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Construction Can Be Risky Business

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

In many cases the 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.

Topics: Construction Leadership / Strategy