The current COVID-19 pandemic is a monumental event, negatively impacting nearly every aspect of our society. The construction industry certainly is not immune, with many projects nationwide shut down amid government-mandated closures and shelter-in-place orders. However, as states begin the process of reopening, construction is among the sectors allowed to get back to work.

Justifiably, owners, construction managers, general contractors, subcontractors, suppliers and all parties involved in the construction industry are likely to be focused on getting back on track and finishing significantly delayed jobs. But just because workers are back on site, it does not mean the influence of this pandemic has ended, or that anyone can drop their guard.

"Business as usual" will not be quite the same. For at least the coming months—and potentially beyond—many facets of the construction industry will be influenced by COVID-19. Like many crises, though, businesses that adapt to the new normal can emerge stronger. To be among those who thrive, there are some broad lessons construction professionals and their counsel can take from this situation as we move forward.

• Carefully review insurance coverage and options.

For owners or contractors who have suffered damages because of the shutdowns, they may turn to their insurance policies to recoup the costs. However, many businesses are learning a pandemic is not listed in their policy as an enumerated event that triggers coverage. While pandemics arguably fall into the broad definition of "act of God," most policies do not specifically reference pandemics. In fact, they may specifically exclude damages caused by diseases, pestilence and the like from coverage.

Some policies, however, may enumerate a "governmental order" as an event triggering coverage. In the case of COVID-19, even if builders were willing to work, many were not able to do so because of the forced closing of businesses deemed "nonessential" and shelter-in-place orders issued by state or local governments. In Pennsylvania, for example, on March 19 the governor closed all businesses he deemed "non-essential," which included most construction, and enacted a shelter-in-place order. These governmental orders shut down the majority of current construction projects in the commonwealth until early May. If a business has an insurance policy that enumerates a rare event such as a government-mandated shutdown, it may be eligible for coverage. Even then, if a policy lists a governmental order as an event triggering coverage—but excludes disease, pestilence or illness—coverage may not exist.

The takeaway here is that construction professionals and their counsel must be closely inspecting the language of their insurance policies. While it is difficult to predict what is to come, some experts and models project additional waves of COVID-19, so it is possible for there to be future complications from this disease or other similar events. Parties should explore coverage for situations like this as part of their policies of insurance.

While this type of coverage is not commonplace today, we likely will see more of a market for it going forward. It could come at a high cost, though, as payouts by insurers for such claims in the future could be significant.

• Adjust contract language to be specific.

For builders who had projects disrupted by the pandemic, they may look to their contracts to see if they are entitled to additional time or additional payments to complete the work. Sometimes, as with insurance policies, a situation such as this may fall within an enumerated category that allows a change order. However, with the rarity of something like the COVID-19 crisis, that might not be the case.

These categories likely would be included in a force majeure clause—the portion of the contract that lists the extraordinary events that are out of control of contracting parties and releases them from obligations that could not be completed due to the event. The language in these clauses can vary in how broadly it interprets such events, and it may contradict other portions of a contract.

For example, contracts for jobs at schools, retail facilities or restaurants tend to have strict time constraints. If these locations are not open, they will not function as they need to or generate revenue, so the contracts often include liquidated damage provisions; if the job is not complete by a specific date, a monetary penalty may be imposed for each day beyond the deadline. Unless the force majeure clause has specific language for an enumerated event—in this case, a pandemic and/or government-ordered shutdown—that allows for, at minimum, the ability to extend the time for completion of contract, there can be issues that lead to a potential dispute.

If there is a force majeure event, there also may be a timing requirement for giving notice to the owner or project manager. Even in a situation where a government clearly shuts down a project, it is best practice to follow any procedural requirements regarding notice in the contract documents.

• Update safety policies, procedures and training.

 Outside of health care, there may be no industry better trained and equipped from a safety standpoint than construction. Notably, many of the N95 masks provided to other businesses and hospitals came from contractors or subcontractors because the construction industry regularly uses them. Unquestionably, the training and experience of construction professionals will serve the industry well going forward. That said, a novel situation like COVID-19 warrants a fresh look at safety policies and procedures.

In a post-COVID-19 world, parties can expect new safety policies and procedures for workers that may be required by owners, construction managers, insurers, lenders, contractors, subcontractors and suppliers. For example, groups of workers who previously freely interacted with one another on the job site now may be unable to work in close proximity in order to maintain required social distancing. Similarly, those on a project likely will be required to wear personal protective equipment, regularly wash their hands, and adhere to other health and safety measures. Situations such as these could impact efficiency (and costs), so they may be considerations in developing modified project schedules and cost estimates.

To manage these factors, it is primarily up to project stakeholders and their counsel to remain knowledgeable of local, state and federal regulations in the weeks and months to come, updating policies and procedures to account for these requirements.

Accordingly, employee training must be a priority. Safety experts or managers will need to keep employees apprised of new and evolving regulations in the post-COVID-19 environment through regular meetings, training events, handouts, signage and the like. Proper training yields a more knowledgeable workforce which, in turn, reduces risk across the board for everyone on the project.

Fortunately, the construction industry historically has demonstrated its ability to adapt to new and potentially hazardous conditions. It is almost a prerequisite for those who work in this field. In this new normal, working with trusted counsel will be instrumental in guiding project stakeholders through a truly unprecedented situation.

Joshua Lorenz is a partner at Pittsburgh-based law firm Meyer, Unkovic & Scott and is co-chair of the construction group. He focuses his practice on construction law and litigation, real estate law and litigation, business and commercial litigation, and tort defense litigation. Contact him at [email protected].