Los Angeles 2019 Construction Monthly

Critical in Todays Litigious
Environment
Applying effective risk management practices
has become critically important in today’s
highly litigious environment, and with
increased pressures being placed on design
and construction professionals with reduced
scopes, compressed schedules and fees – all
elements that have increased the risk and
legal actions against design and construction
professionals. When risk management
practices are applied effectively, they include:
• Values gained by risk mitigation
• An integral part of the firm’s decisionmaking
• Addresses uncertainty and assumptions
• Applies a systematic and structured
approach
• Decisions based on the best available
information
• Tailoring strategy for each project
• Consideration of human factors
The PDPG Risk Management Chapter -
addresses various risk aspects; however,
focuses primarily on professional liability
exposures, the highest area of risk for design
and construction professionals. In order to be
successful, risk management must be viewed
as problem-solving process by recognizing
and understanding risk factors, then
applying actions needed for mitigating those
exposures. There are three (3) fundamental
elements for limiting risk:
1. Identifying risks that could impact the
firm and project
2. Assigning risk to the party in the best
position to manage the exposures
3. Implementing a risk management plan
PDPG Risk Management Guidance
The following is a sample of the guidance
provided in the PDPG Risk Management
Chapter regarding the analysis of risk, and the
preventive measures that can be applied for
managing exposures.
Risk Identification - The first critical step in
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