Weather is the leading cause for schedule delays in construction projects!
The Business Insurance article entitled “Contractors face tough time covering construction delays,” authored by Gavin Souter, highlights how “…delays in construction projects can cause huge increases in costs.” Souter asserts that traditional construction insurance coverages generally do not cover construction delays, such as weather delays. Further, the majority of construction projects today do not finish on time and within budget.
A recent International Risk Management Institute (IRMI, www.irmi.com) Construction Risk Conference (CRC) identified weather as the leading cause for schedule delays in construction projects. Followed by adverse weather and weather events, some of the other reasons for schedule delays in construction projects include: change orders, design errors, documentation errors, approval delays, materials availability, and labor availability, for example.
Adverse weather and weather events cause schedule delays and project overruns, leading to mission critical problems around time or schedule and money or budget. The project stakeholder who bears the schedule and budget risk depends on the agreement between the owner and the contractor — which generally leads to misunderstandings and from time to time disputes between the parties.
In some cases, schedule delays as a result of adverse weather and weather events cannot be made up by working extra shifts or increasing labor resources in order to meet contract milestones, handover dates, and substantial completion. Further, contractors are generally liable for liquidated damages (LD) for schedule delays as a result of normal adverse weather and normal seasonal weather, versus unusually severe weather and force majeure (FM) events.
However, definitions of liquidated damages (LD) and force majeure (FM) events are not universal standards across the construction industry, and vary by company and project. Again, the project stakeholder who bears the schedule and budget risk depends on the agreement between the owner and the contractor. Liquidated damages (LD) risk in one contract can be force majeure (FM) risk in another contract, and vice versa.
(Source: “Contractors Face Tough Time Covering Construction Delays.” Business Insurance, www.businessinsurance.com/article/20181106/STORY/912324991/Business-Insurance-IRMI-Contractors-face-tough-time-covering-construction-delays.)
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