Allianz: Facilities Shut Down During Virus Shutdown Pose New Risks

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:

COMBUSTIBLES:

COMBUSTIBLE AND FLAMMABLE LIQUIDS:

SERVICES:

BUILDING SECURITY:

PREMISES 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.

MAINTENANCE:

FIRE:

  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