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5 Reasons Construction Companies Get Sued And How To Avoid It

April 21, 2023

Whenever builders and construction companies complete construction work there is always the risk of litigation or being sued depending on the quality and standard of the job. Here are five reasons construction companies get sued, so you know the risks and what to avoid.

1. CONTRACT BREACH

If your client feels as though there has been a breach of contract, they could decide to pursue further action and take you to court. Alleged breaches could include:

• Work being performed which hasn’t been agreed on in the contract

• Changes to the clients’ property without their will

• Damage to the property

• Not completing construction work agreed upon

2. QUALITY OF THE CONSTRUCTION WORK

Construction companies need to ensure the quality of their work is up to standard or face potentially catastrophic penalties. If your client finds issues with the finished work or it doesn’t pass inspection tests, the blame will likely fall on the builders. Poor construction work can also lead to dangerous accidents in the long run, with potentially fatal consequences and construction lawsuits.



3. DELAYS

Delays to the construction project that occur due to deliberate reasons or incompetence can lead to litigation. While some delays can be due to unforeseen reasons such as bad weather, delays caused by failure to get permits or materials are often affiliated with the builder or construction company.

4. NEGLIGENCE OR SAFETY ISSUES

If an employee or subcontractor gets injured on the worksite because of a lack of safety signage or negligence, construction companies leave themselves open to being sued. Making sure you have developed and delivered a solid safety plan will help keep work crews informed about the risks, and (hopefully) keep them safe.

5. PAYMENT ISSUES

If you have hired subcontractors to complete construction work, you will need to ensure you deliver on your financial commitments. There may also be payment issues which crop up between you and your client. If your client is unhappy with the finished construction work, they may hold off on payment until the work has been inspected or changed, which can lead to a construction lawsuit.

SO HOW DO YOU AVOID GETTING USED?

It’s quite simple, use common sense! Always keep lines of communication with your client open so all parties are aware of any significant changes and developments and keep a record of your communication. Making sure your employees are properly qualified and licensed is integral to ensure your construction company is producing high-quality work, and also gives you legal protection through insurance.

The building and construction industry is heavily dependent on word-of-mouth recommendations, and news of faulty or negligent construction work may impede your chances of growing a successful business. If you have any concerns or questions over licensing, get in touch with us today.

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