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Download Risk Management Issues And Contractual Obligations
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RISK MANAGEMENT ISSUES AND CONTRACTUAL OBLIGATIONS Curt Sumner, LS Executive Director, ACSM COMMUNICATING FEELINGS AND ATTITUDES Others receive your communications in the following ways: 7% by the WORDS you say 38% by the TONE OF VOICE you use 55% by your NONVERBAL messages STATISTICS FROM RESEARCH BY DR. ALBERT MEHRABIAN, UCLA, PRINTED IN SELLING POWER MAGAZINE OCTOBER 2004 ISSUE Barriers to Communication Poor Listening Habits Personality Differences Improper Use of Language Invalid Assumptions Lack of Initiative Lack of Awareness Weak Verbal Skills Poor Communications Lead to Unmet Expectations Improper assumption of what is expected Impatience Attitude SCOPE of SERVICES 67% of CLAIMS AGAINST SURVEYORS ARE BROUGHT by the PROJECT OWNER COMMON SOURCE OF CLAIMS… Claimant ID, Surveyors, 1990-2000 General Contractor 18% Third Party PD 11% SubContractor 2% UNMET EXPECTATIONS BI/Worker 1% Project Owner 67% BI/Non-Worker 1% Insurance Company 0% WHY MANAGE RISK? INCREASE PROFITABILITY IMPROVE BUSINESS RELATIONSHIPS SATISFY CLIENT EXPECTATIONS AVOID DISPUTES CLAIMS AND DISPUTES CAUSE... LOSSES INSURED AND UNINSURED LOST PRODUCTIVITY ADVERSARIAL RELATIONSHIPS DAMAGE to REPUTATION WHAT IS LIABILITY? FOUR ELEMENTS ARE REQUIRED TO PROVE LEGAL LIABILITY: DUTY LEGALLY SANCTIONED OBLIGATION BREACH CAUSATION DAMAGES SOURCES of DUTY COMMON LAW STATUTORY LAW JUDGE MADE LAW PROFESSIONAL STANDARD of CARE CREATED by the LEGISLATIVE BODY STATE LICENSING REQUIREMENTS CODES and REGULATIONS CONTRACT LAW WHAT the PARTIES AGREE TO CONTRACT ESSENTIALS “YOU GET WHAT YOU NEGOTIATE -- NOT WHAT YOU DESERVE” CONTRACT ESSENTIALS FOUR ESSENTIAL ELEMENTS... 1. Assign Responsibility to the Party in the Best Position to Carry it Out. 2. Assign Responsibility with the Authority to Fulfill It. 3. Assign Each Responsibility to Only One Party. 4. Create Reasonable and Realistic Expectations. RISK MANAGEMENT MODEL REQUIREMENTS (PROGRAM) •INPUTS: CONSTRAINTS (BUDGET, SCHEDULE, ETC.) CONTEXT (LEGAL, ECONOMIC, ETC.) PHASE 1 PHASE 2 PHASE 3 RISK ANALYSIS RISK RESPONSE RISK CONTROL • IDENTIFICATION • ASSESSMENT •PROBABILITY •SEVERITY • AVOID • RETAIN & MITIGATE • TRANSFER •INSURANCE •CONTRACT OUTCOME • PLAN IMPLEMENTATION • MONITORING/MITIGATION • DISPUTE/CLAIMS MANAGEMENT ALTA/ACSM SURVEYS as a RISK MANAGEMENT TOOL Define Responsibilities of Parties Establish Scope Set Expectations Establish Standard of Care OTHER CONTRACTUAL ISSUES CERTIFICATIONS DISPUTE AVOIDANCE/DISPUTE RESOLUTION TRANSFER OF ELECTRONIC INFORMATION ENVIRONMENTAL HAZARDS INDEMNIFICATION INSURANCE REQUIREMENTS STANDARD OF CARE CONCLUSIONS RISK MANAGEMENT TOOLS CAN HELP SURVEYORS MANAGE and AVOID CLAIMS ALTA SURVEYS HELP MANAGE RISK by ESTABLISHING REASONABLE STANDARDS and SCOPE of SERVICES CONTRACTS CAN EXPAND DUTIES ESTABLISHED UNDER COMMON and LEGISLATIVE LAW
