By: Lane F. Kelman and Jennifer R. Budd
Cohen Seglias hopes that you, your friends and family made it through Hurricane Sandy unharmed and without great loss. This storm caused billions of dollars of damage up and down the Northeast Corridor and will have widespread implications. Understanding the different interests and factors at play is paramount to protecting further loss.
As we begin cleaning up and rebuilding, action to protect your business interests to the fullest extent possible and to mitigate loss is essential. The following are some legal considerations which may prevent you from incurring any additional harm from the storm.
- Before cleaning up, document all damage with pictures and preserve all business records.
- Follow all notice provisions required by your insurance carriers for any potential claims, including claims for damage to your property, business interruption, and any tort liability to others. Also, property damage caused by a flood is generally not covered by a typical homeowners or commercial property policy, so a separate notification will be required under a flood insurance policy, if you have such a policy.
- A storm like this should be considered an “Act of God” which will relieve performance or allow for delayed performance on a contract under the doctrine of impracticability.
- A force majeure clause in a contract is generally enforced by courts and can be an essential tool for a party who cannot perform, or whose performance is delayed due to Hurricane Sandy. It is important to review any such provisions in your contracts, follow any notice requirements, and implement these provisions as soon as possible.
- Documentation of delays such as material or labor shortages, extra or repair work or resequencing is crucial.
- If a party you contracted with is unable to perform due to the hurricane, you are under an obligation to reasonably mitigate your damages.
- When your business is affected by a natural disaster such as hurricane Sandy, managing compensation, payroll and leave issues can be challenging. Review any employment contracts and if you have a question regarding these challenges, the Labor and Employment Practice group at Cohen Seglias is well equipped to navigate you through any issues.
- Complete any reporting requirements to State and Federal agencies for spills or leaks of hazardous materials.
- Check OSHA requirements and suggestions for applicable clean-up operations.
- Before commencing any rebuilding or renovation projects, check with local governments for permitting requirements.
- Government funding has been authorized for the recovery in many states and may be available to assist you in your clean-up and rebuilding efforts. Also, the Department of Labor offers grants to States for dislocated workers, which if given to your State, could be very helpful to your employees if your business operations are severely affected. Be sure to monitor the application process for these funds and make any deadlines.
It is impossible to predict how hurricane Sandy may impact your business; however the attorneys at Cohen Seglias are happy to discuss any issues that arise to assist you in minimizing or recovering your loss due to this awful event.
Lane F. Kelman is a Partner with the Firm and a member of the Construction Group. He represents developers, general contractors, construction managers and the different trades in complex matters ranging from bid protests, contract negotiations and claim prevention & management.
Jennifer R. Budd is an Associate with the Firm and a member of the Construction Group.