Practical Property Peril Protections
By Sean Dewalt

n Alaska, commercial property exposures range from natural events such as wind, wildland fires, earthquakes, landslides, and floods to human-caused risks like burglary, vandalism, and arson. While severe wind events and earthquakes are almost impossible to predict with any certainty, perils such as avalanches, landslides, and floods tend to fall back to the old real estate adage of “location, location, location.” If the property is not susceptible to those risks thanks to distance, then the likelihood of a loss is nil. But for those day-to-day exposures that property owners are likely to encounter, the best defense is a solid offense. That means taking a proactive approach to property risk management to reduce the probability of losses. While it is understood that liability follows the property ownership, the focus here is on physical exposures and controls to limit risk incurred to structures and people.

The first step to protecting property is understanding the totality of vulnerabilities for the building. This is a risk assessment that can be easily conducted with the help of the commercial insurance carrier or loss control professional. The key to a complete, quality analysis is understanding not just the location of the property but also the operations at that individual location. Adequate controls for a multi-unit habitational occupancy may be significantly different than for a low-rise office building. Some operations have special hazards, which can include flammable and combustible liquids, spray-painting operations, commercial cooking, welding, and cutting. In buildings where these types of tasks are performed, a thorough review of the National Fire Protection Association regulations is necessary and should be adhered to closely.

There are a significant number of buildings in Alaska where mixed or multiple occupancies exist, such as restaurants or maintenance shops in the same location as apartments. These combinations of exposures pose a unique danger due to the comingling of high-risk special hazards and residential occupants. For many properties in this category, fire is a significant possibility, and the best mitigation solution to many of these potential perils includes active fire prevention and protection systems.

Private fire protection systems are fire safeguards at the property, such as fire extinguishers, alarms (both fire and smoke), and automatic sprinkler systems. Automatic sprinklers are the most reliable and effective fire protection devices available today, provided they operate correctly. The clearance for sprinkler heads is a minimum of 18 inches, so stacking items to the ceiling should be avoided. All of these systems have annual inspection requirements and should be part of a formal property inspection process. Insurance companies tend to give credits on insurance premiums for sprinklered buildings if the systems are inspected and maintained properly.

Formal property inspections are a great way to ensure that the building is taken care of consistently. A checklist for the structure that can quickly and thoroughly assess exposures and controls is highly recommended. The inspection sheet should address the interior, exterior, and adjacent property conditions of the building. It should also contain a process for reporting and mitigation of noted hazards and be retained for a length of time. It is important that the person carrying out the inspection understands what to look for and why. For larger buildings, professional security services can provide monitoring of surveillance equipment, guarding entry points, and verifying visitors. Professional property managers are another good solution to ensure that the property is adequately operated. Both types of professionals can perform building walk-throughs and are often formally trained in the inspection process.

Yet another good resource is the Insurance Institute for Business and Home Safety (IBHS). The IBHS is an independent, nonprofit scientific research and communications organization supported by property insurers and reinsurers. At you will find information about protecting buildings and property as well as links to information to help increase resilience for structures. Regardless of the chosen option, formalized documentation should be provided to the building owner for review and retention, including any deficiencies or risk mitigation work that was completed.

A thorough inspection should start from the outside in, and from the top down.

  1. Assess the structure’s cladding, roof, walkway, windows, doors, and any adjacent hazards such as trees or other threats.
  2. Keep egress doors clear of obstructions such as snow or trash.
  3. In the parking lot and around the building perimeter, sufficient lighting, security systems, roving vehicle patrols, adequate fencing, and solid locking mechanisms will help to reduce the probability of an event.
  4. For larger buildings, professional security services can monitor surveillance equipment, guard entry points, and verify visitors.

Inside the building:

  1. Make sure that boiler, electrical, and mechanical rooms are clear and not used as storage areas.
  2. Panels, heating and cooling units, and other equipment should be easily accessible, with 36 inches as a good rule of thumb for clearance and accessibility.
  3. Flammables and combustibles should never be stored in these areas.
  4. Assess each area of the building and use your senses to determine if anything seems out of normal. Unusual smells like smoke, chemicals, mildew, and stale air are often indicators of potential problems. Carefully assess whether there are anomalies that are out of place, such as missing fire extinguishers, improperly stored goods, or damage to the structure. Listen and identify sounds that could provide evidence of failing equipment.
  5. Make sure to ask the occupants if they have any concerns about the building and address those concerns quickly.

Tools like thermal imaging cameras, a ground-fault circuit interrupter testing tool, and digital thermometers are simple ways to “feel” if hotspots or electrical issues might exist. Following up on any significant issues with a qualified electrician is a solid investment. The same goes with annual inspections of HVAC systems.

Having exit routes mapped, exit signs operational and illuminated, emergency lights that work, and an evacuation plan should be a priority for any commercial building. The building tour should focus on these items, and any deficiencies should be noted and corrected. An Emergency Action Plan encompasses all these concerns and presents directives on what to do in the event of an occurrence. The Emergency Action Plan should be formalized, and every person working in the building should be trained on what their responsibilities are in the event of earthquakes, fires, workplace violence, volcanic eruptions, bomb threats, medical emergencies, floods, severe weather, and any other exposure to personnel. Keep in mind that special operations, such as processing or production, may have any number of internal and external hazards that should be included in Emergency Action Plans. As always, it is best practice to have drills at least annually to ensure competency.

Protecting property demands a methodical, formal, and proactive approach to reducing risk. But like so much in this uncertain world, staying on top of matters and addressing issues early could save money, time, and headaches down the road. And it very well could save the building.

Do not wait until something happens to your investment. Act now.

Sean Dewalt is a Senior Loss Control Consultant for Umialik Insurance Company in Anchorage. Dewalt has been working in safety and risk management in Alaska since 2000.