How Change Orders Impact Construction Timelines

How Change Orders Impact Anticipated Completion Date

Watch now

2 min

Hi there! Agents often ask me how this video magic happens. I guess the allure of my Hollywood creations has really sparked some curiosity.

Who could blame ‘em? After crafting a perfectly flawless script and production plan, we stroll into the studio and boom, it's done in a flash.

Well, that is a big old lie. Let me tell you what really happens.

That flawless plan ... it goes through many variations, and what should take ten minutes of filming can stretch into an hour. And that's after we've tweaked the script, got the talent ready, and then our production crew set up their work of art.

If you think about it, it's just like construction projects.

Imagine your client is building a $500,000 structure and it’s an 11-month timeline. The next thing you know, they’re contacting you about a $70,000 change order.

The fact that they actually contacted you is a win in itself. There are two factors at play. Total completed value and anticipated completion date. Change orders often increase the total completed value, requiring the policy to be endorsed for the higher project value.

But here's the kicker. Many change orders also lengthen construction timelines.

If this is true for your client,it's important to notify underwriting. Especially if the policy has time-related coverages, such as soft cost and business income. These coverages are triggered by anticipated completion date.

Underwriting will insure the existing policy is documented in case the account requires an extension or a renewal. Or, more importantly. if a claim occurs and time-related coverages need to be triggered.

So here's the lesson: always anticipate that change orders will extend the anticipated completion date, just like I anticipate the production crew's 10-minute timeline will actually take ten times longer.

But, hey, at least I nail it on the first take every time.

'Til next time.

This is intended as a general description of certain types of insurance and services available to qualified customers. Any description of policy provisions is meant to give a broad overview of coverages and does not revise or amend a policy. Refer to the policy coverage form for a complete representation of the scope of coverage, terms, conditions, exclusions and more. The policy is the contract that specifically and fully describes your coverage. Some products may not be available in all states and may only be offered on a non-admitted basis. Product availability is subject to change.