Coronavirus & Construction: How to Get Back to Work Safely

Everyone wants to get back to work, but doing so safely from COVID-19 is key to keeping your business flowing.

Watch this webinar to learn:

• Is your construction project now considered essential?
• How following OSHA safety guidelines can affect insurance
• Contract clauses to protect you in the future

Full Transcript

Seth:
Hello everyone, this is Seth bloom. I’m the Senior Director of Attorney Services at Levelset here in new Orleans. We’ve been doing webinars for the past couple months and I know these have become even more popular and important during everything we’re going through with COVID. Today two of our experts and two of the members of the attorney network and expert center have decided to participate on this great webinar today. So I’m gonna introduce Andrea Goldman. She’s an attorney in the greater Boston area. She also works in the capacity as a general counsel, but I’ll let her go in more depth. We also have Tom messier and he’s in the insurance industry and has had a lot of experience with that. So I think the combination of both of them are going to give you a great insight into what we’re going to talk about today. So Andrea, I don’t know if Andrea or Tom’s going to go first, but whoever wants to go first we look forward to hearing from you and please everyone out there ask questions. We can wait until the end if some questions come up in the middle. Please ask them. So we looked forward to a good webinar. Thanks.

Andrea:
So, hi folks. I am Andrea Goldman. I am general counsel of the builders and remodelers association of greater Boston, which is part of the home builders. I’m also a member of the national association of the remodeling industry and I’ve been a construction lawyer for 30 years. Tom, who’s going to be speaking a little later, is a construction expert in the insurance industry. And I just found out he beats me by seven years. And we’re here to help you. Since this pandemic started, I’ve had clients calling me on a regular basis with questions as they arise about what they can do and what they can’t do with what’s happening out there in construction. This is not going to be a state specific presentation, but we’ll try to answer your questions as best as we can. Of course, Tom and I are very familiar with Massachusetts and more of what’s going on in New England.

Andrea:
But I called this presentation Coronavirus and Construction: Getting Back to Work because people are trying to get back to work and the States are opening up. So today we’ve got an introductory slide of the first question that came up with and is coming up with my clients is can I work? Can I keep working? Can I go back to work? And also how can I work safely? So we’ll talk about the guidelines that a lot of States have been issuing about what is considered and what is not. And that varies enormously from state to state. Another issue that we’re running into is clients who don’t want to work. They either want to suspend contracts or stop contracts and they want to be able to do that without suffering financially and being penalized. And then and there are two ways that hopefully you’re going to be protecting yourselves when you do return to work. And one is through your contracts, you’re going to need to be revising your contracts and including pandemic related clauses. I’ve been working on those for clients. And then the insurance considerations, which I’ve been learning this week are huge in terms of what your insurance is going to cover and not going to cover.

Seth:
Okay, good. Andrea, again, real quick and you know, as you know, I’m an attorney too and basically, and I know you’re about to talk about this, but I’ve found it really interesting. Yesterday I saw the first kind of class action TV commercial about suing insurance companies for you know, business interruption insurance. And that seemed to be something that wasn’t available to an epidemic situation. So I’m sure that everyone out there is interested in knowing a little bit more about that as well.

Andrea:
Well, we’re definitely including that in this presentation, but that’s a Tom question. So, Tom, do you want to say something about business interruption?

Seth:
Tom, why can’t we sue you?

Tom:
They can. This is the America, you know, anybody can sue anybody. Most policies or business interruption to be for the, for the policy to pay requires physical damage to the location, you know, that we covered the interruption for, so if you were a restaurant and you had a fire in your kitchen, that’s a covered peril, you’re shut down for a couple of months, we would cover that.

Tom:
There has to be, most policies require physical damage to the location for a business interruption policy to to become effective.

Tom:
So that, that’s really where the issue comes into. And there’s a lot of, as you said, there are a number of different lawsuits right now. And there’s also a number of different legislatures that are, are, are looking at it as well to see what they can do about that. But the policies as they’re written really did not contemplate something like this.

Andrea:
So an important question and hopefully something we’re going to take care of in those contract clauses that you’re going to be including in your contracts from now on. So the first question, and I think most of you know this already is most States are only allowing workers to, to continue with working if their business is considered essential. And you need to be able to find out whether the construction work that you’re doing is considered essential. So I can tell you Massachusetts is a really interesting state to be in because we’ve had fights between the governor and the mayor of Boston about what’s essential and what isn’t. And we’ve also have fights between the cities and the towns about what’s essential. So the first thing to do is to go and check your state regulations and those will be on your state websites.

Andrea:
I know that Massachusetts has COVID updates and FAQs, frequently asked questions on their website about what you can and cannot do. And I have had the good luck of speaking with another attorney in Massachusetts who’s a lobbyist and asked him about the interpretation of some of these definitions of essential services. And he says, just to make it all easy on us, that Massachusetts has been deliberately vague. And the reason that they’ve been big is that they want to allow some wiggle room for what people can and cannot do. And it also depends on who’s lobbying. I know here the landscapers lobbied heavily and landscaping is considered an essential service. The home builders lobbied heavily and new and home construction is considered an essential service. Strangely enough though, in the last order from the governor, they said, you can only do construction housing for housing net is going to address the housing shortage in Massachusetts.

Andrea:
So what does that mean? I got in touch with my buddy and I said, okay, does that now limit us to only projects that are going from let’s say a single family home to multi-family or that are construction apartment buildings, condominiums, what is this mean? And is this intended to limit further limit construction? And he said, no, no, no, they didn’t intend to further limit construction. But the city I live in interpreted it very strictly told all the builders they had to stop working and said, unless you are working on a project where you are literally increasing the amount of housing in Massachusetts, we’re shutting you down. So people are up in arms now in some States. I have done a little bit of a research around the country so that I could hopefully be a little more helpful to you folks.

Andrea:
You can apply for a waiver for your specific project in order to be able to keep working. And here it’s called an essential service designation request that I’m just suggesting that that is something that you look for. Finally you’ve gotta use your common sense. If you are working on an addition and the owners have to move out of the house and they’re living in a hotel, they are exposing themselves to the public and they’re putting themselves in a potentially dangerous, I don’t know if I’d use the word danger, but they’re exposing themselves to the potential for contracting the virus. Getting them back in their homes is really important. So in that case, you may be able to justify continuing work. If you’re about to start a bathroom run out and you haven’t even gotten started, forget it. You’re not doing that. Now.

Andrea:
On the other hand, if you’re working in a new construction project then, and you can maintain social distancing and no one’s living at the, on the, in the premises that and yes, you can move forward. So I think you’ve got to look very carefully at your own specific projects and figure out first whether they are essential. Now obviously if you do public construction, if you were on utilities, anything along those lines, of course those kinds of projects are going to be considered essential. But then we have to get into the safety guidelines and the kind of precautions you have to be taking.

Andrea:
So speaking of safety guidelines OSHA has this really, really nice chart on their website for what is required of people if they’re going to be going out and working. Taking a look at it. I can tell you that it is not as strict as some of the safety guidelines that I have seen. For example, for public construction in Massachusetts, they require a COVID designated officer on site during the construction. There are guidelines about workers taking their temperature before they come to work. They also have to get to work by being any vehicle with, I think it’s no more than two people. I don’t know if Tom remembers. So those guidelines are going to be even more strict. So start with OSHA, take a look at OSHA and then look at your state and local guidelines. And again, we have a conflict between what the state in general is requiring and local cities and towns. Massachusetts today, the governor just announced that everybody has to wear a mask when they go outside. Brand new just happened. I think you’ll find that in reality workers are not necessarily wearing masks, but they’re being told that they should. So you’ve got to look at your state guidelines, but you also have to look at your city guidelines because some cities are stricter than others. Any questions out there yet?

Andrea:
So the quiet room right now. Okay, well I hope that means people are listening and not sleeping. The first question that I got when all of this started was from a client who called up and said, we want to suspend all our jobs. You know, until we know more about how this illness is working. We want to suspend everything for two weeks. That’s pretty much where we started. And she said, can I do that? And in typical lawyer parlance, I said, it depends. So the reason that it depended is because in law we always go back to the contract and hopefully most of you have contracts that have what’s called a force majeure clause. A. So what is a force majeure clause? A force majeure clause is a clause that pertains to Acts of God or natural disasters. So what that’s saying is in the event of, and most of you will have something along these lines.

Andrea:
Tornadoes acts, various acts of workers strikes, that sort of thing. Maybe if you’re in the South that might… Flooding, … Have the right to suspend or to postpone work. So the question becomes it’s a pandemic, is it considered a natural disaster? And that is something that is going to be litigated big time I think throughout the country. So let’s go back to what is the purpose of all of this. The purpose of all of this is who is going to bear the financial risks of this pandemic. Is it going to fall on you because you want to stop work because you need to protect your workers or is it going to fall on the owner who wants you to come in and do the work? And I’ve seen this happen in many different sizes. There are some owners who are saying, I don’t care what’s going on.

Andrea:
You have the job next week. And then you’ve got owners who are saying to suppliers, why is your stuff late? I, I have a client manufacturer’s windows and doors and they’re saying we need those windows and doors. And you saying, well, I have a supply chain problem. I can’t get the parts from, I believe some manufacturer because that’s being held up. So the only way to truly protect yourself because it’s Tom said in the beginning, he can’t stop people from suing you is to have something you can point to in your contract that says in the event of the pandemic natural disaster government orders and I’ll tell you about the government order cause I just put that in this week. Or other force majeure events in order to protect the health and safety of workers and customers. We have the right to suspend or cancel projects.

Andrea:
Now I’ve been doing my homework and the question becomes is the pandemic keeping you from working or is a government order preventing you from working? And again this is all about who is going to bear the financial risk. There’s case law out there that says that if you don’t put in, the government told me not to work, you might not be able to defend your position of stopping working. I know that sounds crazy, but again, you want to spell it out and I, in terms of stopping or not stopping for basically you can point to the clause. Again, that’s not going to keep someone from suing you, but at least it’ll be something that you can using your defense. Yes. Seth.

Seth:
Andrea, sorry, I’m, I’m going to break you up and thought for a second, but someone had a good question from earlier about you know, enforcement of these things. You know, what happens if you don’t wear a mask? And you’re out on a construction site working. I mean, I mean, is there… Are the police coming by? Is it different, you know, for each municipality? I mean, is it just kind of like on the books at any thoughts on that?

Andrea:
That’s a great question. You know, I, I think it will vary enormously. I’ve heard of cities and towns here finding people. I’ve heard of situations where, you know, nothing’s happening mean the best. My best example of this is I think all of you remember the EPA rule that came about… If you’re in the home renovation or an industry where you had to use certain lead containment procedures if you were working on homes built before 1978 and when it first came out it was an environmental protection agency rule and it came out and everybody was up in arms that there were going to be people in forcing us. And the fines were enormous. They were $37,500 per day per infraction and all the lawyers tried to learn about it and whatnot. And fast forward to today, I’ve heard very little about it being enforced.

Andrea:
So you know, these laws are enacted by this whole presentation is really about how risk averse are you. You know, if you’re not, if you’re not concerned about risk, do whatever, you know, if, if you are concerned about risk, what can you do to protect yourself as much as humanly possible? And that’s really what it’s about. So I would say read your local news. Find out whether people are actually enforcing all of this. I do want to say one other thing. If you don’t change your contracts, if you decide to stop work or suspend work or break your contract with somebody, there’s also a general rule in law that comes into play in these lawsuits, which, which is public policy considerations. So even if you don’t have something in your contract that allows you to stop work and you get up in front of a judge and you say, my workers are all in their sixties, they’re all out risk. I couldn’t let my workers go to work …catchall. That’s what might save you in this situation and make it so that you still have a right to stop work. So it’s, it’s definitely an argument you can make.

Andrea:
So what can we put in our contracts? People are hopefully going back to work. Various States are opening up. What can you put in contracts to protect you so that when you go back to work, you’re not going to be facing litigation and disputes with people about whether you’re working, how you’re working, so on and so forth. So the first one I talked about a bit already as force majeure, having something in there that says, not only do I have a right to stop work because of this pandemic that I have a right to suspend work because we’ve all been hearing about the second wave. We all know that we might go back to work and then have to retreat back into our homes and quarantine ourselves again. So you need to have a right in your contract. The other thing that you want to do is you have a quote, you want to have a clause in your contract that allows for delay because this situation is delaying people.

Andrea:
You’re going to have suppliers who are delayed in getting you materials. You may have delays if you or your workers gets a, you may have delays just because the government is telling you that you need to be more restrictive about the way you’re working. If you have to socially distance at a site, maybe it’s going to make your situation less efficient. You’re not going to have good concurrency in your construction methods and you’re going to have delays. Another place where you’re going to think about clauses in your contracts are indemnification clauses. I don’t want to you know, ruin Tom’s thunder here, but a client of you said I was going to go do renovation work at a house and the homeowner check with their home insurance and the home insurance said that the, the policy would not defend the owner if the contractor sued the owner for transmitting the virus to them.

Andrea:
So what we as lawyers do is we draft what’s called indemnification, hold harmless clauses. And what we say is if you transmit the virus to me, owner to contractor Nan, I am going to hold you harmless. I am going to protect, I’m going to protect you from any lawsuits I’m going to defend and I’m going to pay you back if you were held liable. If one of my workers sues you, I won’t Sue you. I won’t have any suppliers dropping off materials suing you. It also needs to go the other way. He owner is not going to want to be sued for giving you or your workers the virus. Then you get into contracts with your subcontractors. If an electrician comes on site, I mean I saw it honestly going on outside my front door, they’re installing a new gas main three guys working, digging a trench, digging up the driveway. One of them has a mask, the mask is around here. The other two don’t have masks at all. They’re three inches from each other and they’d been working out front every day. So some somebody comes in and goes to drop off some materials or is a plumber and is going to be connecting the pipes and he gets COVID from one of the workers. You know, you want to have contracts with your subcontractors that makes it so that you are not liable for that. It’s hard to prove. Go ahead Seth.

Seth:
Andrea, I think we have some good questions here from some out in the audience and those other ones. One or two of those other ones were participant. Questions not, not my own, but this is a bit of a long one. It’s right on point. Great point. On the government order and the force majeure clause, it seems belts added with suspenders, one government, one governing agencies shutting down and two, there’s a pandemic. I’m interested in brainstorming or thoughts on suspending under force majeure when the interpretation is strange that the insurance companies are saying that is not a defined event or contemplated event. I think they lose and I think that an owner would lose here since 2000 as a young lawyer I added terroristic threats, disease, etc for force majeure I think the broad terms cover. Thoughts?

Andrea:
Well good for you for adding that to your contracts. I mean one of the articles, you know, force majeure is supposed to be for events that are not foreseeable. Okay. And there are going to be people who argue that this was foreseeable. You know, there have been people predicting pandemics now for quite some time. You know, this isn’t the first Corona virus that we have had in recent history. We’ve had SARS, we’ve had MERS, we’ve had Ebola, they just have not been worldwide. And you know, you can, what I say to clients frequently is you can win the war. Okay, you can have a lawsuit, you can get sued, you can defend yourself and you can win but in meantime because you have the battles over. What does force majeure mean? The legal fees are so excessive and you’ve spent all this money just to defend yourself and that’s money that generally you can’t get back.

Andrea:
I don’t want to get too technical here, but a lot of people put what’s called prevailing party clauses into contracts. And that basically means that the person who wins in a lawsuit, the prevailing party may get to collect their attorney’s fees. And the attorney’s fees rules vary from state to state. I know my, I believe my associate is on from Florida and in Florida. When you’re in mechanics, lien litigation, your attorney’s fees back, I can tell you in, in Massachusetts, you don’t get attorney’s fees unless it’s in your contract. So the point being we’re trying to keep you from getting into those lawsuits. Lawsuits are super unpleasant, expensive, and they distract you from your business. Now I think part of this included insurance. Did you hear something there in insurance, Tom? About what’s foreseeable.

Tom:
I think there was a question there about, and I may have said that it wasn’t contemplated. And I probably misspoke there. The real thing, if for a business interruption claim to be collectable, there has to be physical damage to the location. In this case, the argument is there isn’t any physical damage. You know, I didn’t have a fire in my kitchen. I didn’t have a tree fall on my roof. I didn’t have, you know, a car drive through my front window. You know, what’s the physical damage that shut this? You know, that shut the restaurant down. And, and, and I don’t think there is a physical damage. The fact that that, you know, there’s a virus in the community and the government said you got to shut down. That’s that physical damage. And I think that’s, that’s the art, you know, that, that’s where the insurance industry sits on this thing.

Seth:
Well, I’ll tell you what, Andrew, you’re starting to give me anxiety because I, for six to seven years, I did nothing but post-Katrina litigation of the difference between wind driven rain and rising flood water, which sounds like it’ll be, you know, a similar kind of argument with the eruption. And I know Tom’s laughing cause I’m sure he remembers some of those claims. But Paul has a really good question. I’m interested in knowing what the answer is. And he says, well, what happens if someone on the site is diagnosed with COVID 19? Is the site required to shut down for a safety stand down?

Tom:
Well, yeah,.

Andrea:
That, that raises a whole lot of interesting questions and you know, we don’t want to have to be you know, stuck with our slides. We can answer the questions out of order. So first of all you got to look at the safety regulations and you’ve got to look at your government regulations. You know, every day, I don’t know if the rest of you are glued to CNN, but we’re talking about contact tracing and we’re talking about self isolating if you’ve been exposed, I mean someone gets diagnosed at the site, obviously they can’t come to work. So let’s start with that. That person can’t come to work. Then they talk about the degree of exposure. You know before we used to say if you’re exposed to somebody you need to isolate for two weeks, but what is exposure, you know, is exposure someone handing you a bag at the grocery store?

Andrea:
I’m, I’m using this example because Dr. Fauci used it last night or is it the person standing next to them who’s been bagging all day? I think the answer is it would depend. And in our department of public health here is very useful. We have a hotline you can call that’s very useful. But you know, if the guy who’s been sitting in the Bobcat all day is the one who’s been, who now test positive, the reality is anybody could be positive in any time. And none of us actually know because there’s been so little testing out there. So you need to check with the town safety guidelines, the state safety guidelines, look at OSHA, and then if you have to shut down and we’re back to those contract clauses again, you know, the owner is going to be up in arms because you have to shut down. They’ve got a construction loan now the project’s gotten delayed, they’re paying interest. And who’s going to be responsible from an insurance standpoint? I don’t know. I think Tom, you should talk a little about worker’s comp. I’ll just put it on the, on the next slide.

Tom:
All right. So there, there may be some people here were… Worker’s comp. There’s 50 workers’ comp laws. Every state has their own workers’ compensation law. Different States will interpret a communicable disease different. In Massachusetts, it is almost impossible for somebody to collect workers’ comp due to a communicable disease. Really the, the only places that I’ve ever seen it happen is, is, is if you can prove that first you have to show that the communicable disease is inherently part of your work. And then secondly, you have to be able to prove that you picked up the disease at work. Yeah, this is supposedly such a contagious disease. You could pick it up absolutely anywhere. And even if I’m I’m a nurse working in a, you know, in a COVID, you know, intensive care unit. Mmm. And I, if I’m tested positive that I pick it up there or did I pick it up in the bus on the way home or did I pick it up when I was at the grocery store?

Tom:
Cause there’s 23 people at the grocery store that happened in Massachusetts is very difficult to be able to collect, do you collect on any workers’ compensation issue because of a communicable disease. You go to some of the surrounding States and it’s much easier to get a compensable you know, if you’re, if, if you collect, you know, if you were to get sick and could show was from work, it’s in New Hampshire, it’s much easier to prove it than it is in Massachusetts. So every state has their own rules on that. Mmm. You know, so I think that’s, that’s one of the things, the other thing that I wanted to make sure everybody knew about was that as there’s 50 different workers’ compensation laws there are different people that administer the program in different States and, and there’s one organization, the national council compensation insurance that administers workers’ comp in 37 States.

Tom:
What they have said is if you are part of the PPP program where you’re paying your workers to stay home and they are truly not working, then NCCI has actually come up with a new workers’ compensation classification so that there’s no charge for worker’s comp if you’re paying people to stay home and not work. And it’s important for people to know what’s happening in their state because if you’re paying people not to work, you want to make sure you’re not paying the workers comp rates on those people. I know in some States, you know, the, the rate for residential carpenter could be 25 to 30% of that person’s payroll. That’s a lot of money if you’re saving it to pay these people to be home for two weeks or for two months. So you need to, you need to have a discussion with whoever’s writing your insurance and find out how does, how does the insurance affect the fact that people are home? And not not working.

Andrea:
Tom, you’re saying people can either get refunds or they can get reduced premiums for workers comp insurance while people are at home .

Tom:
If they’re not working. Yeah, it’s okay. All right. So, so first off, they have to be home and not working. If they’re working at home, then it would be the same rate they would always have. But if they’re actually being paid not to work, then there’s a, there should, there there is a reduced charger, no charge for the worker’s compensation and general liability. Again, if they’re not, if they’re being paid not to work, you need to talk to your insurance people and find out how that is being charged. Several insurance companies have said if you’re paying your laborers to stay home and they are not working, there’ll be no charge for those people for general liability.

Andrea:
Go ahead. No, you go ahead. I was going say, so you could save a significant amount of, of money in your insurance premiums while people aren’t working

Seth:
If they are not working.

Andrea:
Correct.

Seth:
That’s interesting to know. We have a few more questions here and I know we try to keep these at about 30 minutes, but we’ve had a lot of information. I know a lot of people have a lot of questions, especially about PPP and how this is all working out and that’s really interesting to know about worker’s compensation. Gerard, who is a general contractor in long Island, he asks if a client cancels and executed a renovation contract with down payment paid, but work has not been started as of yet and the client now wants to cancel the contract either due to loss of job or a pandemic. Is the contractor entitled to his profit without doing any work?

Andrea:
This does depend on state laws. So be careful on if your contract says the deposit is not refundable, then you could theoretically keep the deposit. If the contract says that if either party cancels the contract that they’re entitled in in construction, let me, let me take a step back. I cancel a contract. It depends if the contract has what’s called termination for convenience. That is something that you see in construction contracts quite a bit. So if there’s termination for convenience, that means I can cancel the contract without breaching the contract. In the event of a termination for convenience, it can say a lot of things. It can say I’m entitled to my profit and overhead for the full job. It can say I’m entitled to profit and overhead for the amount of work completed to date. It can say all kinds of things.

Andrea:
Okay? If you don’t have the termination for convenience and the contractor has an argument that they have now breach the contract because I had a contract with you, you said that I could do the work. There’s nothing in the contract that says that I have to stop, that I have to cancel the contract. Have you lost your job? I mean, we don’t need a pandemic for this. There’s case law out there about what happens when someone cancels a contract. So again, this is all about seeing the burden of who’s going to bear the financial cost of this. So as, as contractor, I have to think about whether I would be entitled to the full profit and overhead. It depends what my, what my contract says.

Seth:
Andrea, we’ve got another question, follow-up from Gerard. I think, I mean, it’s, it’s such a practical question here. Can a contractor ask a with an executed renovation contract that in consideration of COVID 19, we need to charge the client’s fees to purchase a PPE, sanitation equipment and hire additional crew to constantly clean and sanitize the job site.

Andrea:
Okay, that’s a fantastic question. And that issue actually came up even in Massachusetts after Katrina, we started putting in our contracts that if there was more than a 10% increase in the price of materials, which happened after Katrina, that we had a right to charge more. So the answer to that question is you can always renegotiate. Okay. It doesn’t mean the other side’s going to agree, they have to agree. But you can always try to renegotiate. And what I have recommended, and I have a couple of blogs people can take a look at that, is try to get the other side to renegotiate and then create a document that you call an addendum. It doesn’t have to be fancy. You don’t have to use legalese that says exactly what George just said. In light of the increased costs, we agreed to pay X amount more. It doesn’t mean they’ll agree you might lose money on that job.

Seth:
Well we do have a number more questions, a number of more questions, but I know I wanted to keep it on the shorter side. Do you have a few more minutes Andrea?

Andrea:
I do. I think Tom does. It sounds like.

Seth:
That last question maybe as a blog article you can write for the expert center. New York also has a three day clause to cancel the contract after signature from the homeowner. How does that, how does that affect things? I mean I know you don’t,

Andrea:
First of all, I mean I have to tell you quickly, unless it would be wasting time, how those three day clauses came about because it’s actually kind of interesting. They came about because of back in the day when we had door to door salesman and they would come and like the fuller brush guy would come with his brooms and sit in your house and the feeling there was a power imbalance and that they were imposing these contracts on you. So you should have a three day right to cancel. Well that three day right to cancel. We have that in Massachusetts too. In fact, I think you’re going to find that in a lot of States. And that’s just like when you get into a mortgage at the beginning of the contract, you know the owner has a three day right to cancel the caveat. And Massachusetts is only if the contract is signed in the homeowner’s home. I, if you sign a contract in your showroom, you don’t have to give them that three day. Right. To cancel doesn’t really have anything to do with the current pandemic, but it’s, it’s, I put in my contracts, there’s a that the contractor will not start working until the three day. Right. To cancel has passed.

Seth:
Okay. I’m going to do one more question because we’re getting flooded. So I’m gonna ask that maybe some of these questions are posted on the expert center afterwards.

Andrea:
Email me.

Seth:
Yeah. Great. Or you know, Dan had asked will it meet the insurance physical damage standard. If property is damaged because it’s vacant, no one is allowed to be on site due to the stay at home order. For example, there was a leak and no one was there to notice it or to address it before it became advanced. If so, and there’s a loss event caused by a force majeure. So in theory the other related costs could be covered.

Andrea:
Great question. I know Tom’s going to answer it but I just want to say something there. In law you have what’s called a duty to mitigate damages. And this is where we go back to the first slide with common sense. If you’ve got a house and you’re halfway through, you need to button up that property before you leave. And I am not aware of any jurisdiction where they said to the construction industry, you’ve got to lay down your tools and leave this minute because of Kobe. Now, now we’ll find out from Tom if your insurance is gonna cover you. If that happens,

Tom:
The policy does have a a vacancy clause in it. Most of them it’s 60 days. And again, vacancy is, is a defined term. If all of the business property is still there, they haven’t moved the chairs, they haven’t moved the tables and, and, and the place is vacant, it’s just not being used. So any parallel, anything that happens that’s physical damage would be covered. And you have a pipe that leaks, you have something that freezes, you’ve got a car that comes through the, through the front window that’s absolutely physical damage and those, those things would be covered. And then you may be able to make the argument that the business interruption the, the fact that I have to be close for 60 days is because of the fire, not because of the the order not to open. And you may be able to make that argument. So

Andrea:
That’s just a quick question for Tom because it’s something I wanted to make sure we covered. Okay. In, in the scenario where an owner sues a contractor for transmission of the virus, is your liability insurance going to come in and defend you if you’re accused of of transmitting the virus to the owner?

Tom:
The most policies today are based on forms that are written by an organization called the insurance services office. And in 2009 the insurance services office wrote an endorsement to the standard liability policy that would exclude any claims that arose out of viruses, bacteria or fungus. That’s something that is not on a lot of policies. We don’t see that endorsement used very often, although I received notification just this morning that one of the national carriers is going to add that to every policy on renewal after July 1st. So you know, although it’s been available since 2009, we don’t see it a lot. It is around on some policies, but I expect to see it on a lot more going forward. Did that answer your question?

Seth:
Yeah, exactly. Well, I just wanted to thank you both and kind of wind down here and say that I’m sorry to Janet and Scott and, and a number of Paul and another, a number of people that we weren’t able to get to their questions. But like I said earlier please post these questions on the expert center. We put it in the chat. These are the kinds of questions we want get the Andrea or Tom or other lawyers opinions to answer them. And of course, I really want to thank Andrea and Tom and their information is up here too. If you’re in the area Andrea, Tom would be the people to contact for legal and insurance needs regarding this. And I think it’s just amazing how topical and how laws are changing and how we’re forced to deal with this entire new event. So again, thanks everyone. Again, my name is Seth Bloom. I’m Senior Director of Attorney Services at Levelset. Check us out on the expert center and Andrea, Tom, we really, really appreciate your time and, and helping our community because that’s what we’re about helping. First. We want our contractors to get as much information as they can so that they can make it through this pandemic. So thank you to everyone and have a great day.