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Holistic Site Security Douses Wood-Framed Fire Risk

Several trends in the construction industry are feeding the rise of wood-framed construction – and construction fires.
By: | November 7, 2017 • 6 min read

Over a July weekend in 2017, five buildings in a Waltham, Mass., apartment complex burned to the ground. This only a month after another blaze took down an expansive but unoccupied building in nearby Dorchester. In both cases, local firefighters spent more than 24 hours getting the flames under control and extinguishing hot spots.

Both buildings were still under construction, and both were consumed by fire so quickly because their bones were not made of the steel beams that traditionally hold up large structures — but of wood.

The vulnerability of wood frame construction to a fast-spreading fire (during the stage of construction when framing is exposed) first garnered attention in 2012, when a multi-story senior center in Oakland, Calif., was incinerated down to its first floor, which was made of concrete.

“Since then we have seen increasing frequency of these fires as wood framing becomes more common for large buildings,” said Peter Wilcox, Inland Marine Director for Travelers, specializing in construction and renewable energy.

Several trends in the construction industry are feeding the rise of wood-framed construction – and construction fires.  This presents a worker safety risk as well as property risk. Project owners/developers can help protect themselves on all fronts by incorporating fire prevention protocols into a holistic risk-management approach that considers both worker safety and property exposures.

Industry Trends: Materials and Labor

Peter Wilcox, Inland Marine Director

Wood has always been the primary building material for smaller residential structures, but multi-story apartments, big commercial buildings and mixed-use spaces traditionally relied on steel framing.

“More builders are using wood framing today because wood is less expensive per square foot, easily obtained from the local lumber yard, and much easier to work with. You can usually make changes to the design, such as changing a window opening, relatively easily. And that means that buildings get done faster as well,” Wilcox said.

Faster timelines mean contractors can take on more projects.

Tight schedules and heavy workloads heighten safety risk on their own, but the continuing skilled-labor shortage in construction compounds the exposure.

“A lot of experienced tradesman left the profession during the recession in 2008,” Wilcox said. “As work picks up again, the growing labor pool may be less experienced with fire safety and prevention than in the past. This includes site supervisors as well as laborers.”

The industry has focused its energy on aspects of worker safety, including ergonomics, proper handling of equipment and slip and fall prevention – but the risk of fire remains an important and potentially overlooked risk.

“Clearly fire safety is an important worker safety issue as well.” Wilcox said. “Having fire extinguishers on-site is a start. But to be well prepared for a fire, it is best to address fire risk as part of a holistic site protection plan.”

A Holistic Approach to Site Security

Addressing fire safety begins with identifying potential sources of ignition, and then putting controls in place to manage them.

Hot-work activities present the most obvious source of construction fires. Soldering, welding or cutting metal, brazing refrigerant lines for A/C units or torch-applied roofing all send sparks flying. But these aren’t the only culprits. A commonly overlooked source is on-site cooking.

“The National Fire Protection Association (NFPA) found that cooking is a prevalent cause of fires on construction sites,” Wilcox said. “Once the building gets weather tight, the workers want a break room, a place for coffee pots, microwaves and hot plates. Some job sites bring in gas grills for Friday afternoon cookouts. But people forget what they’ve left on the cooktop.”

Other ignition sources include smoking, temporary heat, and arson.

“These are all things our risk control consultants are looking for on a job site, and identifying these risks is where we begin to build a fire prevention plan,” Wilcox said.

There are some common concepts or tenets in fire prevention plans. The primary tenet of a fire prevention plan is good housekeeping.

“Good housekeeping is close to godliness,” Wilcox said. “If we have a clean site, we’ll have a safe and productive site. Eliminating scrap piles and wood shavings gets rid of those small materials that can really get a fire going.”

The second tenet is training and supervision, especially when less-experienced workers are conducting hot-work activities. In addition to learning how to safely execute these tasks, workers also need proper response training for when something goes awry.

Wilcox cited one incident that happened early in his career, where plumbers were soldering fittings to a pipe protruding from the finished drywall. They noticed that smoke was coming out from the wall opening and they had repeatedly used fire extinguishers to put out the flames sparked by their work. They left for the day when they finished their work, not knowing that the fire has spread deep inside the wall cavity. The entire project ended up in smoke.

“They never bothered to tell anyone they had discharged their extinguisher. A supervisor should have been informed, and the fire department should have been called to come out and make sure the flames didn’t spread,” Wilcox said. “It’s a lot cheaper to remove a section of drywall and check for fire than to rebuild an entire structure.”

In fact, it is best to involve the local fire department as an active participant in a fire prevention plan from the start, Wilcox said. Site supervisors can ask them to do walk-throughs, identify potential hazards and recommend solutions.

A third tenet is having the right equipment on hand and ready to go. Fire extinguishers are a no-brainer, but many sites don’t turn on sprinkler systems until the building is complete, for fear of extensive water damage.

“A fire does a lot more damage than water. There are some communities now trying to get their fire departments to allow builders to activate sprinkler systems earlier in the project, even though current building codes don’t require it,” Wilcox said. “Having sprinkler systems activated can eliminate or reduce the spread of fire during construction which can minimize project delays and keep employees and surrounding areas safer.”

Finally, a fire prevention plan should be part of a wider site security initiative that includes surveillance and security guards who are also trained to identify potential ignition sources and other construction site hazards. “Guards are not only there for security and theft prevention; they look out for the safety of the building overnight,” Wilcox said.

Risk Control Expertise

Travelers can provide resources and information to help develop fire prevention plans, including, written guidelines, safety bulletins and site security checklists. Risk control consultants also conduct site visits and can offer recommendations to help manage potential fire risks.

“With wood-frame construction, we can visit the site when framing starts, and then go out two or three more times as it progresses. Our consultants can provide detailed reports of their observations and recommend some ways the site can improve its security and fire safety,” Wilcox said.

“Many of our recommendations and resources to clients are based on NFPA standards, such as NFPA 241, Standard for Safeguarding Construction, Alteration, and Demolition Operations. This standard addresses common sources of fires like hot-work activities, but also discusses overall site security. It’s a comprehensive set of best practices to prevent fire.”

And because wood framing seems here to stay, it’s a standard worth implementing ASAP.

To learn more, visit https://www.travelers.com/resources/business-industries/construction/protecting-your-construction-site-from-fire-water-and-theft.aspx.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Travelers. The editorial staff of Risk & Insurance had no role in its preparation.




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The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has approximately 30,000 employees and generated revenues of approximately $28 billion in 2016. For more information, visit www.travelers.com.

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.