A recent Engineering News Record had an interesting article discussing recovery risks after surviving the recession. The article, by Richard Korman, raised an interesting point of contractors taking on too much work at the backend of a recession without the necessary infrastructures in place.

Not surprisingly, one of the main difficulties in emerging from a recession is that contractors are short on cash and qualified personnel. So, when a contractor is awarded a number of new projects, it may not have enough cash on hand to fund the project or experienced employees to run the project. Either a lack of funding or lack of experience on the jobsite can lead to shortcuts which can then lead to construction claims. Or worse yet, the contractor simply does not have enough resources to finish the project.

Surety companies have seen this cycle before. And, they are expecting more problems, and thus more claims, because so many companies were weakened during the recession and do not have the infrastructure to move forward as aggressively as they had before the recession.

So, are you prepared to emerge from this recession?