Risk Mitigation Strategies

Implement these four strategies to minimize the risk on your projects.

Risk Mitigation Strategies

After identifying risks on your project, the next step is to develop a response plan to minimize their potential impact on the project as much as possible. These four strategies can be implemented and should be considered for each risk.

Accept the Risk

For risks with a lower likelihood and impact, you may choose to accept that the risk may occur. In this case, you can choose to carry an allowance or pay for it with your contingency if it occurs.

Transfer the Risk

Transferring risks to another party is a strategy often employed. One common way to transfer risk is to purchase insurance, which transfers the risk to the insurance company. For example, if you are performing work near railroad tracks, you can purchase railroad protective liability insurance to cover the risk since this is typically excluded in most general liability insurance policies.

Mitigate the Risk

To mitigate a risk, you should look for ways to reduce its impact and likelihood of the risk. For example, if the specified generator has a six-month lead time that doesn't work with the schedule, consider using another manufacturer with a shorter lead time to mitigate the risk to the schedule.

Avoid the Risk

Sometimes making a decision that helps you avoid the risk altogether is a good option. For example, instead of building during the rainy season, the project may be scheduled for drier months to eliminate the risk of weather-related delays.