Many construction sites face the prospect of having to temporarily shut down as the coronavirus outbreak brings a halt to operations. In a new risk bulletin, Allianz Global Corporate & Specialty’s risk consulting experts provide an overview of some relevant loss prevention measures in such a scenario.
Work stoppages can occur on construction projects for several reasons including bankruptcy, principal’s insolvency (contractor not paid), the decision of public authorities, infectious disease – such as the current coronavirus outbreak – and natural disasters. “However, the potential for losses from events such as fires, vandalism and theft and flooding remains when sites are idle or largely unoccupied, and can even be exacerbated,” says Jay Siegel, Senior Team Leader, Energy and Construction Risk Consulting at AGCS. “To minimize project losses it is critical that actions are taken to protect the project.”
AGCS risk consultants highlight some loss prevention measures in the risk bulletin for construction sites forced to close including:
Maintaining site security
Prior to leaving the construction site to ensure that the project is secure as possible. If permanent security personnel cannot be provided, consider installing a video monitoring system to detect and alert in the event of intrusion, vandalism, theft and fire.
Safe storage of materials
Consider temporarily removing valuable building materials to a secure area if possible. Secure all packaging and materials that could be adversely impacted by weather (i.e. high winds). Remove, secure, isolate or neutralize chemicals to prevent their release or their reaction together if disturbed. Ensure all flammable liquids and gases are removed from the site where appropriate. To mitigate the risk of a fire loss, consider removing from the construction areas before vacating the site all paper and other combustible materials (wood, sawdust, trash, etc.).
Mitigating losses from equipment and machinery
It is critical that equipment and machinery are protected in the event of a work stoppage. Consider delaying the delivery of equipment to the job site until the project is resumed. For equipment already on-site, where appropriate, cover it with fire-resistive covers or suitable sheeting for added protection. Address the most critical equipment first when defining priorities for loss prevention measures. Measures of criticality include potential damage and potential delay (lead time of spares).
Make partially completed work/temporary structures safe
If possible complete portions of the work in such a way as to reduce rework and losses when the project resumes. For example, complete concrete placements to prevent cold joints; finish mud slabs as a means to cut off water from below foundations; complete temporary roof structures to prevent water damage, and complete/ or secure structural frames to prevent instability. Before leaving the site, consider having a structural engineer perform a visual inspection of works, evaluating the potential stoppage period.
Mitigating natural hazard risk
A stoppage could expose the project to seasonal events which were not anticipated, such as snow, hurricane-force winds, freezing, etc. Consider the consequences of these events on the uncompleted works and a full inspection of the worksite to prevent the risk of water intrusion. Excavations and trenches also pose risks. Consider adjusting the slope of excavation to prevent sloughing/collapse from heavy rainfall while deep excavations should be protected to prevent water infiltration resulting in geotechnical instability. If needed, consider refilling trenches to avoid the risk of collapse with damage to existing cables and pipelines.
Mitigating loss potential when restarting the project
Consider what testing and inspections may be required before restarting the project. When recommissioning, inspect the condition of MEP systems (electrical, water and gas systems) before energizing or pressurizing. Have all engineering disciplines (structural, mechanical, electrical, geotechnical, etc.) inspect their respective works before resuming construction to confirm the project integrity.
All of the recommendations are technical advisory in nature from a risk management perspective and may not apply to specific operations. Please review any loss prevention measures carefully and determine how they can best apply to specific needs before implementation. Any queries relating to insurance cover should be made with your local contact in underwriting and/or broker.
