Construction companies, it's time to prepare for hurricane season
An expert at AIG shares the plans and actions construction clients should implement before, during and after a windstorm.
Let’s face it; we all do it: Every spring, we anxiously await the predictions from various natural catastrophe experts, weather or climate organizations and academic institutions. How many named Atlantic storms will there be, how many will make landfall, and out of those, what number will become major hurricanes?
When those predictions come out, is your general gut feeling these predictions will come to fruition? Will they be accurate? Or fingers crossed, will we hopefully see less activity this year and beyond? As a risk manager, broker or insurance company dealing with risk in the construction industry, we know from recent data that one can no longer hope for the best and assume it will be a ‘quiet’ year.
The data suggest the ever-growing complexity and size of risks for construction contractors, managers and owners. A better understanding of the data and the risk will lead to determining how best to prevent and mitigate loss from hurricanes and other major wind events and possible flash flooding or storm surge. We at AIG outline plans and actions below that all vested parties can partner on to implement prior to, during and after an event.
Extremely active hurricane season
This past year was another record-breaker. The National Oceanic and Atmospheric Administration (NOAA) accurately predicted the extremely active year. In total, the 2020 season produced 30 named storms (top winds of 39 mph or greater), of which 13 became hurricanes (top winds of 74 mph or greater), including six major hurricanes (top winds of 111 mph or greater). This is the most storms for one season on record, surpassing the 28 named storms from 2005 and the second-highest number in any year on record.
The predictions for 2021 are grim. The Colorado State University (CSU) Tropical Meteorology Project Team is predicting an “above average” Atlantic hurricane season this year, with 17 named storms, including eight hurricanes, four of which are predicted to become major hurricanes.
When looking at the global loss trends (Figure 1) of world natural catastrophes by overall and insured losses, 1980–2018, we see that over the course of 1980–2018, the number of events continues to be in an upward trend, with hurricane, storm and flood events as primary drivers.
Data going back to 1992 details that 14 of the 15 costliest natural disasters were due to windstorms (12 hurricanes and 2 tornado outbreaks). All but two of these windstorms (Hugo and Andrew) have occurred very recently since 2004. Recent notable windstorm events include Sandy (2012), which caused over $70 billion in losses, producing extensive damage in several states, and Katrina (2005), which caused over 1,200 fatalities and losses in excess of $150 billion, and produced destructive storm surge along the Gulf Coast, as well as high winds and property damage as far inland as Ohio. Given this trend with the fact that demographics are rapidly changing, coastal cities continue to boom, materials and labor costs continue to increase, the potential for more frequent and larger losses does not appear likely to subside in the immediate future.
The data is alarming and should serve as a sober warning for all stakeholders involved in the insuring and protection of construction projects in hurricane- or wind-prone areas. The following are best practices to consider as we enter the next wind season.
Before an event:
- Establish a Hurricane Emergency Response team and keep the contact list up to date.
- Service all generators and other backup power equipment regularly.
- Identify alternative means of transportation and alternative routes for all critical personnel, services, suppliers and contractors.
- Reconfirm catastrophe plan with all leasing and rental companies.
- Review the integrity of each building and structure, inspect exterior wall coverings for attachment, damage and weather tightness, and check all seals for any other possible water entry points.
- Ensure adequate materials are available for storm protection, such as lumber and protective hardware.
- Verify the location and placement of all required fire protection and other emergency equipment, confirming it is serviced and operational.
- Make arrangements for several forms of emergency communications to be in place (cell phones, two-way radios, etc.).
- When a storm is imminent, assemble the Hurricane Emergency Response team, supplies & equipment at a designated safe location on or off-site.
During an event:
- Designate a Hurricane Emergency Response Team member to monitor weather conditions and communicate required actions as regularly as possible.
- Turn off non-essential lighting, machinery and equipment. Anticipate power outages and surges; be prepared to shut down susceptible systems such as computers.
- Board up windows, operate shutters and tie down equipment as needed.
- Shut off all flammable and combustible liquid piping and gas lines at the source or entry into the project to reduce the likelihood of release if pipes are broken. Pipes should be properly supported and protected from wind and debris.
- The project emergency team should remain on-site if safe to do so until the event has passed. Patrol the property looking for structural damage, fires and flooding if safe to do so.
- De-energize equipment that may be submerged. Move equipment and supplies to higher elevated locations or to another site.
- Protect project site with sandbags as needed and verify operation of pumps and other de-watering equipment.
- If you are directed by local authorities to evacuate – follow evacuation orders and all instructions.
After an event:
- Secure the project site and establish a command center to direct the recovery operation.
- Survey damage and notify local fire and/or police departments as soon as it is safe to do so.
- Identify safety hazards such as downed electrical wires, leaking gas or flammable liquids, poisonous gasses, damage to foundations or underground piping.
- Clean roof drains, storm drains, retention ponds and remove debris.
- Call designated key personnel and emergency contractors to coordinate and start repairs.
- Report damage to insurance companies immediately.
- Cover broken windows, openings and damaged roofs while making temporary repairs to prevent further damage. Remove standing water in buildings/yard areas and dehumidify areas containing moisture-sensitive equipment.
- Inspect all electrical equipment, including exposed insulators, bus bars, & conductors, before reenergizing electrical distribution systems and equipment.
- Ensure that all company policies, such as for hot work (cutting and welding) and smoking, are properly enforced during salvage and repair operations.
These plans and actions can help to both prevent and mitigate potential loss due to hurricanes and related wind events. And most importantly, they will create improved probability in delivering construction projects on time, keeping costs contained, and lowering the overall cost of risk.
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