Change Order
A documented modification to the original construction contract that adjusts scope, timeline, or cost. Used when project conditions change during construction and require changes to what was originally agreed.
A change order is a documented modification to the original construction contract that adjusts scope, schedule, or cost. It is the mechanism by which a project evolves during construction without creating disputes later.
Why Change Orders Exist
Projects never unfold exactly as originally planned. Conditions hidden behind walls are revealed during demolition. Owners change their minds about finishes or layouts. Code requirements surface that were not anticipated. Supply chain issues force material substitutions. Every one of these can modify scope, timeline, or price from the original contract. Change orders formalize the modifications in writing and keep everyone aligned on what is actually being built.
What Goes in a Change Order
A good change order identifies the change being made, the reason for the change, the revised scope or price, the revised schedule if affected, and the signatures of the authorized parties. Both the owner and the contractor sign before the change takes effect. The change order becomes a binding amendment to the contract.
Change Orders and Insurance Claims
When changes arise from discoveries related to the original loss, they often require both a change order (with the owner) and a supplement (with the carrier) to cover the added work. When changes are owner-requested upgrades beyond the claim scope, the owner pays out of pocket. Clean documentation separates which changes are insurance-funded and which are owner-funded, which matters both during the project and at final closeout.
Frequently asked questions
Whenever the project scope, schedule, or price changes from the original contract. Discoveries during construction (hidden damage, code issues), owner-requested changes, or unexpected conditions typically trigger a change order. Handling these changes through formal documentation prevents disputes later.
Depends on the cause. Owner-requested changes are paid by the owner. Changes required by discoveries during construction may be covered by the insurance claim as a supplement, or by the owner if outside the claim scope. Changes caused by contractor errors are usually the contractor's responsibility.
A change order is a modification to the construction contract between the owner and contractor. A supplement is a modification to the insurance estimate. They are related but distinct. A supplement changes what the carrier is paying; a change order changes what the contractor is doing. Many changes require both.
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