As a contractor, you have a lot of paperwork to deal with – from signed contracts to shop drawings and audit reports. Keeping track of everything, especially on a complex project, can seem cumbersome and time-consuming.

But it shouldn’t be an afterthought. That’s because some losses and liabilities have nothing to do with a contractor’s negligence on a project, but rather arise from their inability to provide details of the work performed.

We outline why having detailed documentation as a contractor is so important, as well as some tips on what paperwork to keep track of and the proper documentation procedures.

Following the paper trail

Lawsuits can arise when a customer claims the contractor didn’t complete the work as agreed or that negligence resulted in property damage. For example, if a customer claims that a material or design defect caused property damage, that could lead to a costly lawsuit.

If you can’t find documentation of materials you purchased or suppliers you hired — or can’t verify work performed by subcontractors — then you could be held liable, simply because you can’t back up your claims. Contractors can be held liable many years after project completion, so you’ll need to keep those documents indefinitely.

Documentation and procedures

Contracting work involves a lot of paperwork. But if you create documentation procedures at the start of each project, maintaining proper documentation becomes a lot less difficult — and ensures you have a paper trail if your work is ever called into question. This could be as simple as creating a construction file or as sophisticated as rolling out a cloud-based construction management solution.

As a contractor, it’s your responsibility to document work performed and materials used on a project. You should also save all correspondence with the owner, architects, engineers, and sub-trades involved in the project. Other types of documentation you should obtain, maintain, and keep readily accessible for review or audit include:

  • Project tenders/estimates
  • Contracts or work orders
  • Duty to perform documents
  • Site inspection forms
  • Tests on work completed
  • Documentation for materials delivered to the site
  • Documentation of your risk services assessment
  • Equipment service and maintenance records
  • Certificates of insurance from your subcontractors

While it’s important to create documentation procedures, it’s just as important to ensure all managers, supervisors, forepersons, and workers understand and abide by those procedures. A best practice is to host a workshop on documentation retention procedures and have employees sign a document confirming that they understand their responsibilities.

Understanding your role

Different employees — from project managers to architects to engineers — are responsible for different types of contracts and documentation.

For example, if you’re the owner of a contracting company, you define the scope, budget, and timeline of the project, and are responsible for ensuring that all designs meet applicable codes, regulations, and standards. If you’re a general contractor, you oversee construction from start to finish, apply for all necessary licenses and building permits, provide on-site guidance and supervision, and hire and train subcontractors.

It’s important that employees understand their role in a project and their responsibilities for documentation, especially when working in coordination with different parties (such as subcontractors).

A helpful resource is the Canadian Construction Documents Committee (CCDC), which offers several types of contract forms based on industry standards to ensure fairness for all parties involved in a construction project. The committee even includes a lawyer from the Canadian Bar Association (Construction Law Section), who sits as an ex-officio member.

Contractor due diligence

It’s your responsibility as a contractor to determine which documents and contracts you need for your specific operations. Ensuring that you obtain and maintain proper documentation can help to minimize the risk of future litigation — and prove your case if you’re wrongfully accused of negligence.

Be sure to read documentation from front to back. This is essential for two reasons: guaranteeing everything is in order and ensuring that you understand your responsibilities so that you can properly fulfill and document their completion. It might be beneficial to maintain a construction file. This file would contain inspection reports and checklists which list all of your duties outlined in the contract, as well as some additional best practices.

Protect yourself and your contracting business

While having a proper documentation plan in place is vital, it’s important to be prepared should something go wrong.  That’s when having the right protection in place comes in handy. Appropriate coverage is extremely important and beneficial. To learn more about protecting yourself and your business, visit our contracting insurance page today.


This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.