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Trigger: The site foreman drives the haul road each morning and decides whether the haul road is safe for haul trucks Risk: Weather makes the haul road impassable. Each response plan should have at least one trigger condition. Trigger conditions ensure that project stakeholders do not question why a response plan was implemented. The four risk response strategies can be applied to overall project risk as well. Risk acceptance can be passive, whereby the consequences are dealt with after the risk occurs, or active, whereby contingencies (time, budget, etc.) are built in to allow for the consequences of the risk to the project. Accepting risk is a strategy like any other, and should be documented and communicated like any other strategy.

Thus stakeholders, by definition, must accept certain risks. As a minimum, there is the risk that it does not accomplish its objective. This is not always possible and often comes with a price that must be balanced against the value of performing the mitigating action. Reduce the probability or impact of the risk.

Subcontracting a phase of the work can also transfer risk, but you must ensure the party is capable of handling the risk better than you are. Indirect methods such as unit price contracts instead of lump sum (or vice versa depending on which side of the contract you’re on), legal opinions, and so forth. Direct methods might be through the use of insurance, warranties, or performance bonds. This involves moving the impact of the risk to a third party. Gain expertise to remove technical risks.Clarify requirements to eliminate ambiguities and misunderstandings.Extend the schedule to eliminate a risk to timely project completion.Here is a list of common actions that can eliminate risks. Eliminate the threat or protect the project from its impact. There are four possible ways to deal with risk. This article will cover the development of risk response plans. The first two steps have been covered here and here. Even when everything has been planned and executed to perfection, an unexpected event can cause considerable duress on the project stakeholders and even cause the project to be considered a failure.

Project risk management is what separates good project managers from great ones.