Insurance is something we think about naturally for our homes, cars and even our lives. But should you be considering it on your project too?
Insurance is a risk response strategy to help you mitigate the impact of what might go wrong on your project. Typically, we do talk about positive and negative risk, and while I’m sure you could probably find a firm to insure you against positive risk, you are far more likely to consider insurance as a support strategy for negative risk.
What could you insure?
Through a broker, you can pretty much insure against anything. However, organising specialist, one-off insurance for a very specific, unique, circumstance is potentially a lot of work (and expense) so you would only want to do that if your project was large enough to support that effort.
However, you can more easily insure a range of other, more ‘regular’ things on your project. For example, event cancellation due to poor weather or low attendance rates. In this situation, you’d get a pay out from the insurance if you had to cancel the cycle race you’d organised (for example). This would help you offset the costs you had incurred organising the cycle race, like catering vans, first aid teams, water for the cyclists, security and so on – all costs you’d still have to pay because you’ve booked them and probably can’t cancel them with such short notice.
Another type of insurance to consider for your project team is travel insurance. If your team is travelling a lot for work, it would be worth checking that your company offers insurance for employees travelling for business.
This would cover them if they lost their laptop or other work items while away for business. It could also help cover the costs of travel arrangements if their flights were cancelled, or they were unable to travel.
Other insurance for staff
If you are a sole proprietor or a small business owner – and many project managers do work independently as contractors or in small consulting firms – then it’s also worth considering other types of insurance that cover you and your team as individuals.
For example, in the UK you can get director’s insurance, that covers the business in the case that the director is unable to carry out their duties, say, due to illness.
You can also organise health insurance for the team. Depending on where you are in the world, healthcare costs can be really expensive. Insurance will help offset those costs, and help an employee get back on their feet (and back to work) more quickly.
I should add that I am not a financial advisor, and the points above are given simply to give you ideas of how to consider the part insurance could play in your business and on your project. If you don’t have anything set up yet for your team, it’s worth asking the question of your Finance team or Director. Get some proper advice from a financial advisor.
Think about whether insurance is a viable option for your risk mitigation strategies and if so, you may be grateful one day for having it set up!
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Risk management is so important when it comes to ensuring your project stays on track – both in terms of budget, which is what this column mainly talks about – but also in generally.
The graphic below shows the three levels of risk management to consider on your project (and beyond). If you aren’t working at the portfolio management level in your organisation, you can still take these into consideration because you can work with those who are managing your portfolio. Ask the right questions and help keep your project on track!
For more on this idea, check out this article.
The processes you have for project management – or lack of them – can add significant risk to your project. But you don’t often find them called out on the risk log.
Poor processes can add time delays, extra steps and confusion. They contribute to poor communication and overspending. They impact project quality. In short, processes that aren’t optimal can hinder your ability to deliver a decent outcome for the project.
Unfortunately, processes are often constrained by the company you are in. If you are mandated to follow certain processes, you have little flexibility to do anything about them. That’s not a good situation to be in – ideally you should be able to tailor the process to the size and complexity of your project.
I’ve highlighted three of the main process-related factors that influence risk on your project in the video below.
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The people in the project team, and the processes they use, are a risk factor to your project.
You might not have them on your risk register, but they definitely add risk.
For example: if you end up working with an inexperienced team, you’re in a more risky situation than one that’s highly skilled at the required work.
Poor processes across your organisation, or just in your team (say, people don’t apply the processes properly) can also add risk. A particular challenge, I think, is when projects are forced to use processes that can’t be appropriately tailored for the size of project. You get small projects forced to jump through governance hoops because that’s the process – even when it’s a ridiculous admin overhead. That adds risk to the project too.
Lack of people on the team is also a risk (one that is more likely than the other two to find its way to the risk register, in my view). You’re going to struggle to hit deadlines and delivery quality work if you don’t have enough people.
The risk profile of your project is hugely affected by the project team and the context in which you work. Unfortunately, you don’t always have a lot of control over those elements. You might find yourself being given project team members, instead of being able to pick the most able.
I’ve summarised this in the quick video below, which sets out three of the ways your project team and project environment can influence the risks faced by your project. Enjoy!
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Strategy plays a huge part in whether or not your project is going to be a success. Yes – things decided way above your pay grade influence the outcomes of your project.
That happens through risk. The corporate approach to strategy (or lack of it) massively shapes how your project is going to be carried out, implemented and delivered. The framework in which your project is being managed is of course influential – I’d say it was one of the enterprise environmental factors that shapes how you need to act on the project.
The risk profile of your project changes depending on your project’s context. A project in my company will have different outcomes to the same project (even if we hypothetically believed it would be delivered by the same project team) because the corporate approach to project management is different. The risk appetite would be different.
Strategy brings risk to your project in numerous ways. I’ve called out three of the main strategic factors that influence risk on your project in the video below.
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