Legal Edge

<p>Kent Pagel, a Senior Shareholder for <a href="http://pdhlaw.com/">Pagel, Davis & Hill</a>, a Professional Corporation, is the author of the Legal Edge series. Kent and his firm have served as national counsel for SBCA since 1994.</p>

Important Legal Trends for 2011

So much has changed in just a few short years for component manufacturers supplying single and multi-family residential construction projects. It’s no surprise that the legal landscape we face while operating our businesses in this volatile market has changed as well. As you refocus to take advantage of opportunities as the housing market recovers, I encourage you to consider these legal trends.

The Time to Implement Risk Management & Liability Avoidance Procedures Is NOW

  • Use a checklist to make sure you don’t skip an important step in your risk management procedures.
  • Don’t reinvent the wheel—use the SCORE program, BCMC and ORisk as tools to develop best practices around.
  • Effectively use attorneys, and be very careful when agreeing to allow an insurance company to defend you.

He Who Supplies the Jobsite Package "Makes the Rules" in Litigation

  • Builders and condominium developers have seen an increase in construction defect lawsuit filings asserted by homeowners whose homes are valued far below their mortgage balances. 
  • The increased numbers of construction defect lawsuits will inevitably involve lower tier suppliers, including component manufacturers. 
  • Being able to document that a Jobsite Package was received by the customer and the truss erector is a risk management measure that can protect component manufacturers from products and completed operations risks. 

7 Contract Provisions to Never, Ever Overlook

  • Being aware of the big, bad seven is a step toward establishing a fairly-worded contract instead of a one-sided contract. 
  • “Pay-if-paid” or conditional payment provisions mean if the Builder is not paid by a project owner, the CM is not entitled to be paid. 
  • You are likely to see many lengthy insurance requirement provisions in most Builder contract forms.

Design Liability: Are Component Manufacturers Adequately Protected by Insurance?

  • A CGL policy typically provides limited protection for certain activities as long as losses result in bodily injury and/or property damage. 
  • The type and limits of insurance will depend on the extent of component design activities in which your company engages. 
  • Check your CGL policy for a professional services endorsement; if it exists take action to delete it.

Record Retention — Reason & Risk

  • There is no single statute of limitations for the many categories of records component manufacturers hang on to.
  • The federal requirements vary tremendously, do not apply to all types of records, and may even contradict themselves from agency to agency. 
  • It is possible to strike a balance between saving too much and keeping too little.

ORisk Is OReady (OReally)

  • Pre-start checklists can be likened to regular maintenance on your car at a "quick lube place"—fast and necessary. 
  • Having all of the safety hazards in order while managing your maintenance scheduling means that pre-start checklists will actually save you time in the long-run, and they may even save one of your employees from a possible injury, too!

Orisk Online Program Nears Completion

  • Online Risk and Liability Management Best Practices for the Structural Compon-ent Manufacturing Industry, or ORisk, is currently in development and scheduled to be release within the next month.
  • Phase 1 of ORisk contains the foundation content necessary to understand more advanced risk management.
  • Any employee who works closely with risk management, claims handling, in-surance, safety and customer contracts should consider viewing Phase 1.

Antitrust Primer for WTCA Chapter Associations

  • The benefit of belonging to an association is that it is the one place where a group of competitors can work to positively protect and advance the industry in which they are involved.
  • The detriment of belonging to an association occurs when anti-free-market activities begin to take place. 
  • Knowing where competitors can collaborate and where not to tread is extremely important.

Some Guidelines for Truss Collapse Investigations

  • WTCA Legal Counsel Kent Pagel has presented many of the risk management and liability avoidance programs, which will soon be available online in an up-dated and modified format.
  • At BCMC 2004, one question in the Manufacturers’ Roundtable was the im-portance of handling truss collapses proactively and the need to establish guidelines on how to properly conduct truss collapse investigations.