Construction Defect Claims on the Rise

If you’re in the construction industry, you have probably seen business booming in the past year. The COVID pandemic shut down construction for a while. There were a lot of unknowns at this time, so homeowners and developers didn’t know how to proceed with planned construction projects.

Those days have passed. There are no more mass closures or issues with supply chains. Businesses and homeowners are looking to build, and general contractors are able to find laborers and suppliers to help.

Reports and statistics are showing good news for the construction industry. The value of the construction projects at play currently is close to $500 billion. Construction spending has increased by 11.3% on a year-on-year basis.

This is great news, but the construction boom comes with risks. Defects are trending in the industry, which is not such great news. These claims stem from any defect in a building that deviates from what was promised. This could include leaky plumbing, poor design, electrical issues, cracks in the foundation, mold, and more. These claims can be filed as late as 10 years from the completion of the project.

Several factors are driving up defect claim activity. First of all, there has been an overall increase in municipality claims. There has also been a spike in the number of high-end custom homes being built. Many of these are valued between $10 million and $15 million.

Construction defect claims are also being fueled by delays and property abandonment. Mechanical liens, payment issues, and increases in interest rates are contributing factors. When general contractors walk away from job sites, the property owners may file construction defect claims as a form of revenge.

It’s also important to note that in some parts of the country, property values have doubled over the past few years. This has led to increased cost of repairs and settlement values for construction defect claims. Plus, lawyers are focusing on pursuing claims with high dollar values.

When these claims go to court, juries tend to agree on large awards to plaintiffs, especially if they sense injustice. This is true of construction claims that involve construction defects, bodily injury, and property damage.

Of course, this is affecting the insurance side of things. Carriers are likely to cancel policies or pull out of the market altogether when they see trends like this. They are more likely to scrutinize their policyholders and ensure that they engage in proper business practices.

 Contact Us Today

More construction is always a good thing, but this also means that defects are becoming more common. Growth brings about risk, unfortunately.

If your project is facing allegations of defects, seek legal help from the Florida defective construction claim lawyers from Linkhorst Law Firm. We represent contractors, subcontractors, and homeowners in construction defect disputes relating to the quality of construction and construction contract warranty claims. Schedule a consultation today by filling out the online form or calling 561-626-8880.

Source:

riskandinsurance.com/construction-defect-claims-on-the-rise-understanding-the-trends-and-impacts/