Risk Management in Construction

Abstract

Construction industry have several different sectors producing heterogeneous products, which are immobile, unique, heavy and large, complex, durable and costly. Site condi tions in a construction project can be unpredictable and unexpected natural events can negatively affect construction programs and schedules. Weather conditions constitute the most important and unpredictable handicap for the production process of construc - tion. Construction projects usually executed over a long period and have large budgets. Because of this, demand for a construction project is volatile. Unpredictable site condi - tions and demand volatility bring high level of risk. Because of this, risk management is very important in construction. Construction insurance, surety bonds, contracts and sub - contracting are the main affective solutions for the risk management. This study consists of two main sections. In the first section, characteristics of construction industry defined in detail. Secondly, the importance of risk management evaluated. In the second section, the focus of the study is the evaluation of risk management studies in construction with a broad literature review of previous researches.