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Florida Frye Standard Reaffirmed

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SHIFT THE RISK AND BURDEN OF ESCALATING MATERIAL COST TO OWNERS

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CONTRACTORS SHIFT THE RISK AND BURDEN OF ESCALATING MATERIAL COST TO OWNERS

The cost of work involving installation of materials made from concrete, steel, drywall, flooring, etc., fluctuates. Material costs can creep up slowly or increase rapidly. Rapid escalation of construction materials can make it difficult for contractors to provide accurate and competitive lump sum/fixed priced bids.

Contractors sometimes have a built-in cushion within its bids for potential increases in material costs. However, predicting the fluctuation of material costs isn’t easy and your bid may not be competitive with other bidders.

Obviously, the contractor’s profits decrease if the cost of the materials go up between the time the lump sum contract is signed and the time the work commences [which can sometimes be many months later].

Unless you SHIFT THE RISK AND BURDEN OF MATERIAL ESCALATION COSTS TO THE OWNER

Your contract agreements must have a provision shifting the risk and burden of material escalat…

ASSIGNMENT OF BENEFITS

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ASSIGNMENT OF BENEFITS
Assignment of Benefits is a commonly used tool by water, fire/smoke restoration and resolution contractors.Assignments of Benefits is typically a written contract proposal form for the restoration contractor and has become the standard method for guaranteeing payment by the homeowner’s insurance carrier. Assignment of post-loss benefits have been recognized in Florida since 1917, as set forth in the Florida Supreme Court’s decision in West Florida Grocery Co. v. Teutonia Fire Ins. Co., 77 So. 209 (Fla. 1917). Florida’s Second District Court of Appeal recently upheld the ability of a policyholder insured to make multiple assignments under a homeowner’s insurance policy.  Nicon Construction v. Homeowners Choice Property and Casualty Insurance Company cite involved a policyholder’s issuing assignments of benefits to separate restoration and reconstruction vendors.  The insurer argued that upon the policyholder’s assigning the policy rights to the first restoration ve…

DIFFERING COVERAGES AND EXCLUSIONS OF YOUR GCL POLICY, EXCESS POLICY AND UMBRELLA POLICY

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