Why do construction budgets need contingencies?
There are many facets to the answer but they boil down to two; the risk of the future and the risk of the past. While there are many things we can do to mitigate the risk of the future, it is a fact of life. Weather will change, buildings will leak and misunderstandings will continue. However, effectively eliminating the risk of the past is well within our reach.
What is the risk of the past?
It’s the decay of knowledge over time. As knowledge decays, uncertainty rises and our ability to make informed decisions suffers. Certain facts blur into vague recollections raising doubts and costs in the process.
How do we eliminate the risk of the past?
By recording the present, of course! Photos, video, sound and written notes are all key components of capturing the existing conditions on a site. The more facts we capture surrounding an event or condition, the more accurately we can examine it at a later date.
How does eliminating the risk of the past effect the construction contingency?
The right photo can eliminate the need for hundreds of hours of discovery, depositions and expert testimony. Claims about sidewalk damage, impaired access or performance milestone melt away in presence of irrefutable evidence.
In my next post, we’ll take a look at the effects of reduced risk of the past on a contingency budget.
Tags: construction budget, construction claims, construction contingency, construction defects, construction inspection, construction photography, construction risk, construction video, risk management, wrap insurance