Business Services,  Legal

How to Properly Anticipate Risk in a Construction Project

construction-project-riskWhen you’re in the construction industry, risk isn’t a matter of possibility it’s one of probability. Even small-scale projects, like a renovation, can run into snags that can delay the work getting finished. When delays occur, they cost money for every stakeholder involved. It’s in your best interest to learn how to perform proper construction claim analysis, and how to anticipate potential problems before they occur.

Always Review

Review documents with outside experts to be sure that everything on your end looks safe to proceed. If you’re ordering materials, for instance, it would be a good idea to have a structural steel expert go over the work order before it’s placed. This additional layer of legal protection will help you in the case of a claim.

It’s very important to choose utilize construction claims consultants to review your documentation before work begins. If your plans don’t pan out by the time a dispute occurs, you’re at fault.

Require Additional Protection

Of course, consultants aren’t the only layer of protection. You can purchase additional insurance to cover certain aspects of the project, which should be baked into the contract. This is a fairly standard practice for stakeholders, and provides a better countermeasure to risk. Also keep in mind that a contractor’s warranty can provide a more competitive estimate to potential clients. That said, any insurance clause must contain a waiver of subrogation, which allows the insurer to step in and collect on a claim. Subrogation is essentially an agreement to transfer risk to the intended parties, and it helps disputes resolve quickly.

For more than 30 years, Lyle Charles has provided risk management solutions to commercial and residential construction projects across the United States.

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