Volume 4 - Number 15 | April 10, 2006 - Construction Claims Advisor

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You are here: Home » Volume 4 - Number 15 | April 10, 2006

Volume 4 - Number 15 | April 10, 2006

EDITOR'S NOTES | Issue 4-15: Located 65 nautical miles off the coast of Oxnard, Calif., foggy and windy San Nicolas Island offers a not-so-pristine backdrop to this week’s first case. An electrical project took center stage at this remote military testing site when the contractor sued the U.S. Navy for delays and claims totaling more than $500,000. The contractor and Navy both learn valuable lessons—keep accurate records and stick to the contract.

The latter lesson can hold true for this week’s other cases. An arbitration award will only be time limited if the contract says so. Capital equipment repairs are not usually part of a contract, and therefore don’t warrant performance bond payouts. And finally, an insurance contract that excludes damage caused by earth movements also excludes man-made disasters, not just acts of God.

DISTRICT COURT RULES EXCLUSION DAMAGE FROM EARTH MOVEMENT IS NOT LIMITED TO ACTS OF GOD: A Phoenix-area church tries to wade through its insurance contract after a broken water pipe deposited nearly 80,000 gallons of water in the foundation of one of its buildings.

CAPITAL IMPROVEMENTS TO JOB EQUIPMENT FALLS OUTSIDE SCOPE OF INSURER’S PERFORMANCE BOND: A surety is not responsible for shelling out performance bond payments for capital improvement equipment repairs when the contractor doesn’t make good on invoices to its equipment subcontractor.