“Today’s risk managers must be as agile and dynamic as the industry and armed with a healthy knowledge of construction practices, the latest technologies, industry trends and the ever-changing, project specific details.
Insurance and bonding are still important, but the profession is expanding beyond those two areas, says Mike Kennedy, general counsel, Associated General Contractors of America. “What’s changing are the metrics for risk management, per se,” he says. “What contractors want to know is, if it’s possible to develop practical risk-mitigation strategies in a world where surety bonds can’t protect them from all the significant risk they face, as well as how to manage the risk they retain.”
Construction has changed dramatically in the past 20 to 25 years. Not only is business more challenging in the current economy, contractors also face unknown risk with new materials (think green construction) and technologies (building information modeling and other, cyber-based innovations).
“The whole point of this is to create tools to elevate the awareness of risk so we can analyze, create specific mitigations and put [ourselves] in a better place to manage that risk or decrease the likelihood and severity of an event if it does occur.”
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