A Proactive Contractor & Claim Avoidance

construction small business claims

What is claims avoidance? And what does it look like?

There's a big difference between capturing claims, preparing claims and avoiding claims. Although the industry tends to use them pretty interchangeably, that's far from reality. Let's take a look at some major differences between these terms.

Capturing & Prep

This is a difference in phase. Capturing a claim typically happens in the field, during construction. You might expect to see daily reports, extra work tickets, photos and time sheets with lots of notes on them. These go directly to the Contract Administrator who will then prepare the claim. We've previously written about how to submit a bullet proof claim and it's all about capturing the best backup during construction and preparing it for submission.

While capturing and preparing claims is one of those necessary evils of construction, it's hardly enjoyable. It's a painful process, and nobody truly enjoys sending that notice letter or going through negotiations.

Enter: Claim Avoidance. The much more palatable, enjoyable, cohesive method of handling those scope changes and job site surprises. 

Claim Avoidance

Capturing and preparing a claim is an excellent start. That means you and your team know your stuff - what the contract says, how to manage extra work and the correct action to take upon encountering extra work. That's all great!

BUT.

What does this do for your client relations?

What we're describing there is a reactionary situation; a construction team is reacting to a problem. And that reaction results in a claim being sent to the client. What if we shifted that thinking to be more PROactive? Wouldn't you prefer you and your team to been seen as an active member of the project, not just a passive partner? Of COURSE!

Take a second and think of a few other ways you would describe a team that is proactive. Some other terms that come to mind: helpful, intelligent, experts, experienced, partners, thoughtful and in control. I like those. THAT'S how I would want to be described.

Look. I get it.  There will be claims. It would be negligent to think otherwise. But the question is, what sort of team do you want to be on? And just imagine - if you put a claim in to a client after working through, and being proactive about, 10 other issues, how easy is that one-in-ten claim going to be? How about if your team is the type that spends more time submitting claims instead of planning and mitigating issues before they arise? Where is your money best spent? Chasing issues after-the-fact, or planning and trouble-shooting ahead of the curve?

It's a lot to do with the type of environment you want to create. And the relationship your team has with it's client. And how your business will be built.

Ask yourself: Which type of team do you want on your next project?