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CONSTRUCTION CLAIMS BUILDING BETTER OUTCOMES SPRING 2025 ISSUE 1 • VOLUME 10 SETTING THE STANDARD ON MASS TIMBER ROUGH ROAD AHEAD FIREPROOFING CALIFORNIA ENHANCING WILDFIRE RESILIENCY IN CONSTRUCTION800.729.0355 mcconsultants.com One Company For All Your Consulting Needs GENERAL LIABILITY & CONSTRUCTION FORENSICS ONE FOR ALL Construction Related Claims Construction Defect, Job Site Accidents, Delay Claims, Heavy Equipment, NY Labor Law & Surety Claims Pre-Suit Claims Engineering Analysis, Construction Claims, General Liability Claims Accident Reconstruction Commercial Vehicles, Bicycles / Motorcycles Multi-Vehicle Collisions, Driver Factors Cause & Origin Investigations Investigate Claims, Evaluate Damages, Repair Specifications, Reconstruction Oversight Trip / Slip / Fall, Coefficient of Friction Analysis, Premises Security, Alcohol-Related Injuries Cost Estimating & Damages Analysis Cost of Repair, Repair Recommendations, Damages Analysis and Reasonableness of Costs Aerial Drone & MC Virtual-360 ™ High Resolution Aerial Photography / Videography 360 Camera / 3D Scanning, Room & Entire Structure Animation Services Animation Trial Exhibits and Litigation Support Videos 35 Premises Liability/ Security & Dram ShopSPRING 2025 | 3 THE BONES SPRING 2025 10 ON THE COVER FIREPROOFING CALIFORNIA Enhancing Wildfire Resiliency in Construction 22 SETTING THE STANDARD Searching for Mass Timber Rules in a Sea of Guidelines 26 ROUGH ROAD AHEAD Common Construction Claims and Their Impact in 2025 30 THE HIDDEN BALL TRICK Aaron Judge’s Lawsuit and Lessons for Contractors 14 Massachusetts Parsing the Policy 16 Florida Adapting to Change 18 Ohio Determining Foreseeability 20 California Extending the Exception 4 Inside Counsel Beyond the Industry Impact 6 Ask the Expert Cyber-Secure 8 Survey This Picking Up the Pieces FEATURES STATE-BY-STATEDEPARTMENTS PHOTO BY AXELLE/BAUER-GRIFFIN/GC IMAGES4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine INSIDE COUNSEL BEYOND THE INDUSTRY IMPACT As we were working on this first Construction Claims issue of 2025, wildfires were raging out West, devastating the Los Angeles area. Of course, we’ve covered the event here at CLM both online and in print, including an in-depth feature that appears in this edition (see pg. 10). Our coverage, though, generally takes an industry-centric approach: What are the expected insured losses? Will it be a significant claims event for the industry and specific carriers? What are the lessons learned from a risk management standpoint? How can we rebuild in a way that increases resiliency? Those questions are important not only for the industry, but also for society when it comes to protecting vulnerable areas so that similar events in the future do not cause the same devastation. But sometimes covering catastrophes with an eye toward the impact on the industry does not capture the impact on people. Many CLM members, including a large number involved in our Construction Community, live and work in the Los Angeles area and have been personally affected by the recent wildfires. Those of us who are far removed from the West Coast have likely heard stories about friends and colleagues who have suffered some level of loss. It is with this in mind that the authors of this edition’s wildfire feature, “Fireproofing California”—Terence Kadlec and Patrick Kelahan, both with MC Consultants—asked me to share the following message: The wildfires in the Los Angeles area are a stark reminder of the devastating impact these catastrophic events have on our communities. Most of us know someone that has been affected, many of which are in our CLM community. So, before continuing reading this article, consider donating to an organization committed to supporting relief to those impacted; such organizations include the Red Cross (redcross.org) or Los Angeles Fire Department (supportlafd.org). CLM thanks Terence and Patrick for including this note and call to action with their article, and we encourage those in the CLM community to help our friends, colleagues, and the people in and around Los Angeles in any way they can. K PHIL GUSMAN Editor Phil.Gusman@theCLM.org SPRING 2025 ISSUE 1 • 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 ClarkNumerous 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. YOU HAVE QUESTIONS. WE PROVIDE ANSWERS. +1 800 580 3228Consultants. Experts. Innovators.™rimkus.comrimkus.com WHAT HAPPENED? WITH SO MUCH AT STAKE, YOU NEED TO KNOW6 | CONSTRUCTION CLAIMS TheCLM.org/Magazine ASK THE EXPERT QUESTION: What are some of the key cybersecurity challenges for the construction industry in 2025? A: Ransomware is at the forefront of most companies’ minds when it comes to potential cyberattacks. A typical ransomware claim originates when a threat actor gains access to a company’s computer system. Threat actors can initiate access in several ways, but a good number of intrusions occur because of human error, such as clicking an unfamiliar link or approving a multi-factor authentication request that an employee did not initiate. As a result, the threat actor can access the company’s system and, depending on the network security, they can potentially roam the system and install ma- licious software, exfiltrate data, or encrypt files. Once the ransom note file is discovered (typi- cally a .txt file or similar), a series of steps must occur to secure the company’s system and expel the threat actor. These steps can cause large losses for the company. Specifically in construction, these steps can completely shut down work on a project, depending on the extent of the attack. Anyone who accesses data within a construc- tion company should be trained on what to look for in suspicious emails. It is also important that companies segment data and keep important data on a need-to-know basis. Companies should maintain immutable backups and put an incident response plan in place. These are a few safeguards a company can have in place to lessen or avoid the impact of a ransomware attack. Third Parties Completing a project requires the cooperation of many entities, including suppliers, contrac- tors, and other vendors. While necessary, the involvement of multiple parties in one project can increase opportunities for threat actors. A vendor with poor cyber hygiene can enable a threat actor to infiltrate an important email chain, which, in turn, can cause delays that have a ripple effect down the chain. It is important to know if vendors and suppliers have proper cyber protocols in place, including cyber insurance, to help ensure all parties are protected and disrup- tions are minimized. Social Engineering Social engineering attacks have increased, espe- cially in the construction industry. Construction firms are often targeted for financial reasons, with attackers using social engineering to redirect vendor payments to fraudulent accounts. In some instances, compromised firms are exploited as springboards for downstream phishing attacks, where unauthorized access to email accounts enables hackers to target clients and vendors. The increasing use of digital sign ins via mobile devices at job sites has contributed to the rise in attacks, as employees tend to be less cautious when dealing with phishing emails on the move, making them more vulnerable to such scams. One example of a social engineering scam involves a threat actor inserting themselves into a conversation regarding an invoice and submit- ting fraudulent payment instructions in place of legitimate ones. This type of scam could include payments to suppliers, subcontractors, or any third party, as well as internal payments such as payroll. When the payment is made, it is sent to the fraudulent account instead of the intended recipient. Sometimes, fraudulent instructions are not caught, resulting in multiple payments to the threat actor. Many of these emails look completely legiti- mate. Developing internal systems to verify new payment instructions is one way to safeguard against these kinds of losses. Implement- ing these systems and making sure everyone involved in the payment-making process knows these processes will help keep projects moving along and funded. K CYBER-SECURE Christa Johnson Cyber Claims Team Lead, Gallagher Bassett#CLM2025 And Claim Your Spot in Dallas at the Annual Conference TODAY REGISTER 6 Credits CE/CLE 95+ Innovative Sessions 300+ Insightful Speakers 1,200+ Inquisitive Attendees ∞ Ideas Unleashed Among Experienced Claims Resolution and Litigation Management Professionals8 | CONSTRUCTION CLAIMS TheCLM.org/Magazine SURVEY THIS PICKING UP THE PIECES An aerial view on Feb. 12, 2025, showing the aftermath of the Eaton Fire in Altadena, California. Devastating wildfires raged throughout January in the Los Angeles area. Our pg. 10 feature, “Fireproofing California,” explores how construction materials and methods could protect structures from this recurring threat. PHOTO CREDIT: MARIO TAMA/GETTY IMAGESNext >