What Contractors Need to Know About Risk Management in Construction
What Contractors Need to Know About Risk Management in Construction
Abstract
Construction Risk Management: What Contractors Should Know As a construction contractor, you likely contend with multiple risks each day. Effective risk management might also help you evaluate potential projects and determine when a project might involve more risk than you are willing to take on. Common Risks in Construction Projects To properly manage risk on construction projects, you first need to know the common types of risks to look for. Some of the most common risks a project might involve include the following: Internal or external thefts of tools and equipment Poorly drafted contracts Safety hazards Labor shortages Poorly defined project scope Subcontractor/supplier issues Incomplete drawings/plans Increased costs due to economic changes Supply chain issues Unavailability of supplies Natural disasters If project risks become reality, they can seriously impact your performance, schedule, and costs and negatively affect your ability to perform as promised. Identifying Unique Project Risks You should work to identify the unique risks of a project as early as possible before you begin work. Process of Managing Risks on Construction Projects After you have identified all of the potential project risks, you will then need to assess the probability of each risk occurring and the impact it will have if it happens. Risk Management Strategies Once you have identified the risks and the strategies that can be used to manage them effectively, you will need to ensure that you have all of the strategies in place to mitigate them.