Few industries face the same number of risks as construction. Building projects are often complex and filled with uncertainties. Because of this, construction businesses typically experience more impediments on the way to meeting their objectives than enterprises in other sectors.
Awareness is one of the most vital steps in minimising any kind of risk – so what sort of obstacles are construction businesses likely to face? This short guide answers that question with some of the most common types of risk that are posed to such businesses.
Technical risks
Sometimes it isn’t possible for builders to provide the finished product that the customer wants. This could be the case for a number of reasons, ranging from a lack of available materials or new discoveries on the construction site. In general, any change to the scope of the project and the work that’s required to complete it come with technical risks in tow.
Legal risks
Regulatory and legal changes also pose significant risks to construction companies. There are many reasons why such changes occur. The recent cladding removal changes motivated by the Grenfell disaster are a good example of this.
The law is constantly evolving. Because of the continuous uncertainty that changes will create for your business, it’s wise to consult with experts on construction insurance.
Logistical risks
Construction businesses also need to consider any potential problems that could arise in the supply chain. If your company lacks materials, equipment or transportation, you will face significant project delays and financial losses.
Similarly, your business might not have enough workers to complete a project. Without the human effort to complete work, your projects will likely suffer from extended schedules that your clients may find unacceptable.
Both labour and material shortages reduce completions, so you should focus on strengthening your supply chain to mitigate these logistical risks.
Organisational risks
Your business’s team is another source of uncertainty. From poor recruitment to inadequate procedures and communication, the people working on your construction projects can leave the business susceptible to risk.
Health and safety risks
While many construction companies understand the importance of keeping their workers safe, site conditions can change rapidly and create unexpected hazards in the process.
Due to the materials and tools used in construction, worksite accidents can be dangerous and even lethal to your employees. Serious accidents can mean that work needs to be delayed or stopped altogether, and often results in poor morale among workers, snowballing into financial risks for your business in due course.