Risk Management and Liability Flashcards

In a qualitative risk assessment for an engineering project, risks are typically evaluated based on which two dimensions?

Answer: Probability of occurrence and severity of impact

Qualitative risk assessment evaluates risks on a matrix of probability (likelihood of occurrence) and impact (severity of consequences), allowing prioritisation of risks requiring mitigation.

An engineering firm's risk register identifies that a major subcontractor is likely to become insolvent during a project. Which risk response strategy best addresses this risk?

Answer: Require the subcontractor to post a performance bond and payment bond before commencing work

Performance and payment bonds transfer the financial risk of subcontractor insolvency to a surety company, which guarantees completion of the work and payment of sub-subcontractors and suppliers if the bonded contractor defaults.

Which principle in risk management holds that it is better to prevent failures than to detect and correct them after they occur?

Answer: The prevention over detection principle (or 'prevention is better than cure')

Prevention-oriented risk management reduces failures before they occur, which is typically more cost-effective and protects safety more reliably than relying on detection and correction after failures happen.

Under Canadian tort law, which type of liability does not require proof of negligence or fault?

Answer: Strict liability

Strict liability imposes liability on a party regardless of fault or negligence — the mere fact of causing the harm is sufficient. It applies in specific contexts such as ultra-hazardous activities or under certain statutes.

What is a 'risk register' in project risk management, and what information does it typically contain?

Answer: A living document recording identified project risks, their probability, impact, risk response plans, and assigned owners

A risk register is a dynamic project management tool that captures identified risks, their analysis (probability, impact), planned responses, and the person responsible for managing each risk.

Which statement best describes 'residual risk' in engineering risk management?

Answer: The risk remaining after risk response measures have been implemented

Residual risk is the level of risk remaining after risk responses (avoidance, transfer, mitigation, acceptance) have been implemented. Some level of residual risk always remains and must be accepted or managed with contingency.