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Construction Project Risk

As construction projects become larger and more complex, so do the risks associated with them. The sheer size, scope, and timing of today's projects pose significant risk management challenges, including identifying risks, determining the allocation of risks among the parties involved, developing mitigation and risk treatment plans and opportunities for cost savings in single project applications or across an entire portfolio of projects.

Because of the increasing complexity and size of project risks, sponsors must view risk on an enterprise-wide project or portfolio basis to properly and consistently identify risks, develop optimal risk allocation strategies, and, if necessary, obtain "project specific" insurance.

Marsh's service philosophy centers on the belief that project risk consulting and insurance brokerage transaction services should be complementary to achieve the best results for our clients. Accordingly, Marsh has developed a disciplined Project Risk Management Process (PRMP) that seamlessly integrates our consulting and insurance brokerage services.

Insurance Design and Placement — Marsh designs project-specific risk transfer and management programs that include the optimal blend of insurance, alternative risk transfer, and retained risk to maximize protection.

Surety — Marsh can help help assess the need for project bonding, establish bonding criteria, and evaluate bonds for compliance with stated criteria. Marsh surety experts specialize in difficult and challenging placements.

Subcontractor Default — Through our proprietary SubSecure®, Marsh can help identify potential adverse implications of a subcontractor's financial situation and provide guidance for managing the risk of subcontractor default. In addition, Marsh can provide guidance on the nuances of a subcontractor default insurance program, like SubGuard®, and how to implement it on a project. We can also help subcontractors to gain competitive advantage by presenting their financials to contractors in the best possible light.

Risk Consulting — Marsh can provide extensive, process-driven strategies and tools designed to manage and monitor risks from a project's earliest stages to the final delivery and commissioning.

Risk consulting services provided by Marsh and its MMC sister companies include:

Project Risk Evaluation & Framework Services — The Marsh services are directed at delivering independent third-party risk evaluations and mitigation strategies for capital projects and project portfolios. Project stakeholders can use the results of Marsh evaluations to help remove, avoid, or eliminate a variety of obstacles preventing a capital project from moving forward or meeting its objectives. Marsh's project delivery risk management framework services are instrumental in assisting clients in meeting the project financial, schedule, and performance requirements of key project stakeholders such as insurers, rating agencies, internal boards, and lenders.

Project Governance — Projects with tight margins, tight schedules, high risks, and complex reporting requirements limit management's ability to identify and mitigate problems when they occur. Marsh can help by providing management teams with tools to identify and influence project performance before problems arise.

Project Performance Audits — Marsh helps clients address the challenges brought on by the increased need for transparency in project management, common goals in the review process, and standardization in contractor payment processes.

Loss Control — Site safety is crucial to project performance. Marsh provides risk engineering services, site surveys, health and safety consulting, and insurance claims management.
Supply Chain — Marsh provides a complete suite of supply chain risk services, from identifying and mapping risk within the supply chain to identifying and applying solutions (alternative risk strategies) to monitoring threats that affect a client's supply chain.
Crisis Management — Crises or adverse events for construction can include regulatory inquiries, litigation, labor concerns, criminal and fraud investigations, community protests, physical events, and natural disasters. Effective crisis management can mitigate the adverse impact of a crisis, reduce costs to an organization, and offer an opportunity to significantly enhance its reputation, brand, human capital, public trust, and shareholder value. Marsh can offer crisis management support and expert advice for all phases of an adverse event or crisis.
Business Continuity — Traditional and emerging risks can damage an organization's financial health and shareholders'/stakeholders' confidence, corporate reputation, and can even drive a company out of business. Insurance programs are not always enough to protect a company's reputation and maintain its market share. By focusing on business interruption risks and developing strategies designed to reduce and mitigate such risks, Marsh can help organizations in their efforts to retain and gain further competitive advantage and safeguard reputation during business disruptive moments.
Mass Tort & Complex Liabilities — Allegations surrounding such liabilities can span decades and include "long-tail" exposures involving construction defects including methods and products, as well as asbestos, silica, environmental contamination, product liability, construction defects, and much more. Marsh can help companies obtain and increase insurance recoveries, avoid costly litigation with insurers, and mitigate the financial effects of mass tort and complex liabilities.
Dispute Resolution Services — Marsh provides comprehensive tools and solutions to assist in resolving disputes quickly and efficiently so the adverse financial and business impacts are minimized. These tools include schedule, budget and issue analyses, arbitration and litigation support, and expert testimony.