Lecture 1: Introduction To Risk And Uncertainty PDF

1 LECTURE 1 (Part 1) INTRODUCTION TO RISK AND UNCERTAINTY Construction Risk and Safety BTQS3103 Management  Syllabus Content - Week 1 2 Introductio...

1 LECTURE 1 (Part 1) INTRODUCTION TO RISK AND UNCERTAINTY Construction Risk and Safety BTQS3103 Management  Syllabus Content - Week 1 2 Introduction to Risk and Uncertainty Risk and uncertainty Degree of risk Measurement of risk Peril and Hazard Risk Classification  What is Risk? 3 1. Risk refers to the uncertainty or probability of an event occurring that could have either positive or negative consequences. 2. In the context of business and finance, risk is often associated with the potential for financial loss or failure to achieve objectives. 3. Risk is inherent in all aspects of life and business, representing the uncertainty and potential for both positive and negative outcomes. 4. This definition has been chosen because it contains six key aspects which are common elements in all definitions of risk: a) Uncertainty b) Probability c) Impact d) Duality e) Subjectivity f) Dynamic  Key Aspects of Risk 4 1. Uncertainty: Risk arises from uncertainty about the future, where outcomes are not certain and may vary from what is expected. This uncertainty can stem from various factors, including market fluctuations, changes in regulations, technological advancements, natural disasters, or human behavior. 2. Probability: Risk involves the likelihood or probability of different outcomes occurring. Some risks are more probable than others, and understanding the probability of various outcomes is essential for assessing and managing risk effectively. 3. Impact: Risks can have varying degrees of impact, ranging from minor inconveniences to catastrophic losses. The impact of a risk depends on factors such as the magnitude of the event, the vulnerability of the organization or individual, and the effectiveness of mitigation measures in place.  This slide is intentionally left BLANK 5 This slide is intentionally left BLANK to encourage students to attend this lecture.  Key Aspects of Risk 6 1. It is evident that risk is a condition of the real world and is a combination of circumstances that exist in the external environment. 2. Also, because there is only the possibility of a loss, the probability of a loss actually occurring is between 0 (impossible) and 1 (definite); that is, risk is neither definite nor impossible. 3. There is no requirement that the possibility be measurable, only that it exists and the probability of the loss occurring be between 0 and 1. 4. For example, death is a condition with a probability of 1 (p = 1), because it is 100% certain that everyone will eventually die, thus there is no risk of death.  What is Uncertainty? 7 1. Uncertainty refers to the lack of certainty or predictability about future events, outcomes, or conditions. - It is a fundamental aspect of decision-making and arises when there is incomplete information or when outcomes are subject to variability or ambiguity. 2. Examples of sources of uncertainty include economic conditions, technological advancements, regulatory changes, geopolitical events, natural disasters, and human behavior. - Uncertainty permeates various domains, including business, finance, science, politics, and everyday life, influencing decision-making processes, strategies, and outcomes. 3. Effective decision-making in the face of uncertainty often involves techniques such as scenario planning, sensitivity analysis, Monte Carlo simulation, and expert judgment, as well as strategies for managing risks and building resilience to unexpected events. - Acknowledging and embracing uncertainty as an inherent aspect of decision-making is essential for navigating complexities, seizing opportunities,  Key Aspects of Uncertainty 8 1. Incomplete Information: Uncertainty often arises when decision-makers lack complete information about a situation, event, or phenomenon. This could be due to limitations in data availability, reliability, or accuracy, making it difficult to make confident predictions or assessments. 2. Variability: Uncertainty can stem from variability in outcomes or conditions, where multiple possible outcomes exist, each with its own likelihood of occurrence. This variability can result from factors such as randomness, complexity, or the influence of multiple interacting variables. 3. Ambiguity: Uncertainty can also arise from ambiguity or lack of clarity about the meaning, interpretation, or implications of available information. Ambiguity can lead to differing perceptions or understandings among stakeholders, making it challenging to reach consensus or make decisions confidently.  Key Aspects of Uncertainty 9 4. Risk vs. Uncertainty: While risk involves uncertainty, it typically refers to situations where the probabilities of different outcomes are known or can be estimated. In contrast, uncertainty encompasses situations where probabilities are unknown or difficult to quantify, making it more challenging to assess and manage. 5. Dynamic Nature: Uncertainty is dynamic and can change over time in response to new information, events, or actions. As a result, decision-makers must continually monitor, assess, and adapt to evolving uncertainties to make informed decisions and mitigate potential risks.  This slide is intentionally left BLANK 10 This slide is intentionally left BLANK to encourage students to attend this lecture.  Key Differences between Risk and Uncertainty 11 3. Quantifiability: ▪ Risk involves situations where outcomes can be quantified or measured in terms of probabilities, expected values, or potential losses. ▪ Uncertainty encompasses situations where outcomes cannot be easily quantified or measured due to incomplete information, variability, or ambiguity. 4. Nature: Risk is typically associated with variability in outcomes, where multiple possible outcomes exist, each with its own probability of occurrence. Uncertainty encompasses both variability and ambiguity, where outcomes may be subject to randomness, complexity, or lack of clarity.  Key Differences between Risk and Uncertainty 12 5. Manageability: Risk can be managed through various risk management techniques, such as risk assessment, mitigation, and transfer, aimed at reducing the likelihood or impact of adverse outcomes. Uncertainty may be more difficult to manage, as it involves situations where probabilities are unknown or difficult to quantify, requiring strategies for coping with unpredictability and adapting to changing conditions. 6. Examples: Examples of risk include market fluctuations, credit default, investment volatility, and project delays, where probabilities and potential impacts can be assessed and managed. Examples of uncertainty include technological disruptions, geopolitical events, regulatory changes, and global pandemics, where probabilities may be unknown or difficult to determine, leading to increased unpredictability and complexity.  At a Glance - Summary 13 1. Risk has existed in various forms since the dawn of time. 2. Risk is a possible adverse deviation from expectations. 3. The term ‘‘risk’’ is used to identify the person or property exposed to loss. 4. The probability of an adverse deviation from an expected outcome indicates the presence of risk. 5. The probability of a loss occurring is between 0 and 1. 6. Risk creates uncertainty about future events when risk is recognised. 7. Uncertainty is subjective while risk is objective. 8. Objective risk is measurable.  Measurement of Risk - Introduction 14 1. Risk is a condition where there is a possibility of an adverse deviation from an expected outcome. 2. In insurance terms, this definition implies a variation around an average expected loss. 3. Therefore, the greater the variation around this average, the greater the risk of an adverse deviation from what is expected. 4. This variability in possible outcomes implies that different situations will have ‘‘more risk’’ or ‘‘less risk’’ than others — ie there will be different degrees of risk in given situations.  This slide is intentionally left BLANK 15 This slide is intentionally left BLANK to encourage students to attend this lecture.  Measurement of Risk - Degree of Risk 16 6. In many situations, although the probability of loss is the same, the magnitude of the losses may be very different. 7. For example, if one risk had a potential loss of $500,000 and another had a potential loss of $50,000, assuming each had the same probability of loss, the former would be considered to involve more risk. 8. However, if the amount of the potential loss (exposure) is the same, the risk with the greater probability of loss would be considered the more risky. 9. We have introduced two terms used in the measurement of risk: the probability of loss and the size of the possible loss. 10. Tying these two terms together introduces the concept of the expected value of a loss, EV = P × S, where EV = the expected value of the loss, P = the probability of loss, and S = the size of the possible loss.  Measurement of Risk - Degree of Risk 17 11. What we have discussed above is an introduction to the law of large numbers, which is the principle on which insurance in society is founded. 12. The law of large numbers is a mathematical principle that states that the greater the number of observations of an event based on chance, the more likely the actual result will approximate the expected result. 13. Suppose an insurance company’s historical statistical records indicated that the company could expect 1% of the houses in its domestic portfolio to burn. The law of large numbers states that the greater the number of houses insured by the company, the more likely it is that the 1% will be achieved. This allows an insurance company to accurately predict the dollar amount of losses it will experience in a given period, although the insurer still faces some risk or volatility around the average.  At a Glance - Summary 18 1. An important aspect of risk relates to its variability of outcomes. 2. Variability implies different degrees of risk in given situations. 3. Insurance companies use the degree of risk to discover factors that will either increase or decrease the frequency or severity (or both) of loss. 4. Insurance companies keep detailed statistical records of past losses and thus are able to predict future losses fairly accurately. 5. Because predictions cannot be 100% accurate, the statistician will estimate a range of error. 6. Risk is measured by a statistical concept called standard deviation, which indicates more or less risk. 7. The magnitude of a loss can also be an indication of risk. 8. The expected value of a loss is the product of the probability of loss and the size of the expected loss.  Risk Versus Perils Versus Hazards - Introduction 19 1. Perils are the immediate causes of loss. 2. If your house is destroyed by fire, the peril, or cause of the loss, is the fire. 3. If your car is damaged in a collision with a tree, collision is the peril, or cause of loss. 4. We are surrounded by potential loss because the environment is filled with perils such as fire, flood, windstorm, hail, theft, death, sickness, accidents or lightning.  This slide is intentionally left BLANK 20 This slide is intentionally left BLANK to encourage students to attend this lecture.  Common Types of Perils 21 1. Natural Perils: These are events caused by natural forces or phenomena, such as: Natural disasters: Including earthquakes, floods, hurricanes, tornadoes, wildfires, tsunamis, and volcanic eruptions. Weather-related events: Such as storms, hailstorms, lightning strikes, and heavy snowfall. 2. Man-Made Perils: Events caused by human activities or negligence, such as: Accidental damage: Including fires, explosions, vehicle collisions, and industrial accidents. Intentional acts: Such as vandalism, theft, burglary, fraud, and malicious damage. Civil unrest: Including riots, strikes, protests, and acts of terrorism. 3. Economic Perils: These are events related to economic factors and financial markets, such as: Economic downturns: Including recessions, depressions, and market crashes. Inflation and currency fluctuations: Which can affect the value of assets and investments. Interest rate changes: Which can impact borrowing costs, investment returns, and financial stability.  Examples of Natural Perils 22  Examples of Human Perils 23  Common Types of Perils 24 4. Liability Perils: These are events involving legal liability and potential lawsuits, such as: Bodily injury: Including accidents, injuries, and medical expenses. Property damage: Including damage to third-party property or assets. Legal expenses: Including costs associated with defending against lawsuits and legal claims. 5. Health Perils: These are events related to personal health and well-being, such as: Illness and disease: Including infectious diseases, chronic conditions, and pandemics. Accidents and injuries: Including slips, falls, sports injuries, and medical emergencies.  This slide is intentionally left BLANK 25 This slide is intentionally left BLANK to encourage students to attend this lecture.  Classification of Risk 26 1. Because risk can be classified in many different ways, it is important that we understand the differences and how they relate to insurance. 2. These classifications include: financial and non-financial risks dynamic and static risks pure and speculative risks, and fundamental and particular risks. 3. Financial risk refers to those situations that involve financial consequences such as changes in commodity prices, interest rates, foreign exchange rates and the value of money. a) For example, a farmer who agrees to sell grain for a fixed price in six months may lose money if the price of grain were to increase. b) Furthermore, in some situations, risk results in financial loss, such as the loss of property through peril of fire, and in other situations  Classification of Risk 27 4. Non-financial risk refers to such factors as meeting community expectations (social), environmental impact and cutting greenhouse gas emissions (environmental), and compliance with local laws and international conventions (legal). a) While these factors may impact on the successful operation of a company or project and need to be taken into consideration by management, they are not matters that result in a financial loss, as caused by a peril such as fire. 5. Dynamic risks are risks resulting from changes in the economy. a) Changes in technology, price levels, consumer tastes, income and production may cause financial loss to members of the economy. b) Generally, these dynamic risks benefit society over the long run because they result in adjustments to correct the misallocation of resources. c) These risks are not predictable, as they do not occur with any degree of regularity.  Classification of Risk 28 6. Static risks are risks that occur independently of economic changes. a) These losses generally result from natural perils and dishonesty of individuals. b) Unlike dynamic risks, static risks do not benefit society, as they involve destruction of assets or result from human failure. c) Static losses are generally predictable because they occur with a reasonable degree of regularity. d) Because of this predictability, static risks are generally insurable, while it is difficult to insure dynamic risks. 7. Pure risk refers to those situations that involve only the possibility of loss or no change in condition. a) With pure risks, the only possible outcomes are adverse (loss) and neutral (no loss). b) Examples of pure risk include damage to property caused by fire, lightning, flood or earthquake; job-related injury; premature death;  Classification of Risk 29 8. Speculative risk refers to a situation where there is the possibility of a loss but also the possibility of a gain. a) While there is the possibility of a break-even position, this is generally considered a loss, as a speculation is made with the intention of making a gain. b) Entrepreneurs who start up e-commerce companies also face speculative risk as they assume considerable risk in the hope of developing a successful business and making a gain 9. A fundamental risk is a risk that affects the entire economy or large numbers of individuals or groups within the economy. a) The resulting losses are impersonal in origin and consequence and are caused mainly by economic, social and political phenomena. b) Examples include war, rapid rises in inflation and cyclical unemployment, because large numbers of people are affected. c) Fundamental risks are caused by circumstances largely beyond the control of the individuals who suffer the losses.  This slide is intentionally left BLANK 30 This slide is intentionally left BLANK to encourage students to attend this lecture.  Classification of Pure Risk 31 1. We face countless risks in our daily lives and in business, but for the most part they are static risks. a) For someone managing risk, it is essential that they know the characteristics of the underlying potential losses. b) These can be described in terms of exposures, perils and hazards. 2. Exposure is used to describe the property or person facing a condition in which loss or losses are possible. a) For example, a business is exposed to the perils of fire, storm, burglary, etc, while a person is exposed to the perils of accidental death, injury or illness.  Classification of Pure Risk 32 3. Classifying pure risks begins by putting them into broad types of exposures that are not mutually exclusive and may overlap. a) Pure risks may cause an individual, family or business to be faced with such exposures as personal loss exposures, property loss exposures, liability loss exposures, catastrophic loss exposures, accidental loss exposures or failure to perform loss exposures. 4. Pure risks can be classified as: personal property – direct loss, or – indirect loss (or consequential), or liability – failure to perform.  Risk and Loss at a Glance 33 1. There is no single definition of risk. Risk historically has been defined as uncertainty concerning the occurrence of a loss. 2. A loss exposure is any situation or circumstance in which a loss is possible, regardless of whether a loss occurs. This term is often used as a substitute for “risk,” which is an ambiguous term. 3. Objective risk is the relative variation of actual loss from expected loss. 4. Subjective risk is uncertainty based on an individual’s mental condition or state of mind. 5. Chance of loss is defined as the probability that an event will occur; it is not the same thing as risk. 6. Peril is defined as the cause of loss. 7. Hazard is any condition that creates or increases the chance of loss.  Risk and Loss at a Glance 34 8. There are four major types of hazards. a) Physical hazard is a physical condition that increases the frequency or severity of loss. b) Moral hazard is dishonesty or character defects in an individual that increase the chance of loss. c) Attitudinal hazard (morale hazard) is carelessness or indifference to a loss that increases the frequency or severity of loss. d) Legal hazard refers to characteristics of the legal system or regulatory environment that increase the frequency or severity of losses. 9. A pure risk is a risk where there are only the possibilities of loss or no loss. 10. A speculative risk is a risk where either profit or loss is possible.  This slide is intentionally left BLANK 35 This slide is intentionally left BLANK to encourage students to attend this lecture.  Risk and Uncertainty at a Glance 36 16. Systemic risk is the risk of collapse of an entire system or entire market in which the failure of a single entity or group of entities can result in the breakdown of the entire financial system. 17. The following types of pure risk can threaten an individual’s economic security: –– Personal risks –– Property risks –– Liability risks 18. Major personal risks include the following: –– Premature death of family head –– Inadequate retirement income –– Poor health –– Unemployment –– Alcohol and drug addiction  Risk and Loss at a Glance 37 19. A direct loss to property is a financial loss that results from the physical damage, destruction, or theft of the property. 20. An indirect, or consequential, loss is a financial loss that results indirectly from the occurrence of direct physical damage or theft loss. Examples of indirect losses are the loss of use of the property, loss of profits, loss of rents, and extra expenses. 21. Liability risks are extremely important because there is no maximum upper limit on the amount of the loss; a lien can be placed on income and assets to satisfy a legal judgment; and substantial court costs and attorney fees may also be incurred. 22. Business firms face a wide variety of major risks that can financially cripple or bankrupt the firm if a loss occurs. 23. These risks include property risks, liability risks, loss of business income, crime risks, and certain other risks.  Risk and Loss at a Glance 38 24. Risk entails three major burdens on society: –– The size of an emergency fund must be increased. –– Society is deprived of needed goods and services. –– Worry and fear are present. 25. Risk control refers to techniques that reduce the frequency or severity of losses. Major risk-control techniques include avoidance, loss prevention, loss reduction, duplication, separation, and diversification. 26. Risk financing refers to techniques that provide for the funding of losses after they occur. Major risk-financing techniques include retention, noninsurance transfers, and insurance.  Hazard and Risk in Construction [from Guidelines for Hazard Identification, Risk Assessment and Risk Control (HIRARC) 2008 issued by DOSH] 39 1. Hazard: a source or a situation with a potential for harm in terms of human injury or ill health, damage to property, damage to the environment or a combination of these. 2. Risk: a combination of the likelihood of an occurrence of a hazardous event within specified period or in specified circumstances and the severity of injury or damage to the health of people, property, environment or any combination of these caused by the event.  HAZARDS IN CONSTRUCTION 40  Basic Terms on Safety 41 1. Safety means being protected from the event or from exposure to something that causes life, health or economical losses. (Purpose of Safety) 2. Safety also refer to the control of recognized hazards and all measures and practices taken in order to achieve an acceptable level of risk to life, health, and bodily integrity of individuals and properties. (Activities of Safety) 3. Safety means a complete understanding of your work and knowledge of every step that must be taken and the realization that mistakes could be costly to yourself and to the company. (Working safely)  Basic Terms: Accident and Incident 42 Definitions in MS1722 1. Incident: A work-related event in which an injury or ill-health or fatality or damage to property or both could have occurred 2. Accident: An incident which has given rise to injury, ill health or fatality or damage to property or both [Note: based on definition 1 above] 3. Near miss: An unsafe occurrence arising out of or in the course of work where no human injury or ill health, damage to property, damage to the environment is caused.  Basic Terms: Injury 43 Serious Bodily Injury is defined in First Schedule [subregulation 5(1)] of Occupational Safety And Health (Notification Of Accident, Dangerous Occurrence, Occupational Poisoning And Occupational Disease) Regulations 2004  Construction Hazards 44 work at height machinery/equipment work in confined electrical space/suffocation radiation slip/trip/fall biological vehicles ergonomic problem falling materials chemical/toxic heat/cold substance noise/vibration psychological fire/explosion river/sea  This slide is intentionally left BLANK 45 This slide is intentionally left BLANK to encourage students to attend this lecture.  What Causes Accidents? 46 1. Accidents are the direct results of unsafe activities and conditions. Unsafe acts and unsafe conditions are often referred to as immediate or primary causes of accidents, because they are the most obvious causes and because they are usually directly involved or present at the moment the accident happens. Unsafe acts or unsafe Hazard + = Accident conditions  What Causes Accidents? - Unsafe Acts 47 ▪ Working without authority ▪ Failure to warn others of danger ▪ Leaving equipment in a dangerous condition ▪ Using equipment at the wrong speed ▪ Disconnecting safety devices such as guards ▪ Using defective equipment ▪ Using equipment the wrong way or for the wrong tasks ▪ Failure to use or wear personal protective equipment ▪ Failure to lift loads correctly ▪ Being in an unauthorised place ▪ Unauthorised servicing and maintaining of moving equipment ▪ Smoking in areas where this is not allowed ▪ Drinking alcohol or taking drugs  What Causes Accidents? - Unsafe Conditions 48 ▪ Inadequate or missing guards to moving machine parts ▪ Missing platform guardrails ▪ Defective tools and equipment ▪ Inadequate fire warning systems ▪ Fire hazards ▪ Ineffective housekeeping ▪ Hazardous atmospheric conditions ▪ Excessive noise ▪ Not enough light to see to do the work  What Causes Accidents? - Management System Failure 49 1. Secondary causes of accidents are also important, although they are usually harder to seek out and identify. 2. They are the failures of the management system to anticipate, and include lack of training, information provision and supervision, lack of equipment maintenance, inadequate job planning and safe work instruction, and not having in place safe systems of work. Management Unsafe acts Hazard + system + or unsafe = Accident failure conditions  This slide is intentionally left BLANK 50 This slide is intentionally left BLANK to encourage students to attend this lecture.  Construction Hazards and Accidents 51 Hazard Unsafe Acts or Unsafe Conditions Accident Unstable Work before stability of slope checked by designated Buried under trench person falling earth Excavated material stockpiled at the top edge of trench equipment Disconnecting safety devices such as guards injury Using defective equipment such as those with missing guards Using equipment the wrong way or for the wrong tasks Unauthorised servicing and maintaining of moving equipment Machinery Failure to lift loads correctly Machine topples topples Failure to park on firm ground electrical frayed cords, missing ground pins, improper wiring, Contact with cover broken electricity- death Touching live wires or using faulty electrical tool or serious burn biological working with infectious insects, animals, people, plant, Health affected water or soil during demolition, renovation or sewer work  Construction Hazards and Accidents 52 Hazard Unsafe Acts or Unsafe Conditions Accident ergonomic when the type of work, body position and Health affected problem working conditions put strain on the body chemical/toxic Excessive exposure to asbestos, carbon Inhalation of toxic substance monoxide, welding fume, spray paint, cutting oil substances- health mists, solvents affected psychological Prolonged night duty, work stress, violence, Health affected harassment, bullying River / sea Not using personal protective equipment (PPE) drown No rescue provisions at site  Non Compliance with Safety Rules 53 Hazard Unsafe Acts Accident To enter site without registration / permission, or working without authority Not using required Personal Protective Equipment (PPE) correctly Employees not supplied with required PPE Not apply for / comply with confined space permit Working on edge of building without fall protection, not using full body harness at height Ignore safety signage Fighting, drinking alcohol, taking drugs or gambling Resting / sleeping under machinery Leaving equipment in a dangerous condition Using defective tools and equipment Failure to report incident/accident Not comply with safe work instruction / safe operating procedure  Non Compliance with Safety Rules 54 Hazard Unsafe Acts / Unsafe Conditions Accident No ventilation No fire prevention kits / equipment or first aid Poor housekeeping Machinery maintenance checklist not available Without proof of competency or machine certificate of fitness False documents / certificates Not enough light to see to do the work  Risk Classification for Hazards and Safety in the Construction Industry 55 1. Risk classification for hazards and safety in the construction industry involves categorizing potential risks to prioritize and manage them effectively. 2. This process helps construction managers, safety officers, and other stakeholders to identify which risks require immediate attention, allocate resources appropriately, and develop targeted mitigation strategies. 3. Risk classification for hazards and safety in the construction industry is a vital process that enhances the overall safety and efficiency of construction projects. 4. By systematically categorizing risks, construction companies can better manage hazards, ensure regulatory compliance, protect their workforce, and ultimately achieve successful project outcomes.  Risk Classification for Hazards and Safety - By Sources of Risk 56 1. Internal Risks Operational Failures: Risks arising from daily operations, such as machinery malfunctions or human errors. Workplace Practices: Unsafe practices, inadequate training, or non-compliance with safety procedures. 2. External Risks Environmental Factors: Natural disasters (earthquakes, floods), weather conditions (extreme heat, rain). Regulatory Changes: New laws or regulations impacting safety standards and practices.  Risk Classification for Hazards and Safety - By Nature of Risk 57 1. Physical Hazards Falls: Risks from working at heights, such as scaffolding or ladders. Struck-by Objects: Risks from moving equipment, falling objects, or debris. Caught-in/between: Risks of being caught in machinery or between heavy objects. Electrical Hazards: Risks from exposure to live wires or faulty electrical systems. 2. Chemical Hazards Exposure to Hazardous Substances: Risks from handling or being exposed to chemicals, asbestos, or other toxic materials. Respiratory Hazards: Risks from inhaling dust, fumes, or gases. 3. Ergonomic Hazards Repetitive Motion: Risks from repetitive tasks causing strain injuries. Manual Handling: Risks from lifting, carrying, or moving heavy objects improperly. 4. Biological Hazards  Risk Classification for Hazards and Safety - By Impact 58 1. Catastrophic Risks Severe injuries or fatalities, such as those resulting from major falls, collapses, or explosions. 2. Critical Risks Serious injuries requiring hospitalization, such as fractures or severe burns. 3. Moderate Risks Injuries needing medical treatment but not life-threatening, such as minor cuts or sprains. 4. Minor Risks Minor injuries or near-misses that do not require medical treatment.  Risk Classification for Hazards and Safety - By Likelihood 59 1. High Probability Risks Very likely to occur due to the nature of the job, such as minor cuts or bruises from handling materials. 2. Medium Probability Risks Moderately likely, such as occasional trips or falls from uneven surfaces. 3. Low Probability Risks Unlikely but possible, such as being struck by lightning while working outdoors.  This slide is intentionally left BLANK 60 This slide is intentionally left BLANK to encourage students to attend this lecture.  Risk Classification for Hazards and Safety - By Timeframe 61 1. Immediate Risks Immediate hazards requiring urgent attention, such as exposed live wires. 2. Short-term Risks Risks expected to occur within days or weeks, like temporary scaffolding issues. 3. Long-term Risks Risks that may develop over months or years, such as ergonomic injuries from repetitive tasks.  Benefits of Risk Classification in Construction 62 1. Prioritization: Enables construction managers to focus on the most critical and probable risks first. 2. Resource Allocation: Ensures that resources are allocated efficiently to mitigate the most significant risks. 3. Effective Mitigation: Facilitates the development of targeted safety measures tailored to specific types of risks. 4. Compliance: Helps maintain compliance with regulatory standards by identifying and addressing regulatory risks promptly. 5. Improved Safety Culture: Promotes a proactive safety culture by continuously identifying, assessing, and managing risks.  Implementation in Construction 63 1. Risk Assessments and Audits Regular risk assessments and safety audits help identify new risks and evaluate the effectiveness of existing controls. 2. Safety Training Continuous training programs ensure that workers are aware of potential hazards and know how to handle them safely. 3. Use of Technology Implementation of safety management software, wearables, and drones to monitor and mitigate risks in real-time. 4. Incident Reporting Systems Systems for reporting and analyzing incidents and near-misses to prevent recurrence and improve safety protocols.  THE END 64 Thank you for your attention  This slide is intentionally left BLANK 65 This slide is intentionally left BLANK to encourage students to attend this lecture.