Residual risk in building development
The development of buildings is carried out in several phases, all involving hazard, uncertainty and risk. Risks which may occur on construction projects can sometimes be designed out or avoided. Remaining risks may be:
- Transferred to the contractor.
- Shared by the employer and contractor.
- Retained by the employer.
According to NRM2: Detailed measurement for building works, the term ‘residual risk’, or ‘retained risk’ refers to risks retained by the employer, that is, unexpected expenditure arising from risks that materialise, which are retained by the employer rather than being transferred to the contractor.
The employer may ask the contractor to provide a price for taking on a risk themselves before deciding to retain a risk.
Residual risks retained and managed by the employer or their project team are described as the employer’s residual risk exposure. Risk allowances should be included in cost plan to provide for this exposure.
Government Functional Standard, GovS 002: Project delivery; portfolio, programme and project management, Version: 2.0, published on 15 July 2021 by HM Government, defines a residual risk as: ‘The risk remaining after the risk response has been applied.’
[edit] Related articles on Designing Buildings
Featured articles and news
Definition of Statutory in workplace and facilities management
Established by IWFM, BESA, CIBSE and BSRIA.
The general election and the construction industry
As PM, Rishi Sunak announces July 4 date for an election.
Tackling the lack of knowledge or confidence in heat pumps
The CICV Green Home Festival part of the Edinburgh Fringe.
Home improvements swapped for green energy upgrades
As applications down since and desire to reduce bills up.
Eco apprenticeships continue help grow green workforce
A year after being recognised at the King's coronation.
The Use of Natural Insulation Materials in Retrofit
New paper from STBA with support from SDF.
National Retrofit Hub in partnership with InstallerSHOW.
Permitted development rights for agricultural buildings
The changes coming into effect as of May 21, 2024.
Biodiversity and the built environment digital series
The nature of building, with CIOB and CWP.
A call for prevention and sensitive re-use.
Risks to the long-term effectiveness of the BNG scheme
National Audit Office publish review of Biodiversity Net Gain.
The CIAT principal designer register
Providing assurance and verification of the capability and competence of registered ATs.
Building Safety recommendations and Northern Ireland
The NI roadmap to improving safety in high rise residential.
Specifying rendered external wall insulation for fire safety
How to interrogate the evidence provided to the specifier.
The benefits of writing articles for your organisation
How to create a profile for your organisation and publish for free.
Scottish Government action to reach net-zero targets
Retrofit expert group highlight critical actions needed.
A forward thinking, inclusive global community of members.