Essential Business Concerns for Construction

Contractors during

COVID-19 Pandemic

The COVID-19 pandemic has had a major impact on the United States, the construction industry, and society at large. If you are concerned about your business, the following services and products may be able to help.

Paycheck Protection Program 

The Paycheck Protection Program was established near the beginning of the COVID-19 crisis in the United States and provided funds for small and medium-sized businesses that were in financial distress due to COVID-19, stay-at-home laws, and the economic impact of the coronavirus. While funds were quickly depleted, the Small Business Administration was given additional funds during the second round of funding so that the program provided up to about $650 billion in potential loan forgiveness funds. While the program technically ended on Aug. 8, 2020, the program had provided a little more than $520 billion of funds to small businesses, leaving another $130 billion unclaimed. At the time of publication, Congress is contemplating another stimulus package, which may open the program back up. If your construction company has declined like so many others since the start of the pandemic, you may be able to receive funds up to $10 million, many of which may be forgiven if you spend at least 60% of the funds on payroll costs. You can learn more about the program and access the application here.

Force Majeure Provisions in Your Contracts 

Force majeure provisions are special clauses in contracts that determine the rights of the parties if something unexpected happens. For many people, this was the coronavirus. Those contractors who had adequate provisions are more likely to be able to protect themselves against adverse consequences caused by the pandemic and resulting issues. 

However, force majeure provisions are often strictly construed by courts, so they must contain very specific language to indicate when they will apply. Now that you have a better idea of what to expect, you can draft future contracts that account for the aftermath of the COVID-19 crisis, such as your rights if any of the following happen:

The federal, state or local government imposes a stay-at-home order or restricts travel

You have to terminate or furlough employees due to ill workers or workers who must stay home to care for their children or other infected people

  • You experience to supply and material shortages
  • You experience disruptions to labor
  • There is a surge of cases in your area 

Your contracts should contain very specific information about what happens in these conditions, how delays are handled, and whether you will be required to pay any penalty during these instances. You should also have clear language about providing notice if one of these conditions arises. 

Business Interruption Services

If you did not previously have business interruption service, which applies when the insured sustains a direct physical loss of or damage to property, now may be the time to consider investing in a policy. Physical loss does not necessarily have to be caused by a physical condition. Courts have interpreted this to include property that cannot be used because of toxins or other health or safety concerns. If you purchase this type of insurance, be sure that it does not specifically exclude losses caused by viruses or bacteria. 

Mechanic’s Liens 

Despite the pandemic, mechanic’s liens are still one of the best ways to ensure you get paid for the work you perform. Although many courts initially closed to the public during the COVID-19 pandemic, many of the filing deadlines remained the same. An
experienced construction lawyercan notify you of the process of securing a mechanic’s lien and providing legally-required notice. A lawyer can also ensure that you meet the statutory deadlines to file your lien, as well as payment bond claims and requests for equitable adjustment claims. 

Contact Our Firm for Help

If you need help during this ever-changing time, contact
Christopher Weiss Attorney at Law at (407) 928-6737.

Construction Workers in Covid-19 Pandemic

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