challenging the mechanics of the accident and the plausibility of injury, the defense forced the court to con- front a narrative that didn’t align with medical reality. • Avoid overreaching. While the defendants succeeded with their medical evidence, their attempts to discredit the plaintiff based on criminal history and third-party allegations were unsuccessful. De- fense counsel must be surgical in argumentation. Courts are more receptive to empirical evidence than to character attacks or innuendo. • Reframe the narrative. Broughton shows that defendants do not have to accept the factual assumptions underlying the §240(1) claim. A cred- ible challenge to whether the accident occurred at all, or in the way it was described, can shift the case from strict liability territory into a simple factual dispute. The court’s decision in Broughton will not halt the tide of Labor Law §240(1) claims, but it arms defense counsel with a powerful roadmap. Credibility disputes rooted in science can successfully break through the otherwise strict language of the statute. In an environment where plaintiff victories often seem a forgone conclu- sion, Broughton offers a rare and timely reminder that the facts still matter. K Tracy J. Abatemarco, co-managing partner, New York office; and D. Bradford Sessa, senior counsel, are with Wood Smith Henning & Berman. tabatemarco@ wshblaw.com; dbsessa@wshblaw.com State-By-State NEW YORK Rather than default to a liability apportionment or seek settlement, defendants…mounted a strategic counteroffensive.16 | CONSTRUCTION CLAIMS TheCLM.org/Magazine In 2003, the Florida Legislature enacted Chap- ter 558 Florida Statutes, with the stated goal of “hav[ing] an alternative method to resolve con- struction disputes that would reduce the need for litigation as well as protect the rights of property owners.” (See Ch. 2003-49, Laws of Fla.). This pre-suit process requires property owners to serve written notice of a claim on contractors, subcon- tractors, suppliers, or design professionals. Property owners have a light burden. All the statute requires is: • Specific reference to chapter 558. • Description of the claim in reasonable detail sufficient to determine the general nature of each alleged construction defect and a description of the damage or loss resulting from the defect. When an association serves its notice of claim on a contractor, the association will often go beyond what the statute requires and attach to its notice of claim a report authored by a team of consultants. The recipient of the Chapter 558 notice of claim is entitled to conduct an inspection and must serve a written response to the claimant. After various inspections, the contractor is seemingly aware of alleged defects and has the chance to meaningfully consider its response. Where a con- tractor disputes the claim and declines to remedy the alleged defect or engage in settlement, litigation often follows. When these Florida construction-defect disputes evolve into litigation, there is often a significant disconnect between the allegations contained in Chapter 558 notices and the claims ultimately pursued in litigation. This proce- dural mismatch can leave defendants facing an expanded scope of alleged defects, new expert opinions, and compressed timelines to respond. This article examines the causes of this imbal- ance and proposes practical and policy-based State-By-State FLORIDA STUCK BETWEEN CONCRETE AND REBAR How Pre-Suit Under-Disclosure in Construction-Defect Cases Prejudices Contractors By Andrea C. Faverio Andrea C. FaverioFALL 2025 | 17 measures to restore fairness and ef- ficiency to the process. There are three scenarios that contrac- tors often face: • Lack of written 558 notice. • A narrow 558 notice that later ex- pands the universe of defects through expert disclosures. • Claims that appear minor during the 558 notice process but later grow exponentially. The first scenario is easy enough for practitioners and courts to deal with. The pre-suit process is a requirement, not an option. Should a claimant completely avoid the process and file suit, a contractor can move for a stay of the litigation until the claimant complies with the pre-suit notice. The second and third scenarios are where things get trickier. Consider the following hypothetical: A contractor receives a notice of claim that identifies issues with the plumbing system of a large, high-rise condominium complex. In the report, the claimant’s profes- sional engineers identified 15 of 85 units experiencing this issue. Six months into litigation, the claimant-turned-plaintiff has disclosed its experts and served its re- ports. Now, the issue exists in all 85 units. During the pre-suit phase, the contractor only inspected the 15 units where the plumbing defect allegedly existed. Now, the contractor-turned-defendant and its expert team need to inspect 70 more units. Perhaps the plaintiff is agreeable to an additional inspection but does not agree to extend the contractor’s deadline to serve its rebuttal reports, which are often only 30 days. Experienced prac- titioners will negotiate for more time at the outset, foreseeing this recurring issue. The contractor-defendant now finds itself before the court asking for an extension of time that may necessitate a continuance. This recurring challenge for contrac- tor-defendants in construction-defect litigation may stem from the frequent change in expert teams between the pre- suit and litigation phases. Plaintiffs often engage one consultant team to prepare the initial defect reports. Once litigation begins, however, plaintiffs may retain entirely new experts. These litigation experts may reframe the scope of alleged defects, expand the number of issues in dispute, or even contradict aspects of the original claim. While this change in expert perspective can dramatically alter the nature of the case, it often occurs after the defendant has already shaped its early strategy and budget based on the nar- rower pre-suit disclosures. The problem is compounded by judi- cial reluctance to grant stays or continu- ances, even when newly disclosed claims and opinions significantly expand the scope of the dispute. Judges face institu- tional pressure to move cases forward effi- ciently. This dynamic places defendants in the difficult position of having to respond quickly to substantially new allegations without the benefit of adequate time to investigate, retain rebuttal experts, and prepare a comprehensive defense. Defendants face an additional dis- advantage in cases assigned to Florida’s Complex Business Litigation (CBL) divi- sions. These courts, which often handle large-scale construction-defect mat- ters, are exempt from Florida’s recently implemented discovery rules requiring early disclosures of damages calculations, expert opinions, and related documents. In practice, this means that defendants in CBL courts may not receive critical information, such as the methodology underlying a plaintiff’s damages claim or the technical basis for an expert’s opinions, until well into the litigation, and sometimes after key strategic deci- sions have been made. Defendants are effectively disarmed in the initial stages of the case and forced to prepare for mediation, settlement evaluation, or even trial without the full evidentiary picture. When combined with the shifting expert landscape and limited judicial willingness to adjust schedules, the result is a proce- dural imbalance that can undermine both fairness and efficiency in the resolution of construction-defect disputes. Defense counsel must take an active role in pushing back against the proce- dural imbalance created when claims balloon beyond the scope of the notices. One effective tactic is to move to sever such claims or trial phases, discourag- ing plaintiffs from leveraging late-stage expansions. Counsel should also press for case management orders that limit the litigation’s scope to the issues disclosed in the 558 process. Courts, too, have a role in restoring balance. Judges should scrutinize Chapter 558 compliance closely during initial case management conferences and be willing to grant discretionary stays when new allegations exceed pre-suit disclosures, or sever the new or expanded items from the current trial schedule. The legislature can and should close procedural loopholes. Chapter 558 should require identification of all expert teams at the pre-suit stage, mandate inclusion of basic damage categories and cost estimates, and provide clear enforcement mechanisms for noncompliance. Without these changes, defendants will remain disadvantaged, facing expanded claims without the time or information neces- sary to respond effectively. K Andrea C. Faverio is an associate at Cole Scott & Kissane. andrea.faverio@csklegal.com State-By-State FLORIDA The problem is compounded by judicial reluctance to grant stays or continuances, even when newly disclosed claims and opinions significantly expand the scope of the dispute.18 | CONSTRUCTION CLAIMS TheCLM.org/Magazine Editor’s note: This article highlights the first Pre- mier Session at CLM’s 2025 Construction Confer- ence and is authored by the presenters. Conference attendees can see this session on Wednesday, Sept. 17 at 4:30pm. For those unable to make it to San Diego this year, consider attending the 2026 Con- struction Conference to take in more great presenta- tions like this one. Artificial intelligence (AI) is no longer a distant concept or a science fiction movie; it has become an integral tool in how we think, work, and lead. It has also become a bit of a buzzword. Our Pre- mier Session at the 2025 CLM Construction Con- ference, “Human vs. Machine: Live AI Showdown in Construction-Defect Claim Review,” explores how AI is reshaping professional thinking, from decision-making and communication to creativ- ity and problem-solving, through the lens of a construction-defect claim review. Our panel is flipping the script and bringing artificial intel- ligence into the spotlight; no longer theory, but a hands-on, game-changer approach tailored for professionals like all of us. What’s This Session All About? Let’s face it, AI used to sound like something out of a sci-fi movie. But not anymore. Nowadays, it is a practical tool that can completely change the way we investigate, evaluate, and resolve construc- tion-defect claims. In this session, we will walk through a real-time, head-to-head “Human vs. Machine” review of a construction-defect claim so you can see exactly how AI fits into our world— PREMIER SESSION PREVIEW AI IN CONSTRUCTION CLAIMS Let’s Talk About What Really Matters By Terence Kadlec, Michael Hinojosa, Steve Lokus, and Rose Hall Michael Hinojosa Rose Hall Terence Kadlec Steve Lokus CONFERENCE CONSTRUCTIONFALL 2025 | 19 not as some mysterious black box, but as a partner to help you get the job done better and faster. We’ll answer the big questions: What is AI, really? How easy is it to use in your daily workflow? And why should you care about integrating it into the claims process? This is your chance to see AI in action, learn how to boost your produc- tivity, and hear how to keep your data, work product, and ethical standards protected every step of the way. Whether you are just curious, a bit skeptical, or already tinkering with AI, you will walk away with tools, confidence, and practical know-how to make AI work for you. Artificial Intelligence: Down to Earth, Up to Speed When people talk about AI, there is still a lot of confusion out there. But here is the real deal: In the construction claims space, AI is just a set of smart tools that help you spot patterns, process moun- tains of information, and make faster, better decisions. Think about it: We are constantly dealing with massive piles of reports, timelines, and technical jargon. AI helps us cut through the noise and focus on what matters most. These days, there are so many flavors of AI: generative AI that drafts corre- spondence or simulates case arguments, predictive models that flag risks or spot anomalies, and automation that takes care of repetitive tasks. You are already using AI-driven tools on your iPhone, on Netflix, and with business essentials like Microsoft Copilot, ChatGPT, and legal software handling e-discovery or case law research. As these tools get woven right into the platforms we already use, AI becomes less intimidating and a lot more useful. How Easy Is AI, Really? Here is the good news: You do not need to be a data scientist or programmer to make AI work for you. With natural language interfaces, you can just ask for what you need in plain English: “Sum- marize a deposition.” “Draft a claims status letter.” “Review a technical clause.” And with need-specific prompts, we can do so much more. With just a few clicks of the mouse. AI is right there in Micro- soft 365, in claims management, and in legal research tools—no extra learning curve required. Think of AI as your intelligent co-pilot or assistant. It helps you handle the routine stuff with ease so you can focus your expertise on where it really counts, such as strategic thinking, analysis, and making those key decisions, smarter and faster, that can change the outcome of a claim. AI and Construction-Defect Claims: Why It Matters If you have ever been knee-deep in a complex defect claim—hundreds of reports, years of history, a web of parties involved—you know how overwhelming it can get. AI shines here. It sorts through endless documentation, highlights the important bits, and even spots inconsis- tencies that might otherwise go unno- ticed. A review that might have taken weeks can now happen in hours, giving you a leg up in understanding the root cause and getting to resolution faster. AI is not just about speed, either. In a field where every detail counts, it helps en- sure nothing critical falls through the cracks. AI tools can summarize expert reports, cross-check them with building codes, and translate technical engineering language into actionable insights for the whole team—adjusters, attorneys, and beyond. By analyzing past claims, AI has the ability to flag recurring issues, helping you and your clients make more informed underwriting or litigation decisions down the line. Embracing the Future Together Let’s be clear: AI is not here to replace any- one’s expertise. It is not replacing your job, it is augmenting it. AI is about amplifying what you already do best. As expectations rise for quick turnarounds and data-driven solutions, AI can help you deliver—with precision, consistency, and confidence. At this year’s interactive session at the CLM Construction Conference, you will get a front-row seat to see how AI is revolutionizing our industry. Live demon- strations, technical deep-dives, and plenty of practical takeaways are on the agenda. Whether you are just starting to think about AI or are well on your way, you will pick up something new, and walk out ready to tackle construction-defect claims with a powerful new set of tools. We are all in this together as the pro- fession continues to evolve. The oppor- tunities AI brings to construction-defect claims are real, and the challenges are worth tackling head-on. Let’s meet, share, and learn together, because the future of claims handling will be shaped by those who are willing to embrace innovation and lead the way. K Terence Kadlec is senior vice president, technical services, at MC Consultants, Inc. terence.kadlec@mcconsultants.com Michael Hinojosa is president & chief claims officer at National Claim Services LLC. mhinojosa@natlclaim.com Steve Lokus is vice president, casualty construction claims at Sompo International Insurance. slokus@sompo-intl.com Rose Hall is founder/CEO of RH Business Ventures, LLC. rose@rhbusinessventures.com PREMIER SESSION PREVIEW We’ll answer the big questions: What is AI, really? How easy is it to use in your daily workflow? And why should you care about integrating it into the claims process? CONFERENCE CONSTRUCTIONNext >