Construction Risks Faced by Clients

  • Editorial Team
  • Heavy Construction Equipment
  • 20 October 2022

It is pretty common to hear about construction projects going wrong whether it is because of a missed deadline, an accident, poor quality of materials or extended legal battles. With construction work there is a lot of risk involved so instead of getting nervous after hearing these horror stories of projects going over budget and missing deadlines you need to better understand the risks involved so you can avoid such issues. Clients, contractors and every stakeholder in the project all have different sets of risks associated with the project. But while all projects have some risks involved, if you are aware of what they are you will be able to take necessary steps to lessen the impact they could have on your project’s success.

Although you may not initially think that the contractor losing money is a problem for the client but if the contractor ends up going bankrupt it would not do the client any favors. If the project is not complete and the contractor has gone bankrupt, the client will have to engage another contractor in order to complete the project, which will end up costing more. Any subcontractors, employees or material suppliers hired by the general contractor are also at risk when he starts to lose money. But clients are not able to recognize construction risks in time to avoid them, resulting in project failure.

Project Costs Exceeding The Budget

If the final project costs end up exceeding the budget it could lead to project failure. The client can also end up becoming bankrupt due to budget overruns. There are a lot of factors contributing to projects going over budget. If there were numerous changes and variations made in the project or the project scope was increased it could result in the final costs exceeding the initial budget. Failure in defining the scope of work clearly and not allocating responsibilities properly in the documents can also result in the project going over budget. 

Delays in Project Completion

If the project is completed late the client would not be able to earn any revenue from the project and may even have to deal with additional costs for using other facilities during that timeline. If a project is delayed you will also have to deal with additional costs associated with management and supervision. A project may be delayed due to bad weather conditions, an unreasonable and unachievable project schedule or changes made in the scope of the project during execution. 

Adverse Weather

Bad weather conditions can cause delays and damage the work that has been done on the project. Operating construction equipment in bad weather conditions is quite difficult. Even if you are working with heavy duty machinery harsh weather makes it impossible to continue work at the same pace as would have been possible otherwise.

Poor Safety

Not complying with the safety standards can result in the project being stopped or its infrastructure getting damaged. Poor safety also leads to bad publicity and project delays.