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CONSTRUCTION CLAIMS BUILDING BETTER OUTCOMES SPRING 2024 ISSUE 1 • VOLUME 9 CONSTRUCTION LANDSCAPE IN 2024 MOISTURE MAYHEM Bad Bets Insured Obligations on Additional Examining the Consequences of Failing To Properly Analyze CoverageOne Company For All Your Consulting Needs EXPANDED SERVICES Expert Disciplines A-W Architects Biomechanical Engineers Building Envelope Certified Industrial Hygienists (CIH) Civil Engineers Delay Claims Consultants NEW Dram Shop & Public Safety NEW Electrical Engineers Environmental Consultants Fire and Explosion Investigators General Contractors Geotechnical Engineers Labor Law NEW Materials Science Engineers Mechanical Engineers Metallurgists OSHA Experts Premises Liability Consultants Premises Security – Police Practices NEW Property Loss Consultants Safety Consultants NEW 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 35SPRING 2024 | 3 SPRING 2024 | 3 THE BONES SPRING 2024 10 ON THE COVER BAD BETS ON ADDITIONAL INSURED OBLIGATIONS Examining the Consequences of Failing To Properly Analyze Coverage 22 CONSTRUCTION IN 2024: THE RISK MANAGEMENT LANDSCAPE A Look at the Biggest Challenges Facing the Industry This Year 26 MOISTURE MAYHEM The Evolution of Water-Intrusion Claims in Construction 30 AVOIDING THE GUESSING GAME Subjectivity Abounds in Estimates Produced for Resolution of Construction Claims 14 California The Consequences of Internet Rage 16 Ohio The Clock Beats All Arguments 18 Florida Analyzing AOBs 20 Pennsylvania A Strong Defense 4 Inside Counsel Technology: The Future Is Now 6 Ask the Expert Looking Back; Looking Ahead 8 Survey This An Exhibit to the Stars 34 Foundations Karen Rice, Vice President of Construction Claims, AXA XL Co-Chair, CLM Construction Claims Community FEATURES STATE-BY-STATEDEPARTMENTS4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine INSIDE COUNSEL TECHNOLOGY: THE FUTURE IS NOW In our first issue of 2024 (it’s too late to say Happy New Year, right?), we look back on some of the trends that shaped 2023 and ahead to those that will have an impact this year. First, in our “Ask the Expert” column, Jason Feld and Dominic Donato, of Kahana Feld, dive into the key factors that shaped the construction industry last year, for better and for worse. Not surprisingly, the ongoing skilled labor shortage features prominently in the industry’s challenges, as do litigation trends such as an increase in third- party litigation funding. The authors also touches on how, in 2024, increased use of technology will help mitigate the impact of the labor shortage and other industry challenges. Next, in our feature, “Construction 2024: The Risk Management Landscape,” experts at Gallagher Bassett take a look at 2024 from a risk-management perspective, outlining tactics and strategies construction companies can employ to mitigate risks this year. Technology, of course, makes an appearance in this article as well. It is a message that features prominently in all CLM publications and across all industries: When it comes to technology, the future is here. It is no longer about imagining what these solutions may accomplish someday—that time has passed. Now, it’s about leveraging technology today to avoid falling behind. The articles mentioned above outline some of the ways technology will improve construction—should the industry commit to embracing it—from better management of data, to safer job sites, to fewer project delays. As 2024 progresses, our upcoming editions of Construction Claims will explore whether these technology solutions help the industry outpace its challenges. Constructing More Content In early March, you received CLM’s construction e-newsletter in your inbox. That newsletter contained a preview of some of the articles in this print edition, and also some web-exclusive content. There will be five more construction e-newsletters heading your way throughout 2024 that will allow you to explore industry top- ics and developments beyond our magazine articles. The goals are to provide you with more key industry information, and also to offer more opportunities for you to participate in our content production. Beyond our typical magazine columns and features, we’ll be accepting web articles on court decisions, pending or passed legislation, and construction claims and litigation trends you are seeing. In addition to contributed articles, we will be developing some in-house content as well, and you will have the opportunity to participate as expert sources of information, providing quotes and data on developing stories. I look forward to working with all of you even more closely on even more content as we navigate the changing world of construction claims together. K PHIL GUSMAN Editor Phil.Gusman@theCLM.org SPRING 2024 ISSUE 1 • VOLUME 9 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© 2024 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. CHIEF EXECUTIVE OFFICER Ronna Ruppelt 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 ClarkWorld-class.Globalreach. 800.580.3228 rimkus.com YOU HAVE QUESTIONS. WE PROVIDE ANSWERS. WHAT HAPPENED? WITHSOMUCHAT STAKE, YOU NEED TO KNOW 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 determine what happened and can help provide 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: What were some of the biggest issues that impacted the construction industry in 2023, and what can we expect this year? A: The year 2023 ushered in a variety of newly implemented construction technologies, includ- ing 3D printed houses; improved wearables that detect all aspects of the construction worker, from location to temperature to heart rate; in- creased use of modular construction for entire apartment, hotel, and condominium projects; and eco-friendly and conservation-minded technologies to minimize carbon footprint, preserve water, and utilize sustainable construc- tion methods, to name a few. We also saw some significant issues in the construction industry. First and fore- most, the labor shortages and challenges in hiring skilled and qualified workers con- tinued to be an issue, resulting in increased delays, construction accidents, and project mismanagement. The skyrocketing interest rates, decline in commercial/office projects, supply chain issues, material price fluctua- tion, and increased changes in scope of proj- ects all negatively impacted the construction industry in 2023. The demand for infrastructure projects put a strain on construction resources as the projects became “mega,” with larger and more complex construction leading to multi-party, high-dollar, and more complex claims. Finally, there is a growing trend of construction claims and litigation being financed by third-party litigation funding sources for personal/bodily injury claims and construction-defect claims. In examining the Technology Adoption Maturity Index (TAMI), the construction industry showed an increased use in drones, virtual reality and imagery, digital twinning, laser scanning, wearables, GPS, 3D printing, and Customer Relationship Management software. The 2023 TAMI also identified alternative production methods and materi- als to combat supply-chain and material-cost fluctuation issues. Additionally, the 2023 TAMI responded to the other construction trends from 2023, including hiring and labor challenges, by the use of robotics and auto- mation to replace the loss of skilled workers. So, what lies in store for the construction industry for 2024? There will continue to be impacts from inflation, increased interest rates, labor and hiring shortages, supply chain issues, material cost spikes, and the lack of proper job site safety measures. But, as indicated with the 2023 TAMI, the mul- titude of technology options and resources are helping curb the number of construction accidents and deficiencies, and minimizing the time to complete projects, which reduces unnecessary delays. Forecasters have described 2024 as “muted” and a “mixed bag” depending on the market conditions. But we are optimistic that the continued implementation of construction technologies and innovations will dramatically assist the ever-growing construction industry. K LOOKING BACK; LOOKING AHEAD Jason Feld Co-Founding Partner Kahana Feld Dominic Donato Partner Kahana FeldKEY SPONSORSHIP OPPORTUNITIES AVAILABLE: Sponsorship@TheCLM.org ALL OTHER QUESTIONS: Help@TheCLM.org CONFERENCE CONSTRUCTION BUILD THIS INTO YOUR 2024 CALENDAR SEPTEMBER 18-20 WATERFRONT BEACH RESORT IN HUNTINGTON BEACH, CA SESSION PROPOSALS DUE APRIL 12 AT 11:59 PM ET8 | CONSTRUCTION CLAIMS TheCLM.org/Magazine SURVEY THIS AN EXHIBIT TO THE STARS Construction as of Feb. 14 around NASA’s retired space shuttle, Endeavor, in Los Angeles. According to an LA Times article, the shuttle will be the premier exhibit in the planned California Science Center’s Samuel Oschin Air and Space Center. Ultimately, Endeavour will sit in vertical launchpad position enclosed in a 20-story tall museum space. PHOTO CREDIT: GETTY IMAGES, MARIO TAMANext >