CLOSE X
RSS Feed LinkedIn Instagram Twitter Facebook
Search:
FMG Law Blog Line

Posts Tagged ‘subcontractors’

Cyberrisks to Contractors and Securing Proper Coverage

Posted on: June 29th, 2018

By: Barry Brownstein

Increasingly sophisticated hackers have targeted personal and business data held by companies like Target Corp., Sony Corp., Equifax Inc. and Yahoo Inc. during the past decade. The construction industry is just as susceptible to these risks as any other industry.  As construction projects increase in size and there is more sharing of data related to buildings and projects, and as more of that sharing becomes electronic, cyberrisks increase as well.

Contractors and their business partners hold personal information about their clients and employees, and they are increasingly using more electronic means to exchange data and survey construction projects. A significant threat for companies in the construction industry comes from the open and increasingly connected network between those in charge of a project and their various subcontractors and business partners, who need swift and seamless access to plans and other sensitive data to do their part of the work.

Many companies in the construction industry assume that since they have policies that cover losses stemming from physical and property damage, any infiltration into their systems that result in the loss of access to sensitive information is covered by such insurance.  However, most commercial general liability policies carve out cyberthreats from coverage.  While contractors can still make claims under more traditional policies and may find that some of their losses are covered, relying solely on these protections may be dangerous and result in uncovered losses.

Specialized cyberinsurance can fill in the gaps left by commercial general liability policies that do not account for losses caused by damage to virtual information systems, and ensure that any damages, injuries or delay caused by downstream contractors or business partners are covered as well. Once policies are in place, contractors need to revisit them regularly to account for changes in the cyberthreat landscape as they relate to the construction industry.

If you have any questions or would like more information, please contact Barry Brownstein at [email protected].

Contractors are Under Greater Scrutiny for Compliance with Davis Bacon Requirements

Posted on: July 9th, 2013

By: Kamy Molavi

 

Recently, we at FMG’s construction law group have seen several cases involving the Davis Bacon Act.  Davis Bacon is the federal law that requires all workers to be paid the “prevailing wages” on federal contracts.  The law also applies to a non-federal contract if the project is at least partially paid for from certain federal funds.

Our clients in the recent cases are either general contractors or subcontractors.  The Department of Labor claimed our clients’ first-tier or second tier subcontractors had failed to pay the prevailing wages, and sought to collect the shortfall from our clients even though the unpaid or underpaid workers were not employees of the clients.

This indirect liability is not new.  What seems to be new is the prevalence of DOL investigations in the past two years.  Some attribute the recent focus to the political climate, and others blame unions for instigating the investigations.  We do not know what is causing the recent investigative vigilance, but the trend is undeniable.

If the Davis Bacon Act applies, contractors and subcontractors cannot rely on certified payrolls from downstream employers.  They should take steps to understand the wage requirements of their projects, especially the classification of workers needed on the job, and the proper rate for each classification.  It is also prudent to make sure all employers on the project maintain good time records, and to the extent feasible, also to monitor payments to all workers.