EFFECTIVE MANAGEMENT OF RISK IN CONSTRUCTION

Effective Management Of Risk In Construction

Abstract

In this paper we are going to talk about Effective Management of Risk in Construction. First we will present a brief introduction and objectives of the paper. After that we will go on to incorporate literature review and then we will provide a proposed methodology.

Table of Contents

Effective Management Of Risk In Construction4

Introduction4

Literature Review4

Proposed Methodology7

Proposed References8

Effective Management Of Risk In Construction

Introduction

Construction professionals need to know how to balance the contingencies of risk with their specific contractual, financial, operational and organizational requirements. In order to achieve this balance, proper risk identification and risk analysis is required. The risk management process entails identifying construction risks and exposures, and formulating an effective risk management strategy to mitigate the potential for loss. The objective of this paper is to discuss the effective management of risk in construction..

Literature Review

The two most problematic areas for construction professionals to effectively manage are contractual risks and the insurability of projects. Contract reviews and insurance facilitation are critical components on an effective risk mitigation and management program. Insurance facilitation assumes the probability that accidents will occur and seeks an efficient way of distributing and/or transferring the risk.

In many instances the ultimate loss is transferred to the insurer, using conventional insurance as the risk transfer method. In other instances, the use of contractual risk transfer methods, utilizing indemnification provisions, are used. However, in most cases, the combination of insurance, risk financing, and contract indemnification provisions are used.

Indemnification can be viewed from the perspective of worker safety and avoidance of accidents, with an emphasis on the exculpatory aspects of indemnification. However, sometimes escaping liability and the associated consequences can create problems with the misuse of indemnification provisions. Particularly, with the broad form or intermediate form, which can exculpate the indemnitee from his/her own ...