TOPICAL REPORT

ANALYSIS OF RISK
RISK ASSESSMENT is a scientifically based process of evaluating hazards and the likelihood of exposure to those
hazards, and then estimating the resulting impact. It provides a scientific framework for understanding the impact of a wide variety of variables by considering several key questions, such as:

• What are the factors that result in risk to operate?
• What is the likelihood?
• How much loss could occur?
• How much can that loss be reduced by various intervention strategies?

Risk assessments may be qualitative, semi-quantitative, or quantitative. Qualitative assessments usually identify a high, medium, or low level of risk. Semi-quantitative assessments
• Construction of fireproof walls to segregate potential fire risk areas.
• Construction of escape routes/exits and access for fire firefighting.
• Wearing proper personal protective equipment (i.e. hardhat, goggles and gloves).
• Use of proper tools and equipment.
• Storage of empty or compressed gas cylinders with an approved chain or webbing.
• Empty and full cylinders should be stored in separate areas or be separated by a firewall.

Cylinders in use shall be properly secured in an upright position and shall be transported only on cylinder carts.
No electrical work should be performed “hot” when it can be done “cold”. All electrical equipment should be periodically

MANAGING RISKS AT CONSTRUCTION SITE - PART II - ANALYSING RISK (CONCLUDED)

may be used to prioritize risks in relation to one another. Quantitative assessments are often used to identify and
evaluate safety control points or estimate the benefits of various intervention strategies.

RISK CONTROL MEASURES: Risk control is the process of implementing measures to reduce the risk associated with a hazard. It is important that control measures do not introduce new hazards, and that the ongoing effectiveness of the controls is monitored.

After careful study of the risks identified and assessed for potential vulnerability in achieving the desired goals of timely completion of the project, the following decisions may be taken:
Reduce the Risk (Physical Risk Improvement measures)
• Retain the Risk
• Transfer the Risk

Reduce the Risk (Physical Risk Improvement Measures) There are many measures based on scientific and engineering research suggested to minimize impact of the risks at construction sites. Some of them, common to most of the construction sites are listed below: inspected. Spliced or damaged electrical cords shall not be
used until properly repaired.

Electrical cords on power tools and extension cords shall have heavy-duty rubber insulation. In case of fire or smoke inside building - nearest fire alarm pull box should be used. Make available appropriate number and type of fire extinguishers as per class of fire.

• Class A - wood, paper, grass, and cloth
• Class B - grease, oil, flammable liquids
• Class C - energized electrical equipment

Sources of ignition, such as cigarettes, matches, portable heating equipment, unguarded light bulbs etc., must be
prohibited in areas where explosives, flammable liquids or gases, or other combustibles exist. (i.e., near chemical exhaust outlets, flammable liquid storage areas, sump pump areas, and refueling areas)

• Always obey “No Smoking” signs.
• Never check for possible natural gas leaks with an open flame.
• Flammable liquids shall be kept in approved safety cans. These containers shall be clearly labeled and stored in a separate, protected area.
• Rags that contain oils or solvents shall be kept in covered metal containers until they can be safely disposed of.
• Supervisors shall allow only properly trained employees to operate power equipment or machinery.
• Welding and cutting operations shall be performed only by authorized personnel under proper supervision.
• Work Area Housekeeping should be maintained.
• Regular inspection of weight lifting equipment like cranes hoists etc.
• Proper training of site personnel for evacuation procedures.
• Site personnel should be assigned duties for installing and maintaining fire fighting facilities.
• Provide 24-hour security on site by locked gates, and nightly rounds.
• Appoint right people.
• Allow adequate time.
• Provide information to team.
• Ensure effective communication among the team members.
• Ensure suitable management arrangements.
• Ensure adequate welfare facilities at site.
• Special caution for using combustible insulation and sealing material or adhesives.

Retain the Risk: Some of the risks are retained by owners/ contractors because either these are rated low (less vulnerable) like regular maintenance costs and considered retainable or seem to be very expensive to transfer; best example would be terrorism.

Transfer of Risks: Once it is decided to transfer risk, many options are available. Various financial products (e.g. insurance) are available to take care of most of the risks associated with construction site.

INSURANCE AS RISK TRANSFER VEHICLE: The commonly available insurance polices to take care of constructional risks are:

• Contractors/Erection All Risks Insurance
• Basic Covers
• The following basic coverage is available under standard Contractors/Erection All Risks insurance:
• Material damage of property under construction
• Damage to Existing Property
• Material/s at site for construction
• Plant and Equipment at site
• Third party risks due to construction at site

Extensions of basic cover: The following additional coverage may be purchased under standard Contractors/Erection All Risks insurance:

• Coverage for maintenance period
• Cover for design failure/fault
• Manufacturer’s risk
• Trial tests
• Loss of future earning/profits (ALOP)
• Contractors Plant and Machinery
• Marine/Transit Risks

Perils: The following perils are covered under standard Contractors/Erection All Risks insurance:
Fire/Lightning, Riots/Strike/Civil Commotion, Natural Calamity (like earthquake, flood, tsunami, landslide etc.)
Theft, Etc. etc.,

Other insurances available for Construction/Erection Site Workmen Compensation (life), Personal Accident/Health
Insurance (life/health), Professional Indemnity (consultants/ contractors liability), Contractors Plant and Machinery Terrorism, Third Party Liability

The author is head of Engg and Risk Management Dept at New Jubilee Insurance Company Ltd. Karachi. For further details, contact may be made at kmerchant@nji.com.pk

CAN YOU DESCRIBE TO US YOUR AVERAGE WORKING DAY.
On an average I work 12-14 hours a day and do not leave the office till my work for the day is complete. On an average day I first visit my clients, then arrive at the office around 12 noon. Then I attend to desk jobs. Lunch I take with my officers as this gives me an opportunity to talk to them informally and develop a good working
relationship with them. I am proud of my excellent team and it is because of them that LSU-V has written Rs 140.000 million premium in 2008. Throughout the day it is an open-door policy and officers come and talk to me regarding progress on assignments given to them or any problems they are facing. I leave the office around 7 in the evening and then catch-up on those clients who are available later in the day. Experience has proven that it is the best time to collect premium cheques because the ‘seth’ and the employee are both present.

WHAT ARE THE MOST INTERESTING ACTIVITIES OF YOUR JOB?
Developing customer relationship which we all know is a major contributor to success in the service sector. I will add that in developing this, I have also learnt a lot about the business of my clients and understanding it has given me an advantage too.

WOULD YOU RECOMMEND INSURANCE AS A PROFESSION TO SOME ONE AND IF SO WHY.
On the marketing side of insurance business there is wide scope and financial benefit, but it demands good people skills, self-confidence and patience. Also, willingness to work long hours. If a young person is willing to work hard and persistently he can be a success and prosper. Office job, on the other hand, can be routine job with regular hours. However if one is to progress in this job he needs to make contact with clients and meet them and service
them. I am proud to say that I joined NJI as a junior clerk in 1985 and have risen to be senior vice president. This should give hope to those intending to be insurance professionals.

WHAT AREAS OF INSURANCE BUSINESS NEED IMPROVEMENT AND WHO DO YOU THINK CAN BRING THE IMPROVEMENTS.
I think there is lot of scope for growth of insurance in Pakistan. Agriculture insurance with help of banks can be real service to the farmers. Health insurance can also sell quite well if we put our minds to it. There is also lot of untapped personal lines business. Honest and dedicated effort of our marketing officers can bring improvement in our industry is my opinion.

WHAT ARE YOUR INTERESTS OUTSIDE THE OFFICE?
“Talim” and “tarbiat” (nurturing and education) of my 4 children. By grace of Allah my eldest is studying in UK and has completed ACCA and is going on to do MBA. My elder daughter is doing BA Honours and younger daughter SSC from Kannaird College, whereas my youngest son is doing O Level. In addition to this, I give full attention to my mother who has been paralysed since three years. Every evening I spend time with her and always have breakfast with her. It is my belief that it is my mother’s blessings that have taken me far in my career. Our family
values are very dear to me and happily my wife gives me full support in the time and attention I give to my mother.

WHAT IS YOUR FAVOURITE QUOTATION?
Honesty is the cornerstone of all success, without which confidence and ability to perform shall cease to exist.

WHAT DOES SUCCESS MEAN TO YOU
Professional satisfaction.

 BRANCH PERFORMANCE

AN OFT HEARD QUESTION but fact of the matter is that a degree cannot get you a job or a promotion. In itself, a degree is basically just a piece of paper.

The change in your behaviour through acquired Knowledge, Skills and Abilities, abbreviated as KSAs, that gets you a particular job or promotion. Some people even after obtaining several degrees fail to acquire the requisite change in behaviour.

Employers may encourage staff to get higher or professional qualification and employees eagerly pursue these
qualifications in whichever manner they possibly can and then await their promotion letters. Sadly, those letters never materialise because although the employee has the pre-requisite degree or qualification, he fails to accompany it with the more critical behavioural change.

We often say “Knowledge is power” but then there is lot of knowledge in this world but very few powerful people. This is because applied knowledge is true power.

Do not waste your time and money if you only plan to get a degree or a qualification without a plan to apply the acquired knowledge.

(Source: “Workplace Sanity” by Rahila Narejo in the Sunday DAWN)