Risk management in construction is a comprehensive and systematic methodology of identifying, analyzing and responding to risks to achieve construction project objectives. Effective risk management, no matter where a project is to take place, understands the geography, landscape, labour, mandates (of the client), municipality, and all other nuances unique to a region.
Today we take a look at the concept of construction risk management as it applies to your Alberta construction project/s.
1. Liability Risk
The first thing most businesses and organizations think about when considering risk associated with their own Alberta based construction project is liability. No matter how unlikely a scenario may be, you want protection from anything and everything that can result in legal expense associated with injury or property damage. You’ll want to ensure that all liability insurance policies, as they apply to the legal landscape of the province of Alberta and Canada, are in order. While it may seem like we’re stating the obvious, this understanding of liability law is extremely relevant to outside interests from the U.S. and abroad who are investing in the economic hub of Canada. When securing a general contractor to manage your Alberta construction project, begin the risk management conversation by inquiring about liability insurance. Will there be uniform coverage for all parties involved in the project? How does coverage apply to each individual subcontractor? Cover this base in detail to help you determine the liability scope of your build.
2. Environmental Liability
While we could have included this in the discussion above, it’s worth separating environmental liability for your reference. The legal system in Alberta (in addition to BC, Ontario, and Quebec) operates under the “polluter pays” principal as a central policy underpinning environmental protection, noting in particular:
“Polluters should bear the cost of cleaning up the effects of pollution from their operations rather than the public taxpayer.”
Environmental protection is a hot topic in Alberta given the predominant energy sector in our province. Construction risk management in Alberta must place close attention to environmental liability so be sure to inquire about this level of coverage.
3. Construction Cost Overruns
Risk management in construction also considers the potential for cost overruns. You may expect a certain amount of wiggle room when it comes to estimates and the overall budget but there is certainly a breaking point. Communication between you and your general contractor will be key. There may be numerous teams and equipment in use, concentrating on simultaneous projects towards completion of your build. Keeping track of equipment, labour, and materials on your own is cumbersome, so you will need to depend upon an effective and scalable system that collects, interprets, and shares data. If data is incomplete and ways of reporting data uniformly across your organization is inconsistent your risk increases. Therefore, make sure that your contractor is prepared to deliver in-depth, real-time, and comprehensive data that allows you to understand your level of daily risk exposure.
4. Brand Exposure
For the most part, this consideration applies to commercial interests. For starters, when residents (your consumers) know that your brand is entering their Central Alberta market, they remain conscious of your build. How the construction crew conducts themselves in the public eye and the condition of the site and surrounding area will impact consumer perception of your brand. This can work in your favour as they eagerly anticipate your arrival. However it can present risk if the crew is not professional or if the site is kept in disarray. Let your general contractor know that you expect a high-level of conduct in both capacities. Another thing that will impact your brand is the timeline. Your brand has likely announced an anticipated date of opening. If the build is not completed on schedule, local consumers will take notice. You will need a general contractor that is sensitive to the needs of commercial construction.
All in One Solution?
Now that you’ve assessed the elements in construction risk management as it applies to our province you have a good idea of what is needed for your next build. Covering all of the above bases can seem like a daunting prospect, and it can be. However, there is one form of construction methodology that can best hedge risk – design build. The single-point of responsibility applied in the design build concept means that you have one professional team managing the entire design and building phases of your project. This serves to remove potential for miscommunication on budgets, timelines, labour, liabilities and ultimately isolates and expels risk. Learn more about design build here and Apple Building Systems’ design build services here.
Are you ready to take the next step in your Central Alberta construction project with the best risk management processes in place? Contact us at (403) 340-6777 or here anytime.