CEO Executive AssistantConstruction claims are an unfortunate reality of the industry. Differing site conditions, design deficiencies, owner-caused delays, scope disputes, and force majeure events generate claims on a regular basis. How a construction company manages claims, both asserting them and defending against them, significantly affects its financial performance and legal exposure.
For construction CEOs, claims management presents a specific delegation challenge: the stakes are high, the decisions have legal consequences, and the CEO’s instinct is to stay closely involved. Building a structured claims management delegation system protects the company more reliably than CEO-dependent management.
The Claims Management Function
Construction claims management encompasses:
- Early identification of potential claim events
- Contemporaneous documentation of claim-related events and costs
- Notice requirements compliance
- Claim quantification and preparation
- Negotiation with the owner or opposing party
- Escalation to dispute resolution processes (mediation, arbitration, litigation)
- Defense against claims asserted by others
- Claim resolution and documentation
- Lessons learned integration into future projects
Each of these can be managed by qualified personnel with the CEO involved only at the strategic decision level.
The Claims Management Structure
- VP of Operations or Project Executive: owns project-level claims strategy and owner communication on significant claims
- Project Manager: owns day-to-day claim documentation and routine claim assertion on their projects
- Contracts Administrator or Claims Manager: supports claim documentation, quantification, and formal submission processes
- Outside Counsel: advises on legal strategy, manages litigation or arbitration when claims escalate
- CFO: manages the financial impact of claims on project profitability and company financial statements
- CEO: approves claims strategy on major claims, makes settlement decisions, manages strategic client relationships during disputes
What to Delegate in Claims Management
Daily Documentation
The most important claims management activity is contemporaneous documentation: daily reports, photos, weather logs, notices of delay, and cost impact records. This is a Superintendent and PM function that must happen every day on every project. The CEO does not write daily reports.
Notice Submissions
Contract notice requirements (notification of potential claims, reservation of rights letters) must be submitted on time per the contract. The PM and Contracts Administrator own this function. Late notices can forfeit valid claims; this is a high-stakes administrative function.
Claim Quantification
When a claim event has been documented, quantifying the cost and schedule impact is a technical task performed by the PM, project accountant, and Contracts Administrator. The Project Executive reviews the quantification before submission.
Initial Claim Submissions
The formal submission of a claim to the owner, with supporting documentation, is prepared by the Contracts Administrator and reviewed by the Project Executive. CEOs do not write claim submissions on routine matters.
Negotiation of Routine Claims
For claims below a defined value threshold, the Project Executive leads the negotiation with the owner’s project team. CEOs are not involved in routine claim negotiations.
Subcontractor Claim Management
When subcontractors assert claims against the company, the PM and Project Executive manage the evaluation and response. CEOs are involved only when subcontractor claims involve significant financial exposure or potential litigation.
What CEOs Should Keep
Major Claim Strategy
When a claim involves significant financial exposure (defined by a dollar threshold), the CEO should be involved in the decision about how to pursue the claim: how aggressively, through what channels, and what settlement range to accept.
Settlement Decisions
Final settlement decisions on major claims should involve the CEO. These decisions have financial implications for the company and may affect ongoing client relationships.
Client Relationship Management During Disputes
When a claim creates friction with a strategic client, the CEO may need to engage at the executive level to manage the relationship while the legal and commercial dispute proceeds through normal channels.
Decision to Pursue Litigation or Arbitration
Committing to a dispute resolution process (mediation, arbitration, litigation) involves significant cost and management attention. This decision belongs with the CEO, informed by outside counsel’s analysis.
Building the Claims Management Delegation System
Build a Claim Documentation Culture
The foundation of effective claims management is systematic daily documentation. Every superintendent and PM should understand why contemporaneous documentation matters and how to do it effectively. This is not optional; it is the company’s financial protection on every project.
Create a Contract Compliance Calendar
For each project, create a calendar of critical contract compliance dates: notice periods, submission deadlines, monthly reporting requirements. This calendar is maintained by the Contracts Administrator and reviewed by the PM.
Develop Standard Claim Submission Templates
Standard claim submission formats (cover letter, chronology, cost exhibit, schedule impact analysis) make claim preparation faster and more consistent. When the Contracts Administrator has templates, claim submissions do not require starting from scratch.
Establish a Claim Escalation Framework
Define when a potential claim escalates from routine project management to a claim requiring formal management attention: for example, any event with a potential cost impact over $50,000, any situation involving potential litigation, any claim where the owner has disputed the company’s position in writing.
Maintain Relationships with Construction Counsel
Develop ongoing relationships with construction law specialists before disputes arise. When claims escalate, having established relationships with experienced construction counsel reduces response time and improves strategy quality.
Conduct Claim Lessons Learned
After major claims are resolved, conduct lessons learned reviews: What events led to the claim? Could better documentation have strengthened the position? What contract terms created risk? This learning improves future project performance and claim management.
For more on construction executive delegation, see construction CEO delegation and the construction delegation guide.
Conclusion
Claims management delegation requires building documentation culture at the field level, systematic contract compliance management, qualified support in the Contracts Administrator role, and defined escalation criteria for when CEO strategic involvement is warranted. When this system is in place, the company’s claims are better documented, better managed, and more likely to result in favorable outcomes, without CEO involvement in the daily documentation and routine negotiations that are the foundation of effective claims management.
Related Reading
For further context, explore Delegation Guide for Affordable Housing Nonprofit CEOs and Delegation Guide for Automotive CEO: Brand Management.