Risk Management for Contractors

Risk Management for Contractors

Written on November 16th, 2018

Risk management is incredibly important to contractors, and there are many different kinds of risks to be considered. Those risks are both internal and external. When it comes to the management of legal risks, practical, actionable steps may be helpful. Advice is needed. What follows are ten actionable steps that can be implemented immediately: 

Tip #1
Identify problems early. Every business has disputes from time to time. Learning about issues early allows you to respond in a timely fashion so that you can either correct or mitigate the problem. To do this you need to encourage open communication with your workforce. When unfortunate events take place, the last thing you want is reticent employees who are afraid to give you the bad news.

Tip #2
Manage staff appropriately. It doesn’t do any good to have a system in place to identify problems if you have the wrong people responding to the problems once identified. Indeed, this can exacerbate the issue by making the other party feel ignored, insulted, etc.

Tip #3
Document everything. Memories fade with time, and some issues do not become apparent until long after the events that precipitated them. In such a situation, the party with the best documentation is in a much better position should it come to formal proceedings.

Tip #4
Read and understand everything. It is no defense to a claim of breach of contract that you didn’t really understand the deal. 

Tip #5
Hire professionals. You can’t be an expert at everything. If you don’t understand the transaction being proposed, hire someone to assist you.

Tip #6
Consider a business solution. When disputes arise between ongoing business relations, it may make little sense to throw the baby out with the bath water. Consider how to make up the losses as part of the ongoing relationship.

Tip #7
Don’t dabble. Do what you are good at and avoid undertaking responsibilities beyond your expertise.

Tip #8
Don’t date the staff. This much-ignored advice is one of the leading causes of lawsuits by employees when the personal relationship sours.

Tip #9
If it is too good to be true, it probably is. Many disputes arise as a result of a lack of due diligence. Almost all of them could be avoided by a little investigation.

Tip #10
Follow the Golden Rule. Treating people the way that you want to be treated will help you avoid disputes of every kind and lawsuits in particular.

Download a FREE infographic of all of these risk management prevention tips here