Construction Claim Rules in Vermont

Statutory interest rate

12% / year, fixed

Vermont's general statutory legal rate is a flat 12% per year, applied by Vermont courts as prejudgment interest on contract and construction claims. Vermont's Prompt Payment Act uses this same 12% rate for overdue construction payments (more than 21 days late) unless the contract validly specifies a different rate; the Vermont Supreme Court has rejected a contractual rate as high as 24%/year as unenforceable absent clear contract language authorizing it. Postjudgment interest on a judgment lien is also fixed at 12%.

Compounding: Simple; no compounding provision in the cited statutes.

Citation: 9 V.S.A. § 41a(a); 9 V.S.A. §§ 4001–4009 (Prompt Payment Act); 12 V.S.A. § 2903(b)

Source: https://legislature.vermont.gov/statutes/section/09/004/00041a

Accrual: breach of contract claim

As of right once the claim is liquidated or readily ascertainable; otherwise left to the court's discretion

Vermont awards prejudgment interest as of right when the principal sum recovered is liquidated or capable of ready ascertainment; for other forms of damage, an award instead lies in the court's discretion. There is no single fixed accrual date required by statute; in one construction-payment dispute the trial court used the date suit was filed rather than the date of breach, a choice upheld as within the court's discretion.

Citation: Fletcher Hill, Inc. v. Crosbie, 2005 VT 1

Source: https://law.justia.com/cases/vermont/supreme-court/2005/2002-348op.html

Vermont's rule leaves real room for a court to pick breach date, demand date, or filing date depending on the facts; don't assume date-of-breach accrual without checking how the claim was actually litigated.

Accrual: property damage / tort claim

Same liquidated/ascertainable-vs-discretionary test as contract claims; no separate rule for property damage

The Vermont Supreme Court has confirmed the same standard applies across claim types: interest is available as of right once damages are liquidated or readily ascertainable, otherwise it lies in the court's discretion. A tort slip-and-fall claim was cited as an example where prejudgment interest was properly awarded on this basis, alongside contract disputes, without a separate property-damage-specific test.

Citation: Vermont Supreme Court entry order construing V.R.C.P. 54(a) (2024)

Source: https://www.vtcourts.gov/sites/default/files/documents/op24-042.pdf

This entry order's official case name wasn't independently confirmed since Vermont's own case search wasn't fetchable as plain text; the quoted rule itself comes directly from the court's PDF.

Actual Cash Value rule

Broad evidence rule

The Vermont Supreme Court held that where a policy leaves 'actual cash value' undefined, the fact-finder may consider any evidence which logically aids in forming a correct estimate of value; both market value and replacement cost are permissible standards, consistent with Vermont's insurance bulletin guidance.

Citation: Eagle Square Mfg. Co. v. Vermont Mut. Fire Ins. Co., 212 A.2d 636 (Vt. 1965)

Source: https://law.justia.com/cases/vermont/supreme-court/1965/1998.html

The link above was upgraded in a follow-up pass to the free, full opinion text on Justia; it previously pointed to a law firm's summary article.

ACV statute or regulation

Vermont regulators treat depreciating labor cost as a per se unfair claim settlement practice under the state's insurance trade-practices statute.

The Vermont Department of Financial Regulation has taken the position, applying 8 V.S.A. Section 4724(9) together with the general unfair-practices prohibition in 8 V.S.A. Section 4723 and the state's Fair Claims Practices Regulation (Reg. I-79-2), that depreciating labor costs when calculating actual cash value for a property loss is an unfair claim settlement practice. The stated reasoning is that labor, unlike physical materials, does not deteriorate or lose value over time and therefore cannot be subject to physical depreciation.

Citation: 8 V.S.A. Section 4724(9); 8 V.S.A. Section 4723; Vt. Dep't of Fin. Regulation, Reg. I-79-2 (Fair Claims Practices)

Source: https://dfr.vermont.gov/sites/finreg/files/regbul/dfr-regulation-insurance-i-1979-02-revised-fair-claims.pdf

Two independent secondary legal sources describe this position and attribute it specifically to 8 V.S.A. Section 4724(9)(F), but a direct check of the currently codified text of Section 4724(9)(F) showed language about explaining claim denials rather than depreciation of labor verbatim, which may reflect renumbering over time or a mismatch between the commonly cited subsection letter and the current code. The overall rule, that Vermont treats labor depreciation as an unfair practice, is corroborated by multiple independent sources; treat the specific subsection letter with some caution.

Recoverable depreciation holdback

No Vermont-specific statute or regulation found governing the deadline or process for paying out withheld depreciation after repairs are completed.

The Fair Claims Practices Regulation (Reg. I-79-2) sets general prompt-payment and fair-dealing standards, but no provision specific to recoverable-depreciation payout timing was located in it or in Title 8 of the Vermont Statutes as reviewed.

Citation: Reg. I-79-2 (Fair Claims Practices)

Source: https://dfr.vermont.gov/sites/finreg/files/regbul/dfr-regulation-insurance-i-1979-02-revised-fair-claims.pdf

Checked the Fair Claims Practices Regulation directly; no holdback-timing language was found.

“No damages for delay” clause enforceability

No Vermont state or federal court has considered the validity of no-damages-for-delay clauses.

A comprehensive 50-state matrix confirms no Vermont authority addresses this question, though Vermont's Prompt Pay statute (9 V.S.A. Section4003(c)) may be read to preclude 'pay-if-paid' clauses -- a related but distinct question.

Source: https://www.woodsaitken.com/sites/default/files/Survey_50-State-Matrix_Pay-If-Paid_No-Damage-for-Delay.pdf

RESEARCHED via a comprehensive 50-state matrix (Woods Aitken LLP) specifically on no-damage-for-delay clause enforceability, covering all 50 states with primary citations. Independently confirms the genuine absence of Vermont authority on this question.

Construction contract filing deadline

6 years for a civil action, including an ordinary contract claim

Vermont's general limitations period for a civil action, including an action on a contract, is 6 years from accrual, unless a specific exception applies.

Citation: 12 V.S.A. § 511

Source: https://legislature.vermont.gov/statutes/section/12/023/00511

State unemployment insurance (SUTA)

Effective July 1, 2026, Vermont's new employer rate is 1 percent for most employers; out-of-state (foreign) construction corporations (NAICS 236, 237, 238) are instead assigned an industry-based rate. Experience-rated range is roughly 0.4 percent to 8.4 percent; the 2026 taxable wage base is $15,400.

Vermont's Department of Labor uses a system of five rate schedules and 21 tax rate classes (0 through 20). As of July 1, 2026, the new employer rate for most employers is 1 percent, and the experience-rated range across the current schedule spans approximately 0.4 percent to 8.4 percent depending on an employer's benefit ratio and the schedule in effect. The taxable wage base for calendar year 2026 is $15,400, up $600 from $14,800 in 2025, per the Department's official announcement; a further increase to $16,000 is anticipated effective January 1, 2027.

Citation: 21 V.S.A. Section 1325 et seq.

Source: https://labor.vermont.gov/unemployment-insurance/ui-employers/unemployment-tax-rates

Last checked: 2026-08-26

CONFIRMED AND EXPANDED: wage base and general new-employer rate confirmed exactly against labor.vermont.gov. Added the out-of-state construction contractor provision, confirmed directly against the same official page, which the prior entry did not mention.

Workers' compensation rating

Vermont is an NCCI advisory state; workers' compensation rates are based on NCCI loss costs, regulated by the Vermont Department of Financial Regulation.

Vermont participates in the NCCI system for classification codes and advisory loss costs. Insurers file rates based on NCCI loss costs, subject to review by the Vermont Department of Financial Regulation, Insurance Division. Vermont is a competitive, non-monopolistic state.

Citation: 21 V.S.A. Section 601 et seq.

Source: https://dfr.vermont.gov/insurance/workers-compensation

Prevailing wage law

Vermont requires prevailing wages on state construction contracts over $100,000, and on capital construction projects over $200,000 that are at least 50 percent state-funded.

Under 29 V.S.A. Section 161(b), Vermont requires that construction employees on covered state contracts be paid not less than the mean prevailing wage published by the Vermont Department of Labor in its occupational wage survey, plus a fringe benefit add-on of 42.5 percent of wages. Coverage applies to state construction projects exceeding $100,000, and to capital construction projects exceeding $200,000 that are at least 50 percent state-funded (including projects funded through the Cash Fund for Capital and Essential Investments).

Citation: 29 V.S.A. Section 161

Source: https://legislature.vermont.gov/statutes/section/29/005/00161

OSHA plan

Full state plan, private + public sector

Vermont operates VOSHA (Vermont Occupational Safety and Health Administration), a full OSHA-approved state plan covering most private-sector workers and all state and local government workers.

Citation: 29 U.S.C. § 667

Source: https://www.osha.gov/stateplans

Weight of an OSHA violation in a negligence case

Confirmed evidence, not negligence per se: direct Vermont Supreme Court citation, notably not limited to employer-employee relationships

The Vermont Supreme Court held OSHA violations constitute evidence, not conclusive proof, of negligence (the majority 'some evidence' classification. Notably, Vermont's court explicitly declined to limit this evidentiary use to the employer-employee relationship the way some other states do, meaning OSHA evidence remains relevant even when the defendant is a genuine third party rather than the plaintiff's own employer.)

Citation: Ball v. Melsur Corp., 633 A.2d 705, 712 (Vt. 1993); Marzec-Gerrior v. D.C.P. Industries, 674 A.2d 1248, 1249 (Vt. 1995)

Source: https://law.justia.com/cases/vermont/supreme-court/1993/op92-487.html

Third-party contribution against the employer

21 V.S.A. Section622 makes workers-comp exclusive against the employer, and Section624 governs third-party-recovery mechanics without creating a right of contribution against the employer -- the employer's recovery is instead protected via a reimbursement/subrogation lien on the employee's third-party recovery.

21 V.S.A. Section622 makes compensation benefits the employee's exclusive remedy. Section624 governs the situation where a third party is liable: any recovery against the third party first reimburses the employer/carrier for benefits paid, with the balance going to the employee -- there is no statutory mechanism for the third party to instead seek contribution FROM the employer. Nothing short of specific intent to injure removes an injury from the Act's exclusivity (Kittell v. Vermont Weatherboard, Inc., 138 Vt. 439 (1980), reaffirmed in Mead v. Western Slate, Inc., 2004 VT 11).

Citation: 21 V.S.A. Section622, Section624; Kittell v. Vermont Weatherboard, Inc., 138 Vt. 439 (1980).

Source: https://legislature.vermont.gov/statutes/section/21/009/00624

CORRECTED: the prior citation (Estate of Fleming v. Nicholson, 168 Vt. 231 (1998)) was wrong-topic -- that case (correct citation is actually 168 Vt. 495, not 231) is a legal-malpractice case concerning a real-estate title search, wholly unrelated to workers-comp. Replaced with the real, confirmed, on-point third-party-recovery statute.

Injury-severity gate on contribution claims

Narrow specific-intent-to-injure exception. Vermont has repeatedly refused to adopt the more lenient 'substantial certainty' test used in many other states.

Kittell v. Vermont Weatherboard, Inc. held that nothing short of specific intent to injure falls outside the Act -- an employer stripping safety devices from equipment was not enough on its own. The Vermont Supreme Court reaffirmed this narrow standard as recently as 2018 in a roofing-fall case, explicitly declining to adopt the substantial-certainty exception most states use.

Citation: 21 V.S.A. ch. 9, Section622; Kittell v. Vermont Weatherboard, Inc., 138 Vt. 439, 417 A.2d 926 (1980); reaffirmed in Martel v. Connor Contracting, Inc., 2018 VT 107.

Source: https://law.justia.com/cases/vermont/supreme-court/1980/182-79-0.html

CORRECTED: the prior citation, 'Murray v. Harrington, 1997 VT 24,' could not be found in any search. Replaced with Kittell v. Vermont Weatherboard, Vermont's actual controlling case, confirmed real and directly on point, plus a 2018 construction-specific reaffirmation.

Distinctive state doctrine

Immunity for safety-committee/inspection conduct absent gross negligence; a real, litigated VOSHA-violation fact pattern in the intentional-tort context; minor-employment exception construed narrowly

Under 21 V.S.A. § 624(h), an injured employee is barred from bringing a civil action against the workers' comp insurance carrier for conducting workplace inspections, or against an employer-employee safety committee, except in the case of gross negligence or willful misconduct: a specific immunity for safety-inspection and safety-committee activity not found elsewhere in this dataset. Separately, a federal court applying Vermont law allowed an intentional-injury claim to proceed past a motion to dismiss where a clinical supervisor allegedly continued to force subordinates to take X-rays without protective equipment even after the employer was found in violation of the VOSHA statute: a real, litigated example of a VOSHA violation being used as supporting evidence toward Vermont's very high intentional-injury threshold (desiring to bring about the consequences of the act, not mere negligence or corner-cutting). On minor employment, Vermont construed its exception narrowly: in Bruley v. Fonda Group (1991), the Vermont Supreme Court barred a minor's civil action and held workers' comp was the exclusive remedy despite the minor having operated equipment in violation of federal (though not state) child-labor law; showing Vermont's minor-employment exception doesn't automatically apply just because some child-labor law was violated. Vermont also requires employers with unusually poor safety records to form workplace safety committees with balanced management/employee representation.

Citation: 21 V.S.A. § 624(h); Buksh v. Sarchino, No. 2:21-cv-190 (D. Vt. Aug. 17, 2022); Bruley v. Fonda Group, Inc., 157 Vt. 1 (1991)

Source: https://www.alfainternational.com/compendium/workers-compensation/vermont/