Allianz: Facilities Shut Down During Virus Shutdown Pose New Risks

By Allianz Risk Consulting | April 7, 2020

Many companies are having to shutdown their premises temporarily at short notice due to the Covid 19 pandemic. According to the risk consultants of Allianz Global Corporate & Specialty (AGCS), improper action or negligence when decommissioning buildings and production facilities brings risks for companies. Mothballed factories or offices are by no means safe from fire or other hazards – in fact such risks can be exacerbated when premises are idle or largely unoccupied.

In a new publication, AGCS experts provide an overview of general security and prevention measures to help avoid physical damages, such as regular checks of fire protection systems and the safe storage of flammable materials and liquids if premises have to be shutdown. In response, AGCS is also increasingly providing security advice to its customers via remote monitoring technologies that digitally visualize buildings and security features through photo and video recordings without the need for many people to be physically on site.

“We already see a number of losses that occur on holidays or weekends when employees are not largely present on sites or premises,” says Ralf Dumke, regional head of risk consulting property for AGCS in Central and Eastern Europe:” The production and operating shutdowns currently being caused by the coronavirus pandemic can also bring increasing hazards for businesses.”

Among the industries most affected are automotive manufacturers and suppliers, airlines, airport operators, mechanical and plant engineering firms, the hotel industry and many other large and small production and service companies.

The coronavirus outbreak has led to considerable disruption for both individuals and business operations worldwide. For businesses, the growing number of restrictions imposed by public authorities means that offices, factories and other sites may remain unused or unattended for a longer period of time than usual, as they are ordered to close.

“The potential damage caused by fire or as a result of inadequate maintenance remains, or even increases, when operations are shut down. There are specific measures for loss prevention that can be followed in order to prevent damage during the shutdown of operational facilities as much as possible,”Dumke says.

If possible, regular inspections and tests of fire protection systems should be continued, as these can greatly reduce the effects of a fire. An AGCS analysis of loss events in the insurance industry shows that fires account for almost a quarter (24%) of the value of all insured events in industrial insurance over a period of five years. Fires have caused insurance losses worth more than 14 billion euros from around 9,500 claims.

Allianz offers this advise for businesses that have shut down during the pandemic:


  • Reduce the quantities of combustible materials located inside the buildings as much as possible. Combustible materials may include raw and finished goods, packaging, pallets, waste, dust, lint, oil, flammable/ combustible liquids, etc.
  • Ensure safe separation distances (5 foot minimum) are maintained between all electrical equipment and combustible materials.
  • When prudent, ensure all technical rooms (i.e. mechanical, electrical, etc.) are free of combustible materials.
  • Verify all external combustible storage is located a safe distance away from the buildings. This distance varies depending on the combustibility of the storage and the building construction; however, provide at least 50 feet separation if unsure.


  • Place all combustible and flammable liquids in appropriate storage areas (i.e. cutoff rooms, safety cabinets, etc.). When prudent close or seal all storage containers.
  • Remove all waste rags for safe disposal off-site.
  • Ensure essential ventilation systems continue to operate, if required, for removal of flammable vapors.


  • Shut down all hazardous process equipment and utilities, where possible and operationally appropriate, including nonessential flammable liquid and gas mains.
  • Check whether you can isolate services at the mains and drain all water systems down, except water for fire sprinklers, fire pumps, etc., which should always remain operational.
  • Maintain temperatures at or above 40°F for any areas with water-filled piping, such as fire sprinklers, fire pumps, process equipment, etc., unless otherwise required for operational reasons.
  • Check whether electricity can be shutdown for the premises, except where needed for fire alarms, fire protection systems, security systems, etc.
  • Park all powered industrial vehicles in a fire segregated room or in an area free of combustible materials.


  • Fit quality security mortise deadlocks on all entry/exit doors, taking into account company needs.
  • Secure all windows with any applicable locks.
  • Where possible, and considering escape routes, lock entry posts to prevent unauthorized caravans/ vehicles from entering.
  • Isolate electric roller shutters if possible.
  • Maintain any security systems. The prevention of false alarms (such as from wildlife, temperature and humidity, etc.) should be achieved by removing the cause and not by turning off the systems or isolating affected zones.
  • Check whether you can shut down all nonessential electrical lighting if possible. Keep only the minimum level of lighting where appropriate for inspection, security patrols and access purposes.
  • Ensure all building access keys are accounted for by use of a key log book. Change locks if they are not.
  • Record and list all visitors and contractors. Ensure building entry and lockdown procedures are available and adhered to.
  • Immediately repair any breach in building or perimeter security.
  • Make all efforts to arrange for a manned 24/7 guarding presence at the site or overnight patrols by an approved guarding firm or plant representatives. Any patrols should be at random intervals and times to ensure any pattern is not observed.


  • Visit the building(s) periodically (at least weekly is recommended) and maintain detailed records of all observations. Correct all noted deficiencies promptly.
  • For health and safety reasons, if possible no person should be allowed to enter the building(s) unaccompanied or without the use of an efficient communications method. Always notify a colleague that the building is being entered and of the expected duration of the visit.
  • Verify the following as part of the inspections:
  1. All exterior building openings, such as doors and windows, are properly secured to prevent unauthorized entry.
  2. All electronic monitoring systems (i.e. fire alarms, fire pumps, security systems, etc.) appear to be in good working condition (i.e. power on, no alarms, etc.).
  3. All fire sprinkler systems, including water supplies such as fire pumps and water tanks, appear to be in good operating condition.
  4. No signs of unauthorized entry, vandalism or arson.
  5. Proper maintenance of building and grounds.
  6. Remove evidence of vandalism/graffiti and block any broken windows/entry points immediately when they are discovered.


  • Maintain the building in a good state of repair.
  • Make sure building is watertight by suitable repairs (i.e. roofs, guttering, etc.).


  • Make all efforts to inspect, test and maintain all fire protection and detection systems to remain operational, including the following:
  1. Fire alarm systems, including automatic fire detection.
  2. Fire sprinkler systems, including monthly recorded inspections of sprinkler control valves to ensure they remain locked in the open position.
  3. Fire pumps, including weekly or monthly testing to verify proper operation. –Fire protection water supplies, including water tanks.
  4. Fire extinguishing systems.
  5. Portable fire extinguishers.
  6. Fire doors.

Source: Allianz Risk Consulting

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