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Basics of risk management
All construction projects are subject to risks; many
construction disputes arise where one party has not
made provision for the occurrence of a risk. On the
client's side, this may amount to a failure to think
through detailed requirements, such as that a variation is
required. On the supply side, virtually every operation is
potentially capable of delay or disruption from the effect
of weather, site conditions, market conditions, or poor
communication between different links in the supply
chain.
Risk assessment and management will not necessarily
prevent risks from occurring; however, they should
enable the consequences of the occurrence of a risk to
be planned for and minimised.
This article looks at the basics of risk assessment and
management, some of the terminology, why it is
important and what is involved.
What is risk management?
A risk is the likelihood that a hazard (anything with the
potential to cause harm e.g. working at height on
scaffolding) will cause harm to someone or something.
For example, a lack of guard rails on scaffolding could
be likely to cause a construction worker to fall, with a
resulting injury.
Risk management is the process by which risks that
arise in the workplace are assessed. This involves
putting sensible health and safety measures in place to
control the risks, then assuring that they work in
practice.
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A risk assessment is the careful examination of what, in
a specified workplace, could cause harm to people, so
that the potential hazards can be weighed up and
precautions taken to prevent harm.
What do 'ALARP' and 'SFAIRP' mean?
ALARP stands for 'as low as reasonably practicable' and
SFAIRP stands for 'so far as is reasonably practicable'.
In essence, these are the same; however, SFAIRP is the
term most often used in the Health and Safety at Work
etc Act and in Regulations, and: ALARP is the term used
by risk practitioners.
Reasonably practicable, in terms of risk management,
means that responsible personnel have taken action to
control the health and safety risks in the workplace,
except where the cost (in terms of time and effort as well
as money) of doing so is 'grossly disproportionate' to the
reduction in the risk. This can be worked out for a
particular workplace, or accepted good practice can be
applied and followed.
Why is risk assessment important?
Managing health and safety leaves a business less open
to chance. A risk assessment helps to prevent accidents
and ill health to workers, and members of the public. All
businesses are legally required to assess the risks in
their workplaces, so that plans to control these risks are
put into place.
How to do a risk assessment?
The Health and Safety Executive (HSE) has a Risk
assessment and policy template which can be
downloaded. This brings together a risk assessment,
health and safety policy and record of health and safety
arrangements into one document. However, there are
other templates available, though this one is the most
straightforward and will suit many organisations.
A number of alternative risk assessment methods exist,
though most follow the same format:
 Identify the hazards.
 Decide who might be harmed and how.
 Evaluate the risks and decide on precautions.
 Record your findings and implement them.
 Review your risk assessment.
Other methods tend to differ at the ‘evaluate the risks’
stage. Here, a common and very effective method
involves working out a risk level by categorising the
likelihood of the harm and the potential severity of harm
and then plotting these two risk-determining factors
against each other in a risk matrix (see below). The risk
level determines which risks should be tackled first.
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Figure 1 – simple risk matrix
Slightly harmful
1 2
Highly unlikely Trivial
1 1
Likelihood of harm Unlikely Tolerable
occurring 2 2
Likely Moderate
3 3
A risk matrix can be helpful for prioritising actions and
particularly lends itself to more complex situations;
however, this involves a degree of expertise and
experience to judge the likelihood of harm accurately.
Getting this wrong could result in applying unnecessary
controls or failing to take important ones.
What things do I have to include in a risk-
assessment record?
Employees and safety representatives principally should
be involved when carrying out the assessment. A risk
assessment must show that:
 a proper check of the hazards was made
 those affected were consulted
 all obvious significant hazards were dealt with,
taking into account the number of people who
could be involved
 the precautions are reasonable, and the
remaining risk is low
 Staff or their representatives were involved in the
process.
The assessment should be carried out before the work
or changes, which give rise to the risks, have started.
Few workplaces stay the same; the introduction of new
equipment, substances and procedures: all lead to new
hazards. Therefore the assessment should also be
reviewed at regular intervals, as necessary, to make
sure the hazard avoidance processes are still improving,
or at least not sliding back.
Fire safety
Under the Regulatory Reform (Fire Safety) Order 2005,
a responsible person (usually the employer, owner or
occupier) must carry out a fire safety risk assessment
and put measures in place that adequately protect in the
event of a fire. More information and guidance on how to
comply with the law can be found through the
Communities Department.
Recording the findings of a risk assessment
Health and safety law requires that a record of the
significant findings of a risk assessment is kept if a
business employs five or more people. However, it
makes sense to keep a record of the assessment for
future reviews and to share the findings with staff. It also
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Potential severity of harm
Harmful Extremely harmful
3
Tolerable Moderate
2 3
Moderate Substantial
4 6
Substantial Intolerable
6 9
proves that the assessment has been carried out if a
health and safety inspector enquires about it.
Precautionary principle
The precautionary principle says that where there is a
good reason to believe that something might cause
harm but there isn’t enough scientific knowledge to carry
out a full risk assessment, this should not be used as an
excuse to do nothing to prevent harm. The precautionary
principle is applied to a few new hazards, until enough is
learned about the risks they present. It should not be
applied to well-known hazards where the broad level of
risk has been established.
There are two sets of legislation that hold a high
relevancy to the construction industry. Both are briefly
reviewed below:
The Regulatory reform order
Under the Regulatory reform (fire safety) Order 2005
(RRFSO) all non domestic premises must have a risk
assessment, which must cover all aspects of fire safety
within the building. The fire risk assessment (FRA) will
then report any significant findings, highlighting which
areas need to be addressed and the perceived level of
risk.
The risk assessment covers of any element of the
building or business operation that could pose a threat to
human life in the event of a fire. One of the most
common issues raised by the RRFSO risk assessment
is whether fire doors are capable of providing their
required fire resistance rating.
The CDM regulations
For domestic clients a risk assessment is a matter of
good practice; however, anyone else having
construction or building work carried out has legal duties
under the Construction (design and management)
regulations 2007 (CDM 2007). These duties help to
ensure that the construction project is safe to build, safe
to use and maintain and delivers good value.
Under the CDM regulations, a client needs to:
 Appoint the right people
 Allow adequate time
 Provide information to your team
 Ensure you and your team communicate and co-
operate
 Ensure suitable management arrangements are in
place
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 Ensure adequate welfare facilities on site

 Ensure workplaces are designed correctly

In addition, for notifiable construction work (work lasting

longer than 30 days or involving 500 person days of
work), clients must:
 Appoint a CDM co-ordinator
 Appoint a principal contractor
 Ensure a health and safety plan is in place
 Keep the health and safety file

Summary
Despite the fact that the science and methodology of risk
assessment and management are well known, one of
the clearest findings in research carried out by the BRE,
in 2001, was that in the vast majority of projects, risk
management is carried out retrospectively.
Used with timeliness and common sense, risk
management should enable the delivery of safe projects
with greater certainty and consistency. However, it is the
process and involvement of relevant parties in
considering potential risks and solutions, rather than the
paperwork produced, that will best enable potential risks
to be avoided or mitigated.

Further information
Risk Assessment and Policy Template
http://www.hse.gov.uk/risk/risk-assessment-and-policy-
template.doc

Five Steps to Risk Assessment

http://www.hse.gov.uk/pubns/indg163.pdf

Fire safety
http://www.communities.gov.uk/firesafety

The Precautionary Principle

http://www.hse.gov.uk/aboutus/meetings/committees/ilgr
a/pppa.htm

Regulatory reform (fire safety) Order 2005 (SI

2005/1541)

Construction (design and management) regulations

(CDM) 2007. (SI 2007/320)

HSG150. Health and safety in construction. (3rd edition)

HSE, 2006.

L144. Managing health and safety in construction.

Construction (design and management) regulations
2007. (ACoP). HSE, 2007.

May 2010
Michael Smith is a member of the CIS editorial team. He
is a building services engineer, chartered information
specialist (MCLIP) and chartered environmentalist
(CEnv).

Written by NBS for The Construction Information Service www.theNBS.com