Tariffs, Al and the Decisions Roofers Can't Afford to Get Wrong

Roofing contractors face growing legal and financial risks from tariffs, material price increases, artificial intelligence in hiring and asphalt shingle granule loss. Attorney Trent Cotney shares strategies for updating contracts, managing customer expectations and protecting roofing businesses from costly disputes.

Tariffs Reach Beyond Imported Materials

Tariffs remain a concern for the construction industry, but Cotney said their impact may be broader than many roofing contractors realize.

When he talks with contractors around the country, Cotney said some point to obvious examples, such as increases in steel prices or imported equipment. The bigger issue, however, is that manufacturers may be increasing prices because their products or components are affected by tariffs, or because tariffs are contributing to broader pricing pressure.

“One way or the other, material prices have gone up,” Cotney said.

For roofing contractors, tracing a price increase directly to a specific tariff is not always straightforward. Roofing systems contain numerous components, and different parts of those systems may be affected differently.

Cotney said he was aware of at least two rounds of manufacturer price increases and warned that contractors should be prepared for additional changes. That makes contract language increasingly important.

His recommendation is for contractors to make sure their agreements account for potential price fluctuations and allow adjustments when material costs unexpectedly rise. Contractors should also communicate those possibilities with customers before work begins.

Price acceleration provisions can provide another layer of protection. Cotney said these provisions have proven useful during previous periods of volatility, including COVID-19, material shortages and natural disasters. Trade associations can also be a good source for contract resources.

Cotney recommends such provisions for both residential and commercial roofing contractors.

AI Creates a New Employment Risk

Artificial intelligence is creating another challenge, particularly as employers increasingly use technology to evaluate prospective employees.

Cotney said AI is pushing against the boundaries of existing laws and regulations because technology continues to evolve much faster than the legal system.

AI and related technologies can be used to vet candidates, conduct certain types of background research, evaluate risks and examine publicly available social media information. Employers also need to be cautious when using AI with existing employees because confidential company or employee information could inadvertently be uploaded into third-party systems.

Cotney pointed to proposed legislation in New York as an example of where regulation could be headed. The proposal discussed during the podcast would establish notice requirements when employers use certain third-party artificial intelligence or electronic monitoring technologies in employment decisions.

While the measure discussed during the interview was still proposed legislation rather than final law, Cotney said the larger takeaway is what it could signal nationally.

“You can see that this is going to be one of many attempts across the country to regulate how employers go about using AI,” he said.

The difficulty for lawmakers is keeping pace.

AI capabilities have changed dramatically in just a year, Cotney said, and could look entirely different a year from now. That means contractors adopting AI for recruiting, hiring, employee management or other business functions should pay attention not only to what the technology can do, but also to emerging legal requirements surrounding its use. 

Protecting Contractors from Granule Loss Claims

The final issue Cotney raised hits squarely at residential roofing: asphalt shingle granule loss.

Some granule loss is normal, he said, particularly during transportation and initial installation. Manufacturers generally account for that expected loss when producing shingles.

The warning sign is more significant granule loss that begins exposing the asphalt beneath.

Once shingles become bare enough to expose asphalt, Cotney said there can be concerns about UV exposure, premature deterioration and reduced roof performance.

There is also a customer-relations issue. Homeowners may see granules in gutters or around downspouts and assume something is wrong with the installation, even when the amount of shedding is within normal expectations.

Cotney recommends addressing that possibility before it becomes a dispute.

Contractors should consider language explaining that some granule loss is naturally occurring and clarifying where responsibility lies if the roofing material itself proves defective. Cotney said contractors should make clear that the manufacturer's warranty is the remedy for issues related to the material makeup of the shingle rather than leaving the contractor exposed to responsibility for something it did not manufacture.

That recommendation reflects a recurring theme in Cotney's appearances on “The Best of Success Podcast Show”: contractors cannot anticipate every problem, but they can build protections into their agreements before problems arise.

Whether the issue is tariffs, artificial intelligence or granules coming off a new roof, Cotney's message is much the same: understand the risk, communicate with customers and employees, and make sure the contract keeps pace with a changing roofing industry.