The federal government has conducted stress tests of financial institutions after lending billions of dollars in the Temporary Assistance Recovery Program (TARP). The main aim of the tests is to determine if banks can survive the economic downturn without additional capital. The idea is to avoid a repeat of the financial crisis that occurred last year when Lehman Brothers, Bear Stearns and other lenders went bust as a result of miscalculating their risk.
What is the impact from misjudging risk on the design and building industry? During a slow economy claims and litigation increase. The economic climate also is forcing companies to consider budget-cutting measures including layoffs, changing business decisions, operations and practices. It also increases a firm’s risk. Losses develop due to alleged negligence, error, omission and fraud thereby increasing professional lawsuits. Based on the heightened litigation, could your firm pass a stress test?
Just to survive and obtain work, many firms are changing practices, services, even lowering standards and bids. These decisions also are placing companies at higher risk. It is important firms realize where their risk lies. Architects, engineers, contractors and builders/developers should being asking themselves some targeted stress test questions.
- Has a realistic budget and schedule been established for completing this project?
- 您是否拥有成功竞争该项目的财务能力和现金流量？
- 是评估项目团队成员的惯例，包括：财务能力，经验，保险，过去的索赔历史，声誉等？
- If your gross revenue adjusts by greater than 20% has a formalized process been performed evaluating business practices ensuring effective operational performance?
- 如果人员职级调整超过20%a formalized process been performed ensuring proper levels of experience and qualified staff are maintained?
- 当扩展到新区域，项目类型或服务部门时，进行了适当的尽职调查分析（需要成功的资格和经验，法律和保险要求，许可要求，功能）？
- Do contracts or other agreements clearly outline; fees for basic services, additional services, billing and invoicing schedule, suspension and termination, limitation of liability, indemnification and mediation provisions?
- 在选择职业责任保险,do you look beyond premium costs evaluating carriers for financial strength, performance, outlook, policy provisions, experience, pre-claim & claims handling, risk management program?
CORBETT
Insurance Note: The economic downturn and financial problems has affected some insurance carriers. Firms should take wider protections including provisions in insurance contracts allowing cancellation in the event of an insurer's rating downgrade and a change in claims practices in the event of an insurer suffering financial problems.
回答压力测试问题的一种非常成功的方法是通过风险评估，其中包括对实践，业务运营和风险管理策略的深入分析。目的是评估通过缓解建议确定关注领域的风险，责任和漏洞。风险评估过程包括评估：经验和人员配备水平，财务能力，业务运营和实践，项目团队管理，项目管理以及合同和保险。如果公司正在改变业务策略或有索赔或索赔等。风险评估对于识别，减轻风险和改善绩效至关重要。当公司专注于风险管理时，自然的影响会提高整体绩效和盈利能力。这种“整体”风险管理方法有助于解决保护公司财务可行性的策略。
The economic crisis is forcing firms to change their operational profile and implement cost-cutting measures just to survive. It is extremely important to know your risks and exposures, as well as implement effective risk management practices moving forward. Properly implemented risk management strategies improve profitability and performance as well as mitigate risk. Risk assessments are excellent tools for stress tests.
