Which practice is part of risk management?

• A. Liability insurance.
• B. Overpaying vendors.
• C. Ignoring QAQC.
• D. Skipping contracts.

Answer: (A)

Liability insurance is a risk management tool because it transfers potential financial loss from the project to an insurer, providing coverage for claims that could arise from injuries, property damage, or other liabilities during construction. This is a proactive way to reduce financial risk and ensure the project can respond to unforeseen events. The other options do not manage risk: overpaying vendors wastes resources and increases exposure; ignoring QAQC removes safeguards that prevent defects and quality issues (a separate risk that escalates); skipping contracts removes essential protections and creates legal and compliance risk. So, liability insurance directly supports risk management.