scholarly journals Sustainable Risk Assessment through the Analysis of Financial Losses from Third-Party Damage in Bridge Construction

2020 ◽  
Vol 12 (8) ◽  
pp. 3435 ◽  
Author(s):  
Sungjin Ahn ◽  
Taehui Kim ◽  
Ji-Myong Kim
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Third Parties ◽  
Assessment Model ◽  
Third Party ◽  
Risk Indicators ◽  
Insurance Company ◽  
Bridge Construction ◽  
Foundation Type ◽  
Financial Losses

Due to the recent introduction of innovative construction methods and technologies, construction projects increasingly require sustainability in their high degrees of specialization and complex work processes. This is due to a wide variety of new risk factors associated with construction projects that can lead to extensive and severe damage. When an accident occurs during a construction project, it can cause material, property, or bodily damage not only within the actual construction site but also outside, affecting third parties. This study analyzed the record of such third-party damage and the subsequent financial losses in bridge construction management, to identify the objective and quantified relationship of risk indicators related to the damage and losses. In order to assess the actual losses in construction projects, we adopted the loss claim payout data as recorded and provided by a major Korean insurance company, and conducted a multiple regression analysis to identify the loss indicators and to develop a loss estimation model. In this study, the analysis of the data indicated that the superstructure type, the foundation type, floods, and company ranking by the amount of the contract were the four statistically significant risk indicators that affected financial losses from third-party damage, among the nine variables used as independent variables, which included the superstructure type, foundation type, superstructure construction method, maximum span length, floods, typhoons, total construction cost, total construction period, and company ranking. As this study focused on identifying the risk factors and producing a loss assessment model quantified in numerical values, the results provide important references for assessing and minimizing the risks to third parties and the consequential financial losses in bridge construction, while promoting sustainability objectives.

scholarly journals Loss Assessment for Sustainable Industrial Infrastructure: Focusing on Bridge Construction and Financial Losses

2020 ◽  
Vol 12 (13) ◽  
pp. 5316 ◽  
Author(s):  
Ji-Myong Kim ◽  
Taehui Kim ◽  
Sungjin Ahn
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
New Technologies ◽  
Rapid Development ◽  
Significant Risk ◽  
Sustainable Construction ◽  
Insurance Company ◽  
Estimation Model ◽  
Bridge Construction ◽  
Financial Losses

Bridges are important infrastructures for urban growth and the economic development of a country, because bridges allow a large volume of logistics and transportation by connecting rivers, canyons, islands and lands. As such, massive resources including financial, material and human resources are invested for bridge construction and management. However, although the latest bridge construction is undergoing rapid development of new technologies and designs, the management and prevention of risks still tend to rely on qualitative practices, which, as a result, calls for more quantified and systematic measurement and, thus, more sustainable management of potential risks. As part of efforts in managing risks to achieve quantitative risk management, this study aimed to predict losses of financial resources by identifying statistically significant risk factors based on the past record of insurance claim payouts (compensation for a loss that occurred as a result of a material damage in bridge construction projects) from a major insurance company in Korea, and conducted a multiple regression analysis to identify the loss indicators and to develop a loss estimation model. The statistical analysis confirmed that superstructure types, superstructure construction methods, and construction duration are the three significant risk factors that affects financial losses of bridge construction projects among the seven variables adopted as independent variables, which included the superstructure type, maximum span length, superstructure construction method, foundation type, floods, typhoons, and construction duration. Such findings, and the consequentially developed risk prediction model of this study, will contribute to sustainable construction management through cost reduction by predicting and preventing the future financial loss factors of bridge construction.

Developing a fuzzy risk assessment model for guaranteed maximum price and target cost contracts in South Australia

Facilities ◽  
2014 ◽  
Vol 32 (11/12) ◽  
pp. 624-646 ◽  
Author(s):  
Daniel W.M. Chan ◽  
Joseph H.L. Chan ◽  
Tony Ma
Keyword(s):  
Risk Factors ◽  
Risk Assessment ◽  
Construction Projects ◽  
South Australia ◽  
Assessment Model ◽  
Risk Assessment Model ◽  
Content Type ◽  
Risk Levels ◽  
Target Cost ◽  
Fuzzy Risk Assessment

Purpose – This paper aims to develop a fuzzy risk assessment model for construction projects procured with target cost contracts and guaranteed maximum price contracts (TCC/GMP) using the fuzzy synthetic evaluation method, based on an empirical questionnaire survey with relevant industrial practitioners in South Australia. Design/methodology/approach – A total of 34 major risk factors inherent with TCC/GMP contracts were identified through an extensive literature review and a series of structured interviews. A questionnaire survey was then launched to solicit the opinions of industrial practitioners on risk assessment of such risk factors. Findings – The most important 14 key risk factors after the computation of normalised values were selected for undertaking fuzzy evaluation analysis. Five key risk groups (KRGs) were then generated in descending order of importance as: physical risks, lack of experience of contracting parties throughout TCC/GMP procurement process, design risks, contractual risks and delayed payment on contracts. These survey findings also revealed that physical risks may be the major hurdle to the success of TCC/GMP projects in South Australia. Practical implications – Although the fuzzy risk assessment model was developed for those new-build construction projects procured by TCC/GMP contracts in this paper, the same research methodology may be applied to other contracts within the wide spectrum of facilities management or building maintenance services under the target cost-based model. Therefore, the contribution from this paper could be extended to the discipline of facilities management as well. Originality/value – An overall risk index associated with TCC/GMP construction projects and the risk indices of individual KRGs can be generated from the model for reference. An objective and a holistic assessment can be achieved. The model has provided a solid platform to measure, evaluate and reduce the risk levels of TCC/GMP projects based on objective evidence instead of subjective judgements. The research methodology could be replicated in other countries or regions to produce similar models for international comparisons, and the assessment of risk levels for different types of TCC/GMP projects (including new-build or maintenance) worldwide.

scholarly journals Risk Assessment Model Based on Fuzzy Logic for Residential Buildings

2021 ◽  
Vol 29 (4) ◽  
pp. 37-48
Author(s):  
Namdeo Hedaoo ◽  
Amey Pawar
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Residential Buildings ◽  
Construction Project ◽  
Significant Risk ◽  
Fuzzy Model ◽  
Residential Building ◽  
Assessment Model ◽  
Response Strategy ◽  
Industry Professionals

Abstract Risk is involved in every construction project. Residential building construction projects comprise a variety of risks and are more likely to be affected due to their difficulty and many operations and threats. The study aims to identify the various risk elements and their effect on construction projects of residential buildings using a fuzzy approach with the help of MATLAB software. This study includes 60 risk factors recognised through an expert opinion and literature review. These factors are categorised into 7 major groups, i.e., construction, project manager, architect/consultant, contractor, owner, resources, and external environment-specific risk factors. A questionnaire was prepared and sent using emails based on the identified risk factors to be filled out by construction industry professionals in India and by conducting in-person interviews. Based on the risk severities obtained from the fuzzy model, the top 10 risk factors have been considered. As a result, for identified top severe risk factors, a significant risk response strategy was implemented.

scholarly journals Quantifying the Third-Party Loss in Building Construction Sites Utilizing Claims Payouts: A Case Study in South Korea

2020 ◽  
Vol 12 (23) ◽  
pp. 10153
Author(s):  
Ji-Myong Kim ◽  
Kag-Cheon Ha ◽  
Sungjin Ahn ◽  
Seunghyun Son ◽  
Kiyoung Son
Keyword(s):  
Construction Management ◽  
Construction Projects ◽  
Building Construction ◽  
Assessment Model ◽  
Third Party ◽  
Sustainable Construction ◽  
Loss Assessment ◽  
Construction Sites ◽  
The Third ◽  
The Third Party

This study aims to quantify the losses to third-parties on construction sites by determining the loss indicators and identifying the relationship between the losses and the indicators to improve the sustainability on building construction sites. The growing size and intricacy of recent construction projects have resulted in the growth of losses, both in quantity and frequency. Notably, third-party losses are rapidly increasing owing to the urbanization of the environment and increases in construction scale. Therefore, for efficient and sustainable construction management, a financial loss assessment model is essential to mitigate and manage such loss. This study uses the third-party losses on construction sites obtained from a major South Korean insurance company to describe the difference from the material losses and to disclose the loss indicators based on actual economic losses. ANOVA analysis and multiple regression analysis are adopted to identify the variance and define the loss indicators and to make prediction models, respectively. Several groups of loss indicators are investigated, including construction information and the occurrence of natural disasters. The findings and results of this research afford an essential guide to sustainable construction management, and they can serve as a first stage loss assessment model for construction projects.

Developing a supplier’s third-party relationships and cooperation in project networks

2015 ◽  
Vol 8 (1) ◽  
pp. 74-91 ◽  
Author(s):  
Miia Martinsuo ◽  
Rami Sariola
Keyword(s):  
Construction Projects ◽  
Research Strategy ◽  
Third Parties ◽  
Third Party ◽  
Exploratory Research ◽  
Research Attention ◽  
Content Type ◽  
Project Networks ◽  
Structural Engineers ◽  
The Relationship

Purpose – The purpose of this paper is to increase understanding on the emergence of mutually beneficial relationships between component suppliers and third parties in projects, and their interaction practices in the project and potential new services. Design/methodology/approach – A qualitative, exploratory research strategy is employed in the context of construction projects, with construction component manufacturers as the focal component suppliers. In total 22 interviews were conducted with structural engineers and architects as relevant third parties, to discover the specifics of component suppliers’ third-party relationship development in construction projects. Findings – The results show the crucial role of third parties in the constructor’s and customer’s decision-making process, and various ways for component suppliers to develop the relationship toward the third parties. The results offer important knowledge about the cooperation between construction component suppliers and third parties and means to increase the centrality of component suppliers in the project network. Research limitations/implications – The research was delimited to structural engineers and architects as third parties in construction projects in one country. Further research is encouraged on third-party cooperation in other kinds of project networks, other kinds of third parties, and the various forms of triadic cooperation in project networks. Practical implications – The results encourage component suppliers to take a proactive approach in developing relationships with third parties, when strengthening their network position. The paper introduces practical ways in which component suppliers may take action toward generating powerful main contractor-supplier-third-party triads. Originality/value – Limited research attention has been directed at third parties and triadic cooperation in project networks. This paper offers important knowledge about the relationship between component suppliers and third parties, particularly in terms of third parties’ expectations and practical initiatives to enhance the relationships.

A fuzzy model for evaluating risk impacts on variability between contract sum and final account in government-funded construction projects

2015 ◽  
Vol 13 (1) ◽  
pp. 45-69 ◽  
Author(s):  
Ernest Effah Ameyaw ◽  
Albert P.C. Chan ◽  
De-Graft Owusu-Manu ◽  
Ekow Coleman
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Fuzzy Model ◽  
High Impact ◽  
Assessment Model ◽  
Research Approach ◽  
Principal Component Factor Analysis ◽  
Related Factors ◽  
Content Type ◽  
Client Factors

Purpose – The purpose of this paper is to identify and then evaluate perceived risk factors influencing variability between contract sum and final count, and to develop a fuzzy risk assessment model for evaluating the overall impact of established critical risk factors impacting on variability between contract sum and final account in government-funded construction projects. Construction projects are characterised by risk factors that significantly impact on variability between the contract sum and final account. Design/methodology/approach – A research approach integrating questionnaire survey, mean scoring ranking and principal component factor analysis (PCFA) methods was adopted to evaluate and classify the critical risk factors. A fuzzy synthetic evaluation method was sequentially applied to compute the overall risk impact (ORI) of eight critical risk factors’ impact on variability between contract sum and final account. Findings – Initial results showed that eight critical risk factors have high impact on variations between contract sum and final account, namely (in order): project funding problems, underestimation of quantities, variations by client, change in scope of works, inadequate specification, change in design by client, defects in design and unexpected site (ground) conditions. PCFA produced two factor solutions: “professional-related factors” and “client factors”. The fuzzy model further showed that the ORI is 5.48, indicating that these risk factors have a high impact on variability between contract sum and final account in public construction projects. The client factors have a very high impact (5.59), while the professional-related factors indicated a high impact (5.41) on project cost variability. Originality/value – A practical model is proposed to evaluate the key risks associated with cost overruns in public projects. By giving effective and sustained attention to these factors, variability between contract sum and final account, a common situation in Ghana, can be controlled to achieve cost savings in public infrastructure projects.

Identification of risk patterns in Vietnamese road and bridge construction

2017 ◽  
Vol 7 (1) ◽  
pp. 59-72 ◽  
Author(s):  
Chau Ngoc Dang ◽  
Long Le-Hoai ◽  
Soo-Yong Kim ◽  
Chau Van Nguyen ◽  
Young-Dai Lee ◽  
...  
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Bridge Construction ◽  
Content Type ◽  
Construction Companies ◽  
Related Data ◽  
Foreign Companies ◽  
Actual Risk ◽  
Real Risk ◽  
Different Types

Purpose The purpose of this paper is to identify risk patterns of road and bridge projects in Vietnam, where the construction market is emerging but attractive to construction organizations, especially foreign companies. Design/methodology/approach Using a questionnaire, experienced practitioners of various contractors were interviewed to collect risk-related data in terms of actual likelihood and impact from road and bridge construction projects in Vietnam. Using the collected data of actual likelihood and impact, the specific probability and impact of risk factors were determined for different types of road and bridge projects, including small and medium type, big type, government-funding type, and other-funding type (e.g. official development assistance funds, public-private partnership). Findings The results of analysis indicate the specific probability and impact of risk factors in four risk themes, including contractor-related, project-related, owner-related, and external risks. Actual risk patterns for different types of road and bridge projects in Vietnam were identified. Practical implications The identification of actual risk patterns could help practitioners to know which risk factors are severe in frequency and/or impact. Hence, they could establish proper strategies to manage risk-related problems of road and bridge projects, in which they are directly involved. Originality/value The findings of this study could provide construction companies, especially foreign companies, with a better understanding of real risk panorama in Vietnamese road and bridge construction. Hence, they could make effective improvements on risk management of road and bridge projects in Vietnam.

Development of a Risk Assessment Model for Oman Construction Industry

2014 ◽  
Vol 70 (7) ◽  
Author(s):  
K. N. Yafai ◽  
J. S. Hassan ◽  
S. Balubaid ◽  
R. M. Zin ◽  
M. R. Hainin
Keyword(s):  
Risk Factors ◽  
Risk Assessment ◽  
Construction Industry ◽  
Construction Projects ◽  
Model Development ◽  
Arabian Gulf ◽  
Assessment Model ◽  
Research Approach ◽  
Secondary Sources ◽  
Assessment Procedures

Oman as one of the Arabian Gulf countries which have invested billions of dollars in the construction industries, infrastructural services and real estate, but it is clearly identified that risk assessment was not applied for once on these awarded contracts. Lack of knowledge and awareness of risk management or assessment procedures in the construction industry in Oman caused additional cost and time delay in most of the awarded construction projects. This paper aimed at developing a model for risk assessment in the Oman construction industry to save huge amounts of millions of money wasted due to this problem. A field survey of semi-structured questionnaire with face-to-face interviews was carried out in the Oman construction industry including public, contractors and consultants. The research approach relies on data collected from primary and secondary sources. Combination of quantitative and qualitative data analysis was used in analysing the data for the Model development. The risk factors in the Oman construction industry varies from one category to another, the risk factors in government category are more than the consultant category and contractor’s category. Overall, the Oman construction industry has no very high risk factors, which means it has good opportunities for investment. It is expected that the output of this research will have a good and beneficial contribution to save time and money for both public and private sectors in Oman due to expected awareness and improvements in the risk assessment procedures. 

scholarly journals Proses Klaim Produk Director & Officers (D&O) Liability Insurance di Indonesia

2020 ◽  
Vol 15 (3) ◽  
pp. 171-182
Author(s):  
Yulial Hikmah
Keyword(s):  
Third Parties ◽  
Third Party ◽  
Liability Insurance ◽  
Insurance Company ◽  
Literature Study ◽  
Corporate Profits

D&O (Directors & Officers) liability insurance  is a protection of guarantees for Directors and Company officials (the insured) for losses arising from third party claims due to negligence around managerial or operational matters carried out by the insured. This study discusses the process of settling claims for D&O liability insurance products, claim adjustments in compensation calculations, and provisions in policies that are considered adjustments to compensation calculations. This research was conducted by interview, observation and literature study. The claim process begins with claims from third parties to the insured, and must be reported directly to the guarantor (insurance company) as soon as possible. After the report is received by the guarantor, the guarantor will begin to follow up on the claim by conducting a survey of claim investigation and collecting supporting documents needed. Furthermore, the guarantor will make a decision whether the claim submitted by the insured is guaranteed or not based on the provisions of the policy. If the claim is rejected, a rejection notice will be sent. However, if it turns out that the claim is declared guaranteed, a claim approval notice will be sent to subsequently make a claim payment. Adjustment in the calculation of compensation is needed to optimize the amount of compensation issued by the insurance company so that it can be minimized in order to achieve corporate profits.

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