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CONSTRUCTION CLAIMS BUILDING BETTER OUTCOMES SUMMER 2025 ISSUE 2 • VOLUME 10 OCCURRENCE-PALOOZA NAVIGATING NEXT-DOOR CLAIMS Legacy Challenge and HOW THE INSURANCE AND CONSTRUCTION INDUSTRIES CAN HELP SOLVE THE HOUSING CRISISOne Company For All Your Consulting Needs GL & CD FORENSIC SERVICES Expert Disciplines A-W Architects Biomechanical Engineers Building Envelope Certified Industrial Hygienists (CIH) Civil Engineers Cost of Repair Consultants Delay Claims Consultants Dram Shop & Public Safety Electrical Engineers Environmental Consultants Fire and Explosion Investigators General Contractors Geotechnical Engineers Heavy Equipment Operations Materials Science Engineers Mechanical Engineers Metallurgists NY Labor Law Premises Liability Consultants Premises Security – Police Practices Property Loss Consultants Safety Consultants Safety – OSHA Structural Engineers Transportation/Traffic Engineers Trial Exhibit Animators UAV (Drone) Pilots Waterproofing Consultants CD & GL Forensic Consulting Property Loss Consulting Construction Consulting mcconsultants.com 800.729.0355 35SUMMER 2025 | 3 THE BONES SUMMER 2025 10 ON THE COVER CHALLENGE AND LEGACY How the Insurance and Construction Industries Can Help Solve the Housing Crisis 22 DANGER: CONSTRUCTION SITE Avoiding Liability and Workers’ Compensation Exposure in the Construction Industry 26 OCCURRENCE-PALOOZA Occurrence, Triggers of Occurrence, Number of Occurrences, and Allocation 30 NAVIGATING NEXT-DOOR CLAIMS A Look at the New Normal in Construction Disputes 14 Colorado A Balancing Act 16 Louisiana Positive Signs 18 New York No Easy Lift 20 Massachusetts Stop the Clock 4 Inside Counsel By the Numbers 6 Survey This Bridging the Gap 8 Ask the Expert Leg it Out FEATURES STATE-BY-STATEDEPARTMENTS4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine INSIDE COUNSEL BY THE NUMBERS As the construction industry faces both challenges and opportunities due to evolv- ing economic and political realities, this column aims to share some interesting recent industry facts and figures. In an analysis of government jobs data, the Associated General Contractors of America (AGC) reports that construction sector em- ployment increased by 4,000 jobs in May, with AGC noting that rising wages allowed the industry to add workers more rapidly than other sectors. AGC notes the industry has added jobs each month for over a year, but the increases have slowed amid recent market uncertainty. According to AGC, nonresidential construction firms added 11,300 workers in May, including 4,500 among specialty trade contractors, 3,100 in nonresidential building construction, and 3,700 in heavy and civil engineering construction. Residential construction, meanwhile, saw a decrease of 7,400 jobs, AGC says. Residential specialty trade contractors lost 11,000 posi- tions, offset some by homebuilders and other residential build- ing construction firms adding 3,600 workers. AGC CEO Jeffrey D. Shoaf says in a statement, “Construction firms continue to hire and boost wages, but the pace of growth has slowed as demand for certain types of projects cools. As federal officials provide more certainty about tariffs, taxes, and investment levels, demand for projects is likely to rebound.” Top Construction Companies Meanwhile, Construction Dive recently released its lists of top commercial contractors and top homebuilders of 2025, ranked by 2024 revenue (for commercial contractors) and 2024 closings (for homebuilders). The top-10 commercial contractors are: Turner Construction ($20.2 billion in 2024 revenue), Bechtel ($15.9 billion), Kiewit Corp. ($14 billion), The Whiting-Turner Contracting Corp. ($13.3 billion), MasTec ($12.3 billion), STO Building Group ($12 billion), Fluor ($11.1 billion), DPR Construction ($10.8 billion), McDermott International ($8.9 billion), HITT Contracting ($8.7 billion). Of note, Construction Dive says Bechtel and Kiewit Corp. flipped the number-two and number-three positions compared to 2024, while HITT broke into the top-10 after ranking 26th last year. For homebuilders, the top-10 in 2025 are: D.R. Horton (93,311 closings in 2024), Lennar Corp. (80,210), PulteGroup (31,219), NVR (22,836), Meritage Homes (15,611), SH Residential Hold- ings (14,860), KB Home (14,169), Taylor Morrison (12,896), Century Communities (11,007), Toll Brothers (10,813). Construction Dive notes the order is largely the same as a year ago, but SH Residential Holdings, U.S. subsidiary of Japanese home builder Sekisui House, rose to number six (up from 20 a year ago), which bumped Clayton Properties Group out of the top-10. K PHIL GUSMAN Editor Phil.Gusman@theCLM.org SUMMER 2025 ISSUE 2 • VOLUME 10 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© 2025 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. ART DIRECTOR/ PUBLISHING OPERATIONS MANAGER Jason T. Williams 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. PRESIDENT Susan Wisbey-Smith VP PARTNERSHIPS Jeremy Campbell SENIOR ACCOUNT EXECUTIVE Laurel Metz ACCOUNT EXECUTIVE Megan Josd DIRECTOR OF CONTENT Phil Gusman ASSOCIATE EDITOR Angela Sabarese ASSISTANT EDITOR Fran ClarkDetermining the cause of an accident is no easy feat. It’s a science. Rimkus forensic engineers and consultants have decades of experience reconstructing accidents of all kinds to determine what happened and why. We also provide expert testimony at trial. If you’re facing a complex forensic challenge of any kind, count on us to uncover the facts. YOU HAVE QUESTIONS. WE PROVIDE ANSWERS. WHAT HAPPENED? WITH SO MUCH AT STAKE, YOU NEED TO KNOW rimkus.com800.580.3228Consultants. Experts. Innovators.rimkus.com6 | CONSTRUCTION CLAIMS TheCLM.org/Magazine SURVEY THIS BRIDGING THE GAP A rendering of the new Rourke Bridge. Construction and development firm Skanska announced in June that it has been awarded a $303 million contract to build the new bridge, which will span the Merrimack River in Lowell, Massachusetts. The project will replace the existing bridge, which was constructed in 1983, according to the Massachusetts Department of Transportation. Skanska says the project, expected to be completed by spring 2030, will consist of a seven-span bridge, intersection reconstruction at either side, bicycle and pedestrian accommodations, and other improvements. IMAGE SOURCE: SKANSKA8 | CONSTRUCTION CLAIMS TheCLM.org/Magazine ASK THE EXPERT QUESTION: What kind of impact have the recent developments involving the LEG-3 extension had on builders risk and other construction claims? A: Recent case law related to LEG-3 language has had a major impact on carriers, brokers, and insureds involved in commercial construc- tion insurance. I will start with a bit of history. Nearly 30 years ago the London Engineering Group (LEG), a consultative body for insurers of engi- neering class risks, introduced a series of defects exclusions (also referred to as extensions). LEG-1, LEG-2, or LEG-3 attach to builders risk (BR) policies. Each provides increasing levels of coverage, with LEG-3 being the broadest. While initially available through London markets, these endorsements, or similar “cost of making good” endorsements, have become increasingly available and popular in the U.S., with the LEG-3 available particularly with larger construction projects and clients. Until recently, though, there were no pub- lished court cases in the U.S. that interpret the language in LEG-3. At least one recent decision changes that, and another influences it. Without getting deep into the nuances, on Sept. 29, 2023, in South Capitol Bridgebuilders v. Lexington, 2023 WL 6388974, 21-cv-1436 (RCL), a federal district court in Washington, D.C. issued an opinion in a matter that involved concrete issues on a bridge, which allegedly decreased the strength of the bridge support structures, and where the insurers claimed there was no physical damage. The court observed that the LEG-3 replaced a broad workmanship exclusion with a narrower one, and thereby broadened the coverage available under the policy. The court also suggested that the exten- sion/exclusion was egregiously ambiguous, and so, in a nutshell, the LEG-3 was construed in favor of coverage. In January 2024, under a similar fact pattern in Archer Western - De Moya Joint Venture v. Ace American Insurance Co., the U.S. District Court, S.D. Florida denied Ace American’s summary judgment motion suggesting no coverage, citing South Capitol , amongst other issues. “Other Insurance” clauses in commercial general liability (CGL) and contractors profes- sional liability (CPL) policies typically limit coverage where there is BR coverage. The recent LEG-3 cases suggest that the existing LEG-3 endorsement may not exclude coverage, and so if it does provide coverage, there may be no cov- erage under the CGL and CPL policies. One CPL underwriter for a newer carrier recently mentioned to me how he anticipated fewer claim submissions to his CPL policies as a result of there being available coverage on the BR claims. Similarly, for CGL policies with construc- tion-defect exposures, there is a likelihood that those carriers will be taking a close look at the BR policy and whether the LEG-3 endorsement is attached to help guide their decision based on their “other insurance” clauses. What seems to be certain is that most carriers are taking a hard look at their LEG- 3 language and will likely be amending it to help restrict coverage the way they originally anticipated. Having said that, it’s also clear that it will depend upon the buyer’s power, as the bigger the contractor, the more influence they’ll have in getting their carriers to keep the LEG-3 language as it currently stands. Policyholders and insurers alike should re- main mindful that most claims present unique issues depending upon the policy’s particular language and factual circumstances. Lastly, it is important to note that while the decision is largely adverse to insurers, it only reflects one court’s perspective. Nevertheless, this decision has the potential to reshape the landscape for LEG-3 wordings. K LEG IT OUT Karen Rice Head of Global Claim Success Initiatives, Proactive2025/26 CONFERENCES & EVENTS LOCAL CHAPTER EVENTS HAPPEN YEAR-ROUND. 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