Critical Legal and Insurance Insights for 2025 Construction Industry Risks
The 2025 Construction Conference provided insights for construction business owners on mitigating risks and enhancing competitiveness through understanding evolving legal and insurance landscapes. Key topics included employment law updates, such as the ongoing validity and enforceability of noncompete and nonsolicitation agreements, with emphasis on reviewing such contracts regularly with legal counsel due to changing regulations.
Overtime exemption rules have reverted to previous salary thresholds ($684/week) and duties tests, highlighting the complexity in employee classification for exemption purposes. Employers are advised to monitor potential future changes under the current administration to maintain compliance. Independent contractor classification remains a critical compliance issue due to risks of misclassification penalties, focusing on the degree of employer control and worker relationship specifics. The National Labor Relations Board's operational shifts signal regulatory environment changes, particularly with a change in General Counsel under the new administration affecting labor policy enforcement. OSHA's proposed heat-related illness prevention rule aims to require employers to provide access to frequent breaks and water once heat indices exceed certain thresholds, mandating a Heat Injury and Illness Prevention Plan with exceptions for specific worker categories; this rule carries significant implications for construction operations in hotter climates. Additionally, Executive Order 14173 mandates federal contractors to eliminate discriminatory hiring policies based on protected classes but permits fostering inclusive workplace practices within legal limits.
Litigation strategies include the North Carolina Notice of Contract mechanism, supporting general contractors by requiring timely public filing to prevent subcontractor liens, thus reducing project lien risk through procedural compliance. Commercial general liability (CGL) insurance coverage in construction was clarified, highlighting limitations and exclusions such as non-coverage for faulty workmanship, pay disputes, intentional acts, and licensing complaints. Distinctions between specific peril and all-risk insurance were discussed, underscoring the need for tailored policies aligned with contractor risk profiles and thorough insurance agent consultations.
Risk management practices recommended involve securing additional insured status on subcontractors' policies and enforcing indemnification clauses to shift potential liabilities from general contractors. The session reinforced the importance of proactive legal and insurance strategy integration in managing construction-related exposures and regulatory compliance for business continuity and financial protection.