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Claims Administration
Claims are contested items in a project. This is when a buyer and a seller or perhaps someone delivering a project and someone receiving a project – where they cannot agree, they can’t reach an agreement on compensation for the change or can’t agree that a change has occurred. This might be where we said we were going to deliver “X” and when we’re delivering that business value or that project to our customer or to the organization (or whoever is receiving the benefit of that project) then they say it’s not actually what we wanted. If they can’t agree or we can’t fix it then a claim is raised and we go through the claims administration process.
Claim Prevention
Of course it’s best to prevent that from happening in the first place. Proactive claim management involves claim prevention. This is during the initial concept or design phases before a contract is signed. Can we get all of those requirements, and make sure that they are absolutely correct, from our customer? Can we make sure they are happy upfront, and that will reduce that possibility of a claim happening in the future.
Claim Mitigation
Another step is claim mitigation. During the contract preparation and pre-contract negotiation we can write these things into the contract – that they have absolutely agreed to “X” or if this happens then we’re not going to be liable for that.
Of course claims are pursued during the project execution and usually before or at delivery of the project.
Claim Resolution
Lastly claim resolution – this is settlement of outstanding issues, after completion and finalization of accounts. Once everything is agreed and we’ve gone through the claims process and all of that is finalized as part of the finalization of the project as well, if the parties themselves do not resolve a claim then it may have to be handled in accordance with alternative dispute resolution, also known as ADR, typically following the procedures established within the contract itself. This is a third party that can mediate this discussion, or the claim occurring and help everyone come to an agreement.
And that is claims administration in your project.
– David McLachlan