4 common risks in construction projects and how to avoid them

By Anita Jaynes on 30 August, 2022

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The very nature of construction makes it a risky occupation. Being able to manage and calculate these risks takes experience and know-how. If an accident should happen, it can damage the reputation of your construction company, as well as pose some heavy fines should the individuals involved decide to sue. By keeping risks to a minimum and operating safely and securely, you can build strong relationships with clients, create trust within your team and grow your business further.

Here are some common risks that arise on construction projects, as well as tips on how to avoid them.

Cost Overrun

All construction projects are based on a contract that can stipulate the due date the owners want the project completed. Depending on staff availability, last-minute alterations and other factors, projects can easily overrun, meaning that the project owner will have to shell out some more money to keep the project afloat. This can deeply damage relations between the construction company and the client.

To avoid this problem, complete a cost risk analysis and only sign contracts that have a fixed contract price. 

Labour shortages

Labour shortages are an increasing problem for the construction industry. Many companies are forced to hire inexperienced workers, therefore jeopardising the integrity, quality and safety of the project. 

In order to maintain a loyal team of workers, focus on creating a positive atmosphere within the company, provide competitive wages, enrol workers in a health and safety course and appoint an external committee to oversee project risk management. 

Health and safety hazards

It is every construction manager’s duty to ensure the absolute safety of their workers on every jobsite. Accidents can result in major injuries, putting the whole project in jeopardy. And let’s face it, it doesn’t look good to the client either!

Invest in reliable training courses, engineering controls and plenty of PPE to prevent the possibility of accidents. If something does happen, make sure you have comprehensive builder’s insurance to securely cover your business.

 Subcontractor default

A construction project requires expertise from different areas. Subcontractors are frequently hired to oversee aspects of the projects, but, unfortunately, they are not always reliable. They might rush the project or provide false information, meaning you need to protect the project against this eventuality. 

When hiring a subcontractor, check their references to see if they are reliable, invest in subcontractor default insurance and stipulate clearly the job requirements in the contract. And if they do end up falling behind on the project, don’t be afraid to confront in person them about it.