Professional Advice for Managing Risks for Construction Companies
The construction industry manages a large variety of risks. While other sectors deal with predictable risk factors, construction companies have to face potentially detrimental risks weekly. Every construction project is unique and comes with its own set of challenges concerning suppliers, weather conditions and labour shortages. Fortunately, there are ways to manage and even mitigate some of these risks.
What are the significant risks to construction projects?
Project managers and construction owners face a large number of risks. They can be divided into three main groups.
Pure and particular risks refer to issues that damage a person or property. For example, fire, weather conditions or collapse. It is usually a contractual obligation to take insurance out against these kinds of risks. Of course, the weather is unpredictable, and some things even the most organised contractor cannot prevent.
Second, fundamental risks refer to external factors like war, nuclear pollution, government tax policies and much more. These risks are subject to statuary liability, and you do not need insurance to cover them.
Speculative risks include losses in time and money due to unforeseen circumstances. You should prepare for these kinds of risks in your contract with other parties. For example, you should discuss how you will deal with labour shortages, unexpected ground conditions and adverse weather.
How can you prepare for future risks in the UK?
The environmental and design risks are often the biggest challenge for contractors. Preparation can help mitigate any design risks to ensure your plan is thoroughly researched and aligned with the project’s conditions. Construction insurance can protect your company from unforeseen risks and help you to manage the fallout.
Technology can help owners to mitigate delays and provide a clear picture of the project to stakeholders. You can access data, documents and reports easily and quickly online. However, a staggering 40% of construction companies still use paper plans for jobs. Paper documents can get lost easily and damaged on site.
Contractors should create a higher quality of work and integrity within their company. A recent survey found that the productivity levels of workers on different construction sites can vary by 500%. Creating a productive and efficient site can prevent delays, rework time and frustrated clients.
How can you manage risks and crises on-site?
Challenges and delays still happen, even when you’ve done everything you can to mitigate them. First, you need to identify the risk and work with your stakeholders to decide on the best action plan. Identify everything that could go wrong with this issue and the domino effect it could have. Assess the risk by scoring it on a scale of its impact on the project and prioritising the most detrimental risks.
Consider this a learning experience and develop plans to minimise the chance of this happening again. You also need to think of how you can reduce this issue’s impact by outlining protocols with your team. For example, you may need to adjust your health and safety guidelines. Finally, continue to monitor the risk and scan for any further damages on site.