Canadian Underwriter

Have clients who have temporarily closed? Here’s how they should secure their premises

April 7, 2020   by Adam Malik

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Just because a business has closed its doors to staff and customers because of the COVID-19 pandemic, risks from fire, combustible materials and flood are still present at their physical buildings even when unoccupied, warned a new report from Allianz Global Corporate & Specialty (AGCS). The insurer offered advice to those affected in the risk bulletin.

“In addition to the significant human cost, businesses are also increasingly affected by the growing number of restrictions on public life that have been rightly imposed by authorities, but which have the knock-on effect of companies having to shut down their operations, meaning premises and sites can be idle or largely unoccupied for an unexpected period of time,” the report said.

The Ontario government announced a reduction in the list of businesses that are considered essential, paring the list down to 44 businesses, a significant reduction from the 74 announced about 10 days ago. When Premier Doug Ford announced the reduction, businesses had less than 48 hours to respond. Moving quickly to adhere to new rules can mean some things are overlooked.

“Short-term shutdowns are fast becoming the norm in many sectors, but companies still have to be vigilant about the risk environment,” said Nicolas Lochet, regional technical manager at AGCS’s Allianz Risk Consulting. “The potential for losses resulting from fires or inadequate maintenance remains, and such threats need to be effectively managed and mitigated.”

He emphasized the need for businesses to ensure fire protection and detection systems are tested. Failure to do so could increase the impact of an event, he said. “Businesses should also pay particular attention to the condition of electrical equipment and installations, as around 20% to 30% of fires we see are related to these,” Lochet said.

“Meanwhile, inadequate or postponement of equipment maintenance during a shutdown can result in a loss occurring at the worst possible time for a business — when it is finally able to restart operations,” he added.

Allianz reported that fire accounts for nearly a quarter of the value of all business claims over a five-year period. Failure to inspect and test fire detection systems, sprinkler systems and fire pumps could mean an incident could end up being worse: Response time may be slower when a site is unoccupied or has reduced the number of people.

Combustible materials also need to be taken care of when the doors are closed. Remove them if possible, along with any temporary heating sources, Steve Schmelzle, construction and Contracting Centre of Excellent leader at RSA told Canadian Underwriter. He spoke specifically about what construction clients should do if forced to close under the updated list of essential services issued in Ontario last week.

Whether it’s raw and unfinished goods, packaging, waste or flammable liquids, Allianz recommends reducing the amount of those items in the building. And if some are kept, ensure they’re separated by 1.5 m. (or 5 feet) from all electrical equipment. “In addition, all combustible and flammable liquids should be placed in appropriate storage areas (for example, cut-off rooms, safety cabinets) if possible,” the company said.

Related: How to help commercial clients during mandatory business shutdowns

Any non-essential utilities like flammable liquid and gas mains should be shut down along with any hazardous process equipment. And if it’s possible, consider shutting down the electricity for the building, with the exception of areas needed for fire protection and security.

“Consider isolating services at the mains and drain all water systems, except water for fire sprinklers and pumps,” Allianz recommended.

Where water valves must remain open, have a leak/flow detection device fitted, Schmelzle said.

And don’t forget to lock your doors on the way out, Allianz reminded. Use good quality deadlocks on all doors and make sure windows are secured. Entry points should be locked as well so that unauthorized vehicles can’t get on site. Keep a minimum amount of lighting so that inspections and security patrols can continue, as well as for access purposes.

Schmelzle noted that construction sites should fence their sites and lock gates.

If possible, companies should arrange for a manned 24/7 guarding presence at the site or overnight patrols,” Allianz added. “Any patrols should be at random intervals and times to ensure any pattern is not observed.”

If there is no onsite security, Schmelzle recommended installing remotely monitored CCTV.

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