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Construction is a very risky business, for both the owner and the contractor. Part of the challenge is trying to place the risk in the hands of the party who can best manage that risk (see Table 2.1). That's why an owner hires a contractor to begin with—to shift the risks for the construction cost, time, quality, and safety to someone trained to manage them. Once the risks are identified, understood, and analyzed, proper allocations can be made for reasonable schedules, estimates, and management plans.

Table 2.1 Risks Allocation Table

Type of Risk	Responsible Party
Contractor	Owner	Designer
Site conditions		X
Weather conditions	X
Project funding		X
Subcontractor failure	X
Job site safety	X
Material deliveries	X
Quality of the work	X		X
Delays in the work	X	X
Defective design			X
Defective work	X
Code compliance	X		X
Estimate errors	X
Labor strikes	X