MARKHAM, ONT. — The Construction Record presents the first edition of a three-part podcast series covering surety, insurance and contract issues in the construction sector today (April 30).
Daily Commercial News and Journal of Commerce digital media editor Warren Frey chats with Krista Chaytor, partner at WeirFoulds; Jamie Collum, VP of construction practice at FCA Insurance; and Malik Zulqernain, founder of SmartBuild Construction Solutions.
Chaytor started the podcast by noting that the arrival of the CCDC 2020 to replace CCDC 2008 is very timely.
“I think in large part what started the idea that there needs to be some changes to the CCDC was the prompt payment legislation that was introduced in Ontario, and the (existing) document didn’t address that prompt payment legislation at all. So that had to get dealt with as one issue.”
In Ontario, she said, ready-for-takeover and the confusion with substantial performance was worth taking a look at as well.
“And then there’s always little things that bother certain groups, little things that always get changed every time,” said Chaytor. “There are supplementary conditions and something always gets changed, it’s probably something that the CCDC committee should take a look at and make a few changes. So you see some of those throughout the new document as well.”
Zulqernain argued that from the contractor’s perspective, it’s always good to re-evaluate and update the documents they are all signing.
“Let’s talk about balanced contracts,” he said, “they’ve actually made it a touch more unbalanced. And given the fact that most clients can continue to write amendments to every CCDC contract, quite honestly, these are just templates for people to take a look at and hack out of, and add in as they see fit.”
Later, addressing the ready-for-takeover reforms, Zulqernain said CCDC 2020 added a whole new layer of complexity to the substantial performance rules.
“It was already complicated to understand for most small and medium enterprises, and they’ve decided to say, ‘hey, let’s add some more to the list to check off,’ and you know you’re giving an outlet for the consultant or the owner to say, ‘hey, it’s not ready for takeover because this is not checked off.’ ”
It all adds up to a bigger grey area, he said.
Collum said from his perspective, insurance has not been updated since 2008 so it certainly was due for an update. The changes will affect people across all spectrums of the industry, he said.
Collum noted there are quite a few increased insurance coverage requirements and new coverages as well.
“They’ve added in a few new coverages, such as new contract pollution coverage, and a new drone coverage as well. Drones are going to be used on site. Overall I think these are OK for the industry.”
But there are certain problems, Collum said.
“First off, the insurance market is in a really hard place, which just means that capacity is limited and cost rates are increasing and it’s been this way for a couple of years now and we’re at least facing another year or two of this.
“Contractors are already facing increased costs for all of their insurance coverages. By doubling limits and adding in new coverages we’re just forcing contractors to take on a higher burden, higher increased insurance costs, which is what’s challenging for all them.”