The winter storm that brought snow, freezing temperatures, power outages, frozen water lines and bursting pipes to Texas, shutting down most construction projects in the process, forced many contractors and owners to take a look that their contracts to determine who is responsible for the ensuing delays and the costs to repair any damage.
Co-authors: Russell Jumper and Tim Fandrey
Hurricane Harvey caused severe destruction in Texas with its significant winds and historic rainfall. But Harvey may also prove to be a costly lesson for many project owners and contractors. As Texas begins to focus on recovery in the coming weeks, Harvey will further serve as a reminder to all construction industry stakeholders that hurricanes, and other “acts of God”, are risks that must be effectively managed during the pre-construction and construction phases of every project. While it is difficult to effectively avoid the risks attendant to a highly-destructive, low probability event that occurs on short notice, owners and contractors have two primary tools at their disposal to mitigate the effects of such an event: (i) contractual force majeure provisions; and (ii) builder’s risk insurance.