Loss Prevention Crucial to Construction Projects, Says Insurance Expert
AVON, Conn. -- So what would you do? You have a group of VIP donors in for a tour of a state-of-the-art new research facility built with their donations. You have dozens of researchers and faculty members picking up and moving to a new city to begin work on an exciting new research project. You just learned your grant money may be in jeopardy if you can't start the project in the next six months. And you have a partially finished, state-of-the-art research facility with millions of dollars in damage from an underground fire that burned undetected for hours.
According to Mark Driscoll, Principal Consultant at the Global Asset Protection unit of GE Insurance Solutions, these nightmares can be avoided by implementing comprehensive loss prevention and control measures at the earliest stages of a construction project.
Says Driscoll: "Any university or business that implements the Principles of Highly Protected Risk (HPR) will be doing everything in its power to avoid and mitigate damage to construction projects central to an organization's growth."
Driscoll recently presented a scenario that confronted Harvard University at the 2006 Spring Training for Risk Managers conference sponsored by the University Risk Management and Insurance Association (URMIA). A highly specialized, environmentally controlled laboratory that was 80% complete suffered substantial damage to its specialized duct work when soot and other contaminates flooded the building. Harvard was faced with the choice of either cleaning the damage or rebuilding the facility.
Applying HPR principles at the design and specification phase of a construction project is crucial not only to ensure the blueprints meet HPR standards, but that the people involved in the project understand and appreciate the role HPR plays in constructing a safe building.
"Interacting with architects, engineers, and project managers is essential to early 'buy-in' among the decision makers," Driscoll said. "Architects must be directed to design buildings according to HPR principles, and project managers need to know that meeting HPR standards goes above and beyond the municipal building code."
Once construction is underway, Driscoll recommends regular visits to the job site to meet with project managers and contractors, and conducting an ongoing review of design implementation. Risk managers should be addressing several key issues.
"Forty percent of fires are from a suspicious or undetermined origin, so security guard services and alarms can go a long way," Driscoll reports.
Fire protection systems should be online as soon as possible. Normally, fire protection systems must be operational before a Certificate of Occupancy is issued, usually at the very end of a project. HPR dictates that system be operational before the external walls of a building project are complete.
"The opportunity for a fire loss exists long before the building is nearly complete," says Driscoll, "so fire protection is essential to safeguard against construction activities that create fire risks, like welding and grinding."
And just because construction is complete, that doesn't mean HPR principles are too.
Says Driscoll: "Things happen over the course of a building's lifetime that present new challenges -- they are eventually used for something other than what they were designed for, knowledgeable employees who understand a building's capabilities move on, and organizations begin to believe 'a fire can't happen to me!' Annual or semi-annual loss prevention reviews should be conducted to ensure these valuable assets continue to serve their organizations safely."