Risky business simply cannot be ignored

The increasing risk management issues faced by the construction and infrastructure sector simply cannot be ignored, according to leading industry figures at the first Infrastructure Intelligence Live event of the year on Friday 29 January 2021.

Industry specialists also emphasised that warm words about increased industry and client collaboration still need to be translated into action and identifying and dealing with potential future risks while keeping clear lines of communication with clients and stakeholders were vital to enable the industry to play a vital part in the post-Covid recovery. 

The Risky Business webinar, hosted by Infrastructure Intelligence editor Andy Walker in association with Events and Communications Strategic Partner, BECG, looked at a wide range of age-old, new and emerging risks faced by the construction and infrastructure sector.

An expert panel included Sheena Sood, a senior partner at international construction and insurance law specialists Beale & Co, Andy Broome, senior account executive at global insurance broking group Howden, Jennifer Riddell-Carpenter, a director at communications and public affairs specialists BECG and Bill Zuurbier, a director at the risk management consultancy Equib.

Firms face many risks – financial, operational, regulatory, reputational and cyber security to name just some. While no construction project or business can ever be risk free, risk can be managed, minimised, shared, transferred, or accepted. What it cannot be, is ignored, as all the panellists highlighted during the 90-minute webinar.

Bill Zuurbier, founder and director of Equib, outlined the need to identify key risks at the outset of any project, making clients aware of any potential pitfalls. He said: “The construction industry - and any other industry for that matter - needs to identify the key risks they face and put measures in place to mitigate any claims. We need to identify what the key risks are. Ignoring risk is not acceptable.” 

Sheena Sood, senior partner at Beale & Co, highlighted that collaboration, Covid-19 and Brexit were all key issues facing the sector. She said: “For all the warm words, the industry still needs more collaboration and more open communications with clients in the current climate – we sadly haven’t seen much of that. 

“We are finding age-old issues appearing, but with a new focus. General claims centre around Covid-19 and Brexit. We’re advising clients to review their risk management obligations. We’ve seen too many contracts that have not been brought up to date and don’t deal with the risks of the current climate.”

Andy Broome, senior account executive at Howden, stressed the importance of reading contracts carefully and keeping lines of communication open with clients at all times. He said: “Why do claims arise? Contractual issues, lack of design direction, lack of correlation during design change or not matching existing infrastructure, cost overruns and delays and lack of accurate record keeping can all be factors that lead to disputes or claims.

“Presenting information needs to be really thorough and brokers need to ask straight questions when arranging cover. It’s really important to get your brokers to make sure your contract is as thorough as possible.”

Jennifer Riddell-Carpenter, director at BECG, speaking from a crisis management and comms perspective, emphasised the need for a clear communication strategy and identifying potential risks as early as possible on any project.

She said: “From a comms perspective, it’s no surprise that people are more involved in crisis management than they were 12 months ago. Watch out for evolving risks – risks that are not necessarily right in front to of you. Fire and safety risk, for example, is not going away anytime soon. The current debate around cladding is centred on high-rise but it will develop into other buildings including hospitals and schools.”

On crisis management and building a clear comms strategy, Riddell-Carpenter said: “Question internally whether your company is identifying risk properly. Never underestimate the danger of damaging your reputation. Ask tough internal questions and try and identify possible risks. Are company leaders confident public speakers or comfortable dealing with the media? If not, consider training – get in there early.  

“Understand the ever-changing group audiences – stakeholders, industry, media, political – because when a crisis hits, your response has to go from 0-100 immediately. Invest and build trust in good relationships with industry, politics, media – and build relationships in good time.”

Infrastructure Intelligence editor Andy Walker said: “All companies working in the construction sector have to consider risk as part of their everyday work and the Covid pandemic has shone a light on the risk management process, especially at a time when much of the industry has been working digitally or remotely. It was great to see the legal, insurance, risk and issues management experts on our panel sharing their experience of best practice on how to minimise risk in what are, let’s face it, very challenging times.”

Click here to watch a recording of the Risky Business webinar.

The Infrastructure Intelligence LIVE 2021 series of events is organised in association with our events and communications strategic partner, BECG. 

Click here to see details of the 2021 Infrastructure Intelligence Live series of events.