The Ideal Investigation

Proper claims and litigation management after a construction site accident

June 26, 2024 Photo

Successful litigation rests on the cornerstone of effective investigation, a process demanding meticulous detail, sharp focus, and timely collaborative teamwork. This article navigates through the significant aspects of investigating claims, the implications associated with conducting or neglecting thorough investigations, and the necessity of this process for general contractors or construction managers.

This article presents a multitude of investigative strategies, each examined for its advantages and shortcomings. We delve into the pivotal role of preserving critical evidence and the optimum techniques for delivering this information.

Emphasizing proactive planning, we stress the importance of having a structured plan with a primed team and allocated responsibilities in place before any incident occurs. In addition to providing key insights into a successful investigation—on choosing appropriate experts, collecting essential documents and statements, and creating comprehensive reports—we detail what goes into accident reports and elaborate on the cruciality of thorough claims investigation even for seemingly minor incidents.

Importance of Investigating Claims

A claims investigation plays a pivotal role in the legal defense of a claim. First, it aids in collecting and preserving critical evidence and facts that either prove or disprove the allegations of the claim. A thorough investigation can uncover potential inconsistencies, exaggerations, or even fraudulent activities that might significantly influence legal proceedings. Furthermore, it helps identify other potential involved parties, further defining the level of obligation or liability attached to each. This process assures that accurate information is presented to legal counsel, enabling them to build a solid defense strategy. Early investigation keeps defense costs in check by improving negotiation leverage and speeding up the settlement process. The collected data also assists in identifying opportunities for viable risk transfer. Overall, the claims investigation forms an integral part of the claims resolution lifecycle, directly affecting claim reserves, litigation strategies, cost control, and indemnity payments.

Impact of Investigation

A meticulously conducted claims investigation plays a key role in determining the duration, direction, and resolution of an insurance claim. Effective fact finding serves multiple objectives: It ascertains liability, assesses extent of damage, and verifies the claim’s legitimacy; it equips the insured, the insurer, and defense counsel with the vital data required for a fair claim resolution and helps direct potential litigation in the future; and it can unearth additional potential parties and fraudulent or overstated claims, mitigating unnecessary financial payout.

Conversely, the lack of a thorough investigation can have serious ramifications. It may lead to lengthy litigation, unjust payouts, increased premiums, and legal complications. Investigating improperly can lead to missing critical facts, resulting in payment on exaggerated, inflated, or fraudulent claims. It may also miss opportunities for subrogation or risk transfer. Such a shortfall inhibits strategic decision-making, escalates claim expenses, increases potential for litigation, and potentially damages the insured’s or insurer’s reputation. Thus, a proper claims investigation is vital for fair, efficient, and cost-effective claims and litigation management.

Importance to General Contractors

Contractors must grasp the causes of workplace accidents, explore preventative measures, and streamline accident reporting and communication to avert future losses and leverage risk transfer opportunities. A poorly conducted investigation may result in devastating multi-million-dollar verdicts or unfavorable settlements. High-priced jury awards or settlements can drain profitability, adversely influence loss history, and affect future insurance rates or retentions.

First, before a construction site accident occurs, it is essential to have a prepared team, delegated responsibilities, and a well-structured incident reporting plan in place. This provides transparency, task ownership, and streamlined communication throughout the job site. Communicating about incidents is integral to bolstering a safety-focused culture, and discussing how incidents, their causes, and corrective action can help prevent future occurrences.

It is critical for a construction site’s general contractor to conduct proper claim investigations for several key reasons. It aids in verifying the legitimacy of a claim, thereby averting potential expenses linked to fake or inflated claims. Investigations also help identify the party responsible for the incident—knowledge that could protect the contractors from unwarranted liability and financial setbacks if they are not at fault. If contractors are held accountable, a comprehensive investigation gives clarity on the extent of their liability. Furthermore, it can reveal potential shortcomings in site safety measures, informing improvements and promoting safer protocols.

While communication is essential, a common dilemma arises: How can we maintain a culture of communication while also protecting against potential future liabilities in case a lawsuit emerges? At times, consistent communication may jeopardize the confidentiality of information. Insight gained from incident reports that include root cause analyses could potentially disclose the contractor’s liability.

One approach could be implementing a two-step reporting process. The initial report should be a concise incident summary from the field team, incorporating facts and photographs. This serves as a record for communication and prevention purposes. The report should stick strictly to the facts and avoid any form of personal commentary or opinion. The subsequent incident report (or root cause analysis report) can delve into a more comprehensive detail of the event’s occurrence and can form the basis for updating the contractor’s site safety protocols and procedures.

In some states, a workers’ compensation claim investigation may be protected from discovery in a third-party liability lawsuit. However, this largely depends on the specific laws and regulations of the jurisdiction where the claim arose. This could serve as an alternative approach.

Conducting a Proper Investigation

First and foremost, do not make a bad situation worse. Make sure the injured worker gets the appropriate treatment. Once clearance is obtained and the emergency is abated, the investigation scene should be vacated, protected, and photographed. Barricade and, if possible, assign an employee to protect the area to avoid any manipulation of the scene. All evidence should be taken out of service, tagged, and preserved. Photograph and make written records of the incident events.

If possible, obtain signed, audio, or video statements from witnesses, the foreman, and the injured worker. Stories often change over time as memories fade. Essential project documents detailing the worker’s tasks, the instructions provided, and the equipment directed for use should be secured. Also seek to secure all safety equipment, receipts, and previous usage information of that equipment. You will also need all documentation confirming that the equipment was free of defects, as well as prior maintenance records and information about the equipment’s storage.

Photographs should include the alleged site conditions and equipment used, specifically illustrating how it was operated or used and any available equipment that was not used. If there are additional tools or objects relevant to the case, their photographic evidence should be collected. However, avoid taking photos displaying hazardous conditions, blood, or severe injuries.

Statements gathered during the claim investigation should provide a detailed description of the incident covering who was involved, what happened, how it happened, where it took place, and why it occurred, supported by photos. The presence or absence of eyewitnesses and details of any previous instructions or training given to the worker should also be recorded. Ensure that any favorably highlighting facts, such as the absence of any preceding complaints, are also confirmed and documented.

Documentation of the provided protection measures, preferably with photographic proof, should be included. Attention should be given to the claimed injuries, considering any previous injuries related to the worker.

In cases of serious injuries, complex fact patterns, or potential equipment defects or incorrect operation, it is advisable to hire an expert to conduct an onsite investigation before resuming construction. Utilizing an expert under these circumstances ensures all crucial details are identified and correctly analyzed for a comprehensive and accurate investigation.

Claims Investigation Options

There are four main types of claim investigations: field investigation, desk investigation, third-party investigation, and attorney-led third-party investigation, each offering unique benefits and potential disadvantages. 

Field investigation

Advantages: Field investigations are cost-effective and can be completed immediately. Also, job site employees may be more comfortable with general contractors, or construction manager’s staff, who are already familiar to them.

Disadvantages: Field investigations may be the most inconsistent option, potentially overlooking critical information, and there could be bias due to connections with the workplace or fear of potential reprisals. Additionally, those conducting the investigation may lack skills and training to complete proper data collection and interviews. The biggest disadvantage of a field investigation is it may not be privileged.

Desk investigation

Advantages: This type of investigation is cost-effective and can be conducted promptly. It involves scrutinizing documents, reports, and other relevant records, which provides substantial information on a variety of claims, especially straightforward ones. Desk investigations also continue to be conducted even after the construction site has resumed its regular operations.

Disadvantages: Desk investigations are limited to the available documents and do not provide an opportunity for an onsite inspection or face-to-face interviews, making it hard to assess all facets of more complex or contentious claims.


Third-party investigation

Advantages: By utilizing third-party services, businesses can benefit from specialized skillsets. Their experience in handling a wide range of investigations often equips them with the resources to execute a thorough inquiry. Third-party investigators are helpful in collecting detailed data and conducting comprehensive interviews. Comfortable with asking hard-hitting questions, they bring an unbiased perspective and can often manage experienced witnesses effectively. Ensuring consistent quality in reporting and photography, they contribute to maintaining a high standard across documentation. Furthermore, by enlisting a third party, there might be an increased likelihood to preserve legal privileges due to their position as independent entities outside the company involved.

Disadvantages: Trusting a third-party investigation can pose issues of quality control and may lead to communication challenges. It can also be costly and could lead to less control over the timeline.

Attorney-led third-party investigation

Advantages: In addition to the benefits of a third-party investigation, when an attorney leads an investigation, they can use their expertise in legal matters to focus on points that could become significant in creating an affirmative defense. They may also ensure that the investigation process complies with the law and preserves any potential for legal privilege.

Disadvantages: This type of investigation might be the costliest and could result in less control over the timeline.

Choosing the Best Option

The decision concerning which type of claims investigation to undertake usually requires evaluation on a case-by-case basis. Instances involving substantial property damage or serious injuries naturally warrant a more comprehensive investigation. High-profile incidents or those that attract media attention typically require thorough due diligence. In specific jurisdictions, such as New York with its Scaffold Law, the nature of injury might determine the extent of the investigation. Where the incident raises suspicion or is not reported promptly, opting for a full investigation may be a wise decision, but not possible given the time that passed. Hence, the context, severity, and characteristics of each individual case play a significant role in shaping the investigation approach.

Never undervalue the significance of a proper post-accident investigation, even in cases that may initially seem minor. Adhere to the correct incident investigation procedures and assure comprehensive completion. To successfully mitigate claim exposure, it is imperative to conduct an exhaustive investigation immediately after an accident, as it provides an excellent opportunity for earlier settlement or resolution.

About The Authors
Hillary D. Price

Hillary D. Price, CPCU, ARM, CRIS, CFP, is manager of claims advocacy at Construction Risk Partners.

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