From the course: Construction Management: Managing Risk
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Understanding risk transfer
From the course: Construction Management: Managing Risk
Understanding risk transfer
- Another common way of dealing with risk in construction is to transfer the risk to another party. Now, let me take a minute here and give you my stipulations on transferring risk. Done properly, the idea is not to transfer risk to anyone that will accept it. If you are going to transfer risk, the idea is to transfer risk to a party that is better able to handle it. Now, using one of my earlier examples, I said I was a general contractor that also self-performed some of our work, including undergrounds, like sewer and storm drain. Now, on one project, we were going to be required to repair and extend a sewer manhole that led to a very big, very active sewer main. I looked at it before submitting the bid, and there's really no other way to say it than it was just going to be really nasty work in that manhole. It was an extremely hazardous confined space and really outside the scope of our experience. Now, rather than self-perform that work item and take on all that risk, which was…
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