Unexpected Closures Increase On-Site Property Damage Risks

Hilary Tuttle

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May 1, 2020

As businesses experience unexpected closures due to the COVID-19 pandemic, industrial and commercial facilities sitting idle may face increased risks of physical damage from hazards like fire or inadequate maintenance, according to a recent Allianz Global Corporate and Specialty risk bulletin. Damage could also be more severe as it may take longer to detect and respond to an incident. Allianz outlined several key measures to reduce these risks, including continuing to test fire protection and detection systems. The firm also recommended reducing the quantities of any combustible materials kept on the premises, ensuring a five-foot minimum separation between electrical equipment and remaining materials, and moving any combustible and flammable materials into safer isolated storage areas, if possible.

Further, businesses should consider shutting down hazardous process equipment and utilities, such as nonessential flammable liquid and gas mains and even cutting electricity to the premises aside from necessary connections for fire and security systems. To mitigate water damage risks, businesses can isolate services at the mains and drain all water systems except for sprinklers and pumps.

Hilary Tuttle is senior editor of Risk Management.