The Complete Guide to Risk Management in Construction Projects

risk managementProtecting your employees, clients, and other passersby is critical for construction managers. Risk management in construction projects cannot be overlooked and should be well-planned before the project even begins. Consider the types of risk your company will face and the factors that increase the risk as you learn tips to improve risk in your projects.

What is Risk Management in Construction Projects?

Every company carries risks in construction projects. Identifying those risks, minimizing them where possible, and protecting workers and others as well as the company itself from the fallout is the job of risk management in construction projects.

Risk managers must create a detailed plan that is easy to follow to control risks while making the right decisions on how to deal with them when they pose a threat.

Types and Factors of Risk

Before you can create a plan to manage risk, you must identify the types of risk that are prevalent on every construction project. One of the most common is safety risk. Every construction site will have hazards that pose risks to workers and others who are in the work zone.

Financial risk is another concern for risk management in construction projects, which must be dealt with before it happens. Some examples include unexpected increase in cost, changes in the economy, lack of sales, issues with payment from clients, and competition from other construction firms.

During the project, certain hazards may play into the increased risk, such as mismanagement of time or resources, failure to meet deliverables, or lack of policies on the jobsite. Legal risk may result if the contract is not fulfilled. Environmental risk comes in the form of natural disasters, which can delay work and damage the project site.

What are the Different Types of Risk Management Options?

When looking at the various types of risk, you must consider how to handle each one. The decision on what step to take will be unique to each risk faced. For instance, you might decide to turn down a project to avoid the risk. Avoiding the risk is one option to protect the company when the level of risk is too high.

Another option in risk management in construction projects is to transfer the risk to someone else. The client may need to bear some of the risk, especially if their decisions are at least partially the cause of the risk.

Mitigate the risk whenever possible. This may mean having backup plans in case the original plan fails. You may need to hire more workers or add in extra work time as a buffer for potential problems.

In some cases, your only option may be to accept the risk. You prepare as much as possible, but you must move forward even if you can’t eliminate all of the potential problems.

One area where you can reduce risk is in the safety of your workers during operations. When they are working on aerial lifts or other AWPs, it is critical that they know what they are doing and how to look for and recognize problems. CertifyMeOnline.net can help you get your workers certified in these lifts to ensure they know how to operate the machines and meet OSHA requirements. Contact us today to learn more or to get started on certification.

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