Residual risk in building development
The development of buildings is carried out in several phases, all involving hazard, uncertainty and risk. Risks which may occur on construction projects can sometimes be designed out or avoided. Remaining risks may be:
- Transferred to the contractor.
- Shared by the employer and contractor.
- Retained by the employer.
According to NRM2: Detailed measurement for building works, the term ‘residual risk’, or ‘retained risk’ refers to risks retained by the employer, that is, unexpected expenditure arising from risks that materialise, which are retained by the employer rather than being transferred to the contractor.
The employer may ask the contractor to provide a price for taking on a risk themselves before deciding to retain a risk.
Residual risks retained and managed by the employer or their project team are described as the employer’s residual risk exposure. Risk allowances should be included in cost plan to provide for this exposure.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Heritage on the edge?
Prioritising tax considerations.
Reviewing the Double Diamond Design model
The four D creative process: discover, define, develop and deliver.
National Cyber Security Centre initiative is announced.
The impact of COVID-19 on global HVAC&R markets
Reviewing trends and projections.
Legislation will establish initiatives to move towards net zero.
Status determination statement
How to document contractor employment status.
Social distancing goes high tech
Tech tools to help manage people and space post-pandemic.
Eclectic Edwardian architecture
A style that ranges from mock Tudor to arts and crafts to the 'Wrenaissance'.
Free guide from Secured by Design.
Building Back Better: Circularity
BREEAM strategy for sustainability and the circular economy.
Free tool to improve the construction programming process.
Building services verification
Are buildings doing what they're supposed to be doing?
Cities with quick access to everything by foot or bike.