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CONSTRUCTION CLAIMS BUILDING BETTER OUTCOMES FALL 2022 ISSUE 3 • VOLUME 7 A NEW GENERATION FOR A NEW NORMAL FORTIFYING AGAINST THE APOCALYPSE IS TODAY’S CONSTRUCTION CLAIMS AND LITIGATION ENVIRONMENT TRENDING BETTER OR WORSE? CLM’S CONSTRUCTION PROFESSIONALS WEIGH IN According to you800.729.0355 mcconsultants.com One Company For All Your Consulting Needs GENERAL LIABILITY & CONSTRUCTION FORENSICS ONE FOR ALL Construction Defect Forensics Construction Related Forensic Expert Consulting Services Pre-Suit Claims Engineering Analysis, Construction Claims, General Liability Claims Accident Reconstruction Commercial Vehicles, Bicycle / Motorcycles Multi-Vehicle Collisions, Driver Factors Cause & Origin Investigations Investigate Claims, Evaluate Damages, Repair Specifications, Reconstruction Oversight Premises Liability Trip / Slip / Fall Coefficient of Friction Analysis Aerial Drone Investigations High Resolution Aerial Photography and Videography MC Virtual-360 ™ 3D Photography 360 Camera / 3D Scanning, Deviation Analysis of Losses, Room or Entire Structure Animation Services Animation Trial Exhibits and Litigation Support VideosFALL 2022 | 3 THE BONES FALL 2022 10 ON THE COVER ACCORDING TO YOU Is Today’s Construction Claims and Litigation Environment Trending Better or Worse? CLM’s Construction Professionals Weigh In 22 A NEW GENERATION FOR A NEW NORMAL Managing Construction Claims Risk in the Age of Gen Z and the Great Resignation 26 SIDE EFFECTS As We Move Past the Pandemic, Longer-Lasting Impacts on Litigated Claims Procedures Emerge 30 FORTIFYING AGAINST THE APOCALYPSE Thinking Seriously About Building Codes Today Prepares Us for the Apocalyptic Events of Tomorrow 14 Arizona Revisiting Foreseeability 16 Colorado The Exception Cannot Swallow the Exclusion 18 Missouri Dotting the I’s 20 New York Triple Play 4 Inside Counsel Change 6 Ask the Expert Inflation: A Rising Concern 8 Survey This Battery Powered 34 Back to School FEATURES STATE-BY-STATEDEPARTMENTS4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine INSIDE COUNSEL CHANGE There is little doubt that we are in a time of change. It is as true for construction claims and litigation professionals as it is for the country—and the world—as a whole. The signs of change are all around us. During the pandemic, it seemed some aspect of our normal lives was being turned upside down every day. Next, it was the “Great Resignation,” and the massive shift in the attitudes and preferences of the workforce. And, speaking of workforce changes, we are in the midst of a new generation of workers stepping into roles with an entirely new set of expecta- tions and preferences. It is easy to point out the changes that are happening; it is more difficult to determine what those changes mean for society and—more relevant to this audience—the future of construction claims, litigation, and risk. In this issue, we look to answer, or at least explore, those difficult questions. In our cover feature, “According to You” (pg. 10), we turn to you, our audience of industry professionals, to quantify the changes of the past year and to weigh in on whether these changes are creating a friendlier or more adverse construction claims environment. In “Fortifying Against the Apocalypse” (pg. 30) we discuss the changing and worsening weather patterns and what can be done to better protect structures against more frequent and destructive natural disasters. Our feature “Side Ef- fects” (pg. 26) looks at the post-COVID-19 litigation landscape and how professionals should navigate new technology, new schedules, and new attitudes. And, in “A New Generation for a New Normal” (pg. 22), we examine the emergence of Generation Z in the construction workforce, as well as the impact of their predecessors, the millennials, stepping into more senior roles. We’re Here, Are You? This issue of Construction Claims will find its way to San Diego for CLM’s 2022 Construction Conference. Normally, we would preview some of the conference sessions in the features and columns of these pages. This year, though, we are proud to launch our first-ever Construction Conference show daily. If you are here with us in San Diego, be sure to stop and say hello, and keep an eye out for the show daily to get a taste of what’s to come in this year’s conference presentations and premier ses- sions. If you were unable to attend the Construction Conference this year, we hope to see you at next year’s conference—there really is no better place to network with peers and gain key insights into the world of construction claims and litigation! K PHIL GUSMAN Editor Phil.Gusman@theCLM.org FALL 2022 ISSUE 3 • VOLUME 7 Construction Claims is published four times a year and covers all aspects of construction-related claims, including construction defect, site accidents/injuries, insurance coverage, subcontractor issues, and new technologies that address both national and regional/ statewide audiences. Copyright© 2022 by the Claims and Litigation Management (CLM) Alliance. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the Claims and Litigation Management (CLM) Alliance. The views expressed in the articles are solely those of the authors and do not necessarily reflect the views or opinions of the Claims and Litigation Management (CLM) Alliance or the companies in which the authors are employed. ADVERTISING Jeremy Campbell jeremy.campbell@TheCLM.org 513-377-7228 EDITORIAL SUBMISSIONS & QUESTIONS Phil Gusman at phil.gusman@TheCLM.org REPRINTS For reprints and licensing please contact Jeremy Campbell at jeremy.campbell@TheCLM.org or 513-377-7228. CHIEF EXECUTIVE OFFICER Ronna Ruppelt VP PARTNERSHIPS Jeremy Campbell SENIOR SALES REPRESENTATIVE Bryan Pifer ACCOUNT EXECUTIVE Megan Josd SENIOR MANAGING EDITOR Phil Gusman VP OF CONTENT Eric Gilkey ART DIRECTOR/ PUBLISHING OPERATIONS MANAGER Jason T. Williamsrimkus.com• 800.580.3228 World-class. Global reach. WHEN THE UNEXPECTED HAPPENS, YOU NEED TO KNOW YOU HAVE QUESTIONS. WE PROVIDE ANSWERS. Numerous factors can lead to serious construction-site accidents, from inadequate worker training and safety procedures to faulty products and heavy equipment. Rimkus has decades of forensic experience investigating and evaluating injury accidents across the U.S. and in many foreign countries. Our construction experts and engineers conduct in-depth investigations to verify critical issues and can provide strategic solutions for recovery. If you’re facing a complex forensic challenge of any kind, count on us to uncover the facts.6 | CONSTRUCTION CLAIMS TheCLM.org/Magazine ASK THE EXPERT QUESTION: How has inflation impacted the construction industry? A: Today’s inflationary environment has made construction projects significantly more expen- sive. We have seen project cost estimates rise to levels not seen in over 40 years. The rising costs of raw materials, labor, fuel, and utilities— coupled with a rise in interest rates—are putting pressure on already tight margins as project owners grapple with starting new projects and contractors focus on executing profitably. Q: What has this meant for the construction claims landscape? A: One way some project owners deal with executing profitability in a high inflationary environment is to cut costs. Any cost and safety-measure cutbacks inevitably increase the risk of construction site bodily injury and construction-defect claims. Increasingly, leading owners and contrac- tors are engaging with insurers to proactively manage, assess, and close claims. Additionally, the importance of loss control to assess safety and claims prevention remains paramount, as does the interpretation of data and claims his- tory to help predict and prevent future claims. The real issue is, how do owners and contrac- tors manage higher project costs without compromising safety? Q: How are the construction and insurance industries adjusting to mitigate the risks? A: Insurers have traditionally considered infla- tion and the potential for cost increases in the construction project underwriting process. What is different now is the sheer magnitude and speed of these cost escalations, especially for key material inputs such as steel and lum- ber. As a result, total insured project values are increasing substantially and project stakehold- ers are having to purchase higher limits across all lines of insurance coverage, including builders risk, single project policies, surety bonds, and general liability. As limits increase, contractors are seeking alternative insurance program structures, including higher self- insured retentions and the use of captives. To address cost escalations and ensure a safe worksite, leading contractors are strategically using data and construction technology—in- cluding wearables, water intrusion sensors, and offsite modular construction—to bet on themselves and make smart risk decisions. Another important consideration in managing escalating construction costs is properly assessing and estimating supply chain strategies. This is critical to managing both construction costs and construction schedules. It also is essential that open communica- tion exists between insurers, owners, general contractors, and subcontractors about the potential cost escalation challenges and how to equitably manage them. K INFLATION: A RISING CONCERN Rob McDonough U.S. Construction Practice Leader Marsh 505 E. Fayette Street, Suite 214 Syracuse, New York 13202 Call MSA Advocates for more information at 315-472-7965 or E-mail us at www.msaadvocates@msaadvocates.com www.msaadvocates.com Medicare Set Aside Services Protecting Your intereStS MSA Advocates, Inc. is a national vendor assisting the insurance industry and legal community with compliance, for insurance settlements, as defined by the Medicare Secondary Payer Statute (MSP) and Mandatory Reporting under Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) and CMS/Medicare Memo Rulings. MSA Advocates, Inc. also provides expertise in the area of structured Medicare Set Asides which provide cost savings to all parties, while still protecting CMS/Medicare’s interests as defined by CMS/Medicare Memo Rulings. MSA Advocates, Inc. has been providing Medicare Set Asides, Structured Medicare Set Asides, Medicare lien resolution services, and other services that meet CMS/ Medicare’s compliance requirements, since 2002. Knowledge iS our Strength Our Staff is knowledgeable with expertise in the areas of Workers’ Compensation claims, Liability claims, Social Security Claims Management, and Medical Case Management. Our clients can be assured that a team of qualified professionals are working on their behalf. Fee Schedule MSA Advocates, Inc.’s fee schedule is one of the lowest in the industry for services provided.8 | CONSTRUCTION CLAIMS TheCLM.org/Magazine SURVEY THIS BATTERY POWERED Ford Motor Company and SK Innovation’s planned “Blue Oval City” will be a mega campus in Stanton, Tennessee that will produce Ford’s electric F-Series trucks and batteries. Work on the campus was partly responsible for a 79% increase in non-residential building starts for July, to a seasonally adjusted annual rate of $530.5 billion, according to Dodge Data & Analytics. Residential building starts, meanwhile, fell 8% in July. IMAGE SOURCE: FORDNext >