5 Tips for the Construction Claims Management Process
May 16, 2023
Risk is constantly present in the construction industry. So, how can construction companies optimize their claims management processes to better mitigate risks and delays?
For starters, it’s time to be more proactive — and gain a better understanding of how to effectively manage the construction claims process.
The causes of claims in construction management
Before we take a closer look at how to effectively manage claims, it’s important to clarify the types of incidents claims can stem from. Construction claims can be caused by a range of factors, including:
- Project delays (e.g., material delays or lack of access to the construction site)
- Contract or construction disputes
- Unforeseen circumstances (e.g., site conditions, weather delays, natural catastrophes, or labor strikes)
- Poor project management
- Design errors and omissions
- Employee misconduct
Ultimately, risk exists within every aspect of the construction industry, which means claims management is essential to organizational and project success.
5 tips for optimizing your Construction Claims Management Strategy
Although some claims are unavoidable, with a proactive approach to claims management, you can better prevent claims and minimize the time and effort it takes to resolve them. By optimizing your strategy, you can proactively manage risk, prioritize workforce safety, and keep your projects on track and within budget.
Bid realisticallySome contractors may bid low to win the job. But while this may save money upfront, it can drive up costs and time requirements down the line. By bidding realistically, you can set fair contract prices and right-size expectations from the outset. With a clearly defined scope of work, you can also avoid claims from unforeseen events (i.e., force majeure) and reduce the risk of claims throughout the project.
Don’t let claims sit on the backburnerIf a claim arises during a project, it may be tempting to wait to handle it until the end of the job. But timely claims resolution is critical — create a claims and disputes resolution process to avoid added costs and make more informed business decisions. With a management plan in place, you can better organize and monitor the daily claims process, ensuring that claims don’t slip through the cracks.
Keep detailed recordsComplex projects and construction contracts need effective, detailed records, but many organizations struggle to maintain a comprehensive and accurate history of past projects. Relying on siloed data storage and outdated processes like spreadsheets only adds to the problem. Instead, consider a solution that integrates multiple sources of information in a single location and enables employee access to a centralized dashboard for more efficient record keeping and contract documentation.
Implement continuous monitoringWith continuous monitoring, you can identify and assess risks before they happen. Early identification of warning signs (e.g., missed project milestones, unanswered requests, lack of accountability or communication) along with a comprehensive plan on how to respond to the risks is an important part of a proactive claims management strategy.
Invest in a risk management solutionUltimately, avoiding construction claims is risk management. That’s why you need a risk management solution to streamline your construction claims management strategy. A risk management platform with real-time data and insights enables you to minimize inefficiencies, drive down costs, and boost accountability and communication across your organization.
Make proactive risk management a top priority
Construction claims are often caused by unmanaged risk. But with the right risk management platform, you can create a proactive claims management strategy that unlocks operational efficiency, and increased collaboration while minimizing claims.
Request a demo today and learn more about how you can streamline your construction claims management strategy with Aclaimant’s insight-driven workflow solutions.