The Main Contractor’s Action Plan for Commercial Risk

By

Nicholas Dunbar

Last Updated Jan 30, 2026

By

Nicholas Dunbar

For UK main contractors, managing risk protects project margins, rather than solely acting as a compliance exercise. Construction is an industry defined by thin profits and high liability, and a Construction Action Plan for risk is a vital barrier between a profitable project and one that erodes margin through delays and disputes.

This guide outlines a professional framework for creating and executing a risk management strategy that satisfies UK regulatory requirements (like CDM 2015 and the Building Safey Act), satisfies insurers, and ensures project resilience from pre-construction to handover.

Understanding the 5 Principles of Risk Management

An effective risk plan must be systematic. To move from identifying problems to implementing commercial solutions, your firm should structure its approach around the 5 Principles of Risk Management in Construction:

• Identify: Systematically catalogue all potential risks (financial, safety, operational, contractual).
• Analyse: Determine the potential the potential commercial exposure and the likelihood of occurrence.
• Evaluate: Prioritise risks, focusing resources on those with the highest combined impact and likelihood.
• Treat (Action): Develop specific mitigation and contingency steps for the prioritised risks.
• Monitor & Review: Continuously track the risk status and update the plan as the programme evolves.

Creating the Action Plan & Risk Register

The Risk Register is the foundation of your action plan. It is where you convert abstract concerns into assignable tasks.

1. Collaborative Risk Identification (The Risk Workshop)

Effective risk identification cannot happen in a silo. Main contractors should lead a collaborative risk workshop during the pre-construction phase. This ensures input is gathered from all parties:

• Design Team: Identifying design complexities or buildability risks.
• Supply Chain: Capturing practical risks related to installation or lead times from specialist subcontractors.
• Commercial Team: Flagging contractual exposure and liability gaps.

2. Prioritising and Attaching Actionable Steps

Once risks are logged, they must be assigned owners. This is the difference between identifying a problem and solving it.

• Prevention Actions: These are proactive tasks added to the contract programme.
• Contingency Actions: These are reactive backup plans for high-impact risks that cannot be entirely prevented. This includes allocating extra resources, such as designated budget buffers and programme float, specifically tied to the trigger event.

3. Financial Risk and Insurance Linkage

Your action plan is a key tool for financial resilience. Effective mitigation directly informs your liability exposure:

• Professional Indemnity (PI) Insurance: By clearly documenting the treatment of design-related risks, you demonstrate due diligence. This evidence is vital for defending your position in the event of a claim.
• Contractual Risk Transfer: The plan helps identify risks to transfer downstream (e.g., to the supply chain via contract wording, or insurers via specific policies). The plan should clearly detail which risks are retained by the main contractor and which are transferred.

Mandatory UK Compliance Needs The Safety Action Plan

For UK main contractors, the Health and Safety action plan is a legal requirement driven by the Construction (Design and Management) Regulations 2015 (CDM 2015).

Your risk plan must directly support the Construction Phase Plan (CPP), the legal document required before work commences on site. This component must include specific, auditable actions:

• Site Inspections and Audits: Schedules for regular safety audits and management sign-offs.
• Training and Competency: Actions to ensure all site personnel and subcontractors are inducted and hold valid competency cards (CSCS/CPCS).
• RAMS (Risk Assessment and Method Statements): Protocols for the creation, review, and distribution of task-specific RAMS before high-risk activities begin.

By embedding these actions, you satisfy your statutory duties as the Principal/Main Contractor.

Strategic Action Plans for Modern Challenges

Beyond site safety, modern construction demands specialised action plans for systemic commercial risks.

Action Plan for Supply Chain Management

Global instability requires a comprehensive procurement strategy. Your action plan should include:

• Supplier Relationships: Strengthening relationships with key suppliers to secure availability of critical path materials.
• Contract Clauses: Incorporating appropriate clauses into procurement contracts to manage material price fluctuations or labour shortages, ensuring financial risk is shared.
• Real-Time Monitoring: Establishing a formal schedule for monitoring supply chain solvency and lead times that could impact the programme.

Action Plan for Subcontractor Performance

Subcontractor insolvency is a high-impact risk in the current market. Your plan must include monitoring actions:

• Pre-Qualification: Conducting thorough financial and operational due diligence before contract award.
• Early Intervention: Establishing criteria for "health checks" on subcontractor progress and payment applications.
• Contingency for Default: A documented plan to quickly transfer the Works to a replacement firm to minimise programme slippage.

Organisational Maturity and Technology

The most successful contractors use technology to transform risk management from an administrative burden into an operational advantage.

Implementing a Project Risk Management (PRM) System

A reliable PRM system moves risk management beyond a single project spreadsheet. This involves:

• Standardisation: Using templated Risk Registers that are consistent across all projects, streamlining commercial reviews.
• Centralisation: Ensuring all risk data and mitigation steps reside in one central hub rather than siloed emails.

Technology as the Risk Control Hub

Modern project management software provides the real-time insights necessary for a proactive plan:

• Real-Time Forecasting: Technology stores historical data and "lessons learned" from previous projects, informing the tender process for new work.
• Data-Driven Review: This holistic approach allows your firm to monitor and adapt, ensuring the action plan remains effective throughout the entire project lifecycle.

The Risk Mitigation Action Plan is the strategic tool that protects a main contractor's financial health and reputation. Integrating the Risk Register with CDM compliance and technology ensures active risk control.

Written by

Nicholas Dunbar

Content Manager | Procore

65 articles

Nick Dunbar oversees the creation and management of UK and Ireland educational content at Procore. Previously, he worked as a sustainability writer at the Building Research Establishment and served as a sustainability consultant within the built environment sector. Nick holds degrees in industrial sustainability and environmental sciences and lives in Camden, London.

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