We hope that everyone is safe and getting back to business as usual. Although Gustav certainly did not create the same widespread damage and inconveniences as Katrina, precautions should be taken to document any delays that may ensue on a project from either the mandatory evacuation and/or the widespread power failures upon return. We provided a very general advisory to our clients and would like to pass it on to each of you in case you may find it useful.
Your particular contract will govern both your rights and your reporting obligations. However, we suggest that you look at the following provisions of the commonly used AIA General Conditions form A201 - 1997, as a guide in documenting your claim:
§ 10.6 EMERGENCIES
§ 10.6.1 In an emergency affecting safety of persons or property, the Contractor shall act, at the Contractor's discretion, to prevent threatened damage, injury or loss. Additional compensation or extension of time claimed by the Contractor on account of an emergency shall be determined as provided in Section 4.3 and Article 7.
§ 4.3.7 Claims for Additional Time
§ 4.3.7.1 If the Contractor wishes to make Claim for an increase in the Contract Time, written notice as provided herein shall be given. The Contractor's Claim shall include an estimate of cost and of probable effect of delay on progress of the Work. In the case of a continuing delay only one Claim is necessary.
§ 4.3.7.2 If adverse weather conditions are the basis for a Claim for additional time, such Claim shall be documented by data substantiating that weather conditions were abnormal for the period of time, could not have been reasonably anticipated and had an adverse effect on the scheduled construction.
NOTE: Although most owners will be aware of the ordered evacuations, it would not be a bad idea to include some documentation of the order to evacuate your Parish and/or the Parish in which the project is located either through news articles from the Internet, news paper or some other reliable source. The same could be said for the time that the mandatory evacuation order was lifted. For example:
http://online.wsj.com/article/SB122014588362886145.html?mod=googlenews_wsj
http://www.wwltv.com/topstories/stories/wwl90208cbparishlist.3888dd9f.html
Generally, extensions of time will be made by change order as provided in the general conditions or other contract provisions for your project.
Again, we must emphasis that your particular contract will govern how and when you must submit your claim for a time extension and what must be submitted to support the claim. As the language of your contract may differ from the language provided above, if you would like for us to review your contract and assist in preparing your claim for a time extension, please do not hesitate to call one of our lawyers.
Another point to keep in mind is to notify all appropriate insurers of any property damage to equipment or to the project resulting from Hurricane Gustav. As the particular policies will govern your situation, whether there is coverage for your damage will depend on the particular provisions (particularly the exclusions) of the policy in place at the time of the damage or discovery of the damage. Typical policies that might provide coverage would be a Builder’s Risk policy, a first party property policy or a Commercial General Liability Policy. As stated, because coverage can only be determined from a review of the particular policy, we can only recommend providing the insurer with notice of your claim and preparing a proof of loss. Please support your claim with photographs and allow the insurer’s adjuster to inspect any damage that you may have. Again, if you would like for us to review any insurance policies to determine if there is coverage for certain damages and/or assist you in preparing your proof of loss, please do not hesitate to call one of our lawyers.
Best wishes for a speedy recovery!
-- The Attorneys and Staff of Shields Mott Lund L.L.P.
