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Risk Management In Construction

Risk management in construction is a critical part of any construction project. Risk management in construction is the science of reviewing a construction project for potential dangers to employees or to the success of the project, determine their risk, or likelihood of happening and the effects they would have, and the taking of steps to prevent potential accidents.

Safety is a major element of any construction project, as injuries to employees can lead to lawsuits from the client and the employee, sanctions from state or federal agencies and, possibly the shutting down of the contractor. In order to prevent lost-time accidents and damage to a contractor's reputation, risk management is very important to any builder.

Risk management balances the contingencies of risk with a company's financial and operational needs and its contractual requirements to the client. Through risk identification and exposure, a risk or safety manager can develop an effective risk management plan for each individual project.

There are several major steps that much be taken in risk management: the identification of risk; planning out the project to minimize risks; mapping out the project objectives and how risks will be evaluated to meet those objectives; defining a framework for recognizing and reporting risks; developing an analysis of risks involved with each particular project and the mitigation of risk using technology and human and organizational resources.

Risk management in construction requires a strong safety program and the full cooperation of the employees working on the project. All construction employees are required to have read and understood a company safety manual, and most projects have specific safety programs developed to mitigate risks. In order to further ensure safety, most construction companies require frequent on-site training discussion sessions and remedial training for employees to ensure they are not only following the company's safety rules and regulations, but that they are on the lookout for potential hazards on-site at all times.

Risk management in construction is an important factor in defining the success or failure of a construction contractor. All construction companies are required by law to document their reported on-site incidents, both of the lost-time variety and those that are more serious. Nearly all potential client s will ask for a contractor's reportable incident rate, and a high rate will likely eliminate any likelihood of winning a contract. Contractors are looking to make the most money possible off of each project and clients are looking for swift resolution; accidents can lead to lawsuits or fines, which will damage their bottom lines. As a result, risk management in construction is an integral part of any construction project.

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