Here's how to mitigate risks for real estate accounts
Owning or managing commercial property brings a variety of risks, including those posed by natural hazards, hot work, renovations, water leakage and changes in tenant operations. These risks can be minimized by implementing these six human element programs:
- Fire Protection Impairment Management
If a sprinkler valve is closed for a build-out or renovation, the building, or a portion of it, essentially becomes unsprinklered for the duration of the project. Proactive management includes bringing the area back to a sprinklered state as quickly as possible and ensuring that extra care is taken to prevent a fire while the system is out of service. The FM Global Red Tag Permit System is designed to help clients manage impairments.
- Natural Hazards Response Planning
A key component to minimizing damage in the event of a flood, earthquake, hurricane, or other natural disaster is to have a documented emergency response plan. Advanced planning informs and designates the relevant parties for the critical steps to be taken in an emergency and helps ensure there are adequate resources on hand. When a client has a plan in place, it shows tenants that minimizing interruption to their operations due to a natural hazards event is important.
- Tenant Businesses
Understanding the business of tenants is key to understanding the associated exposures and risks. Clients should have a plan in place to analyze the risk and business impact when bringing on new tenants. Additionally, the client can reach out to AFM in the event of a change in tenant or operations to discuss any new potential hazards introduced to the property.
- Hot Work Management
Hot work is any temporary operation involving open flames or producing heat and/or sparks, which introduces an ignition source into the client's facility. If hot work is taking place, proper management protocols should be followed to limit the potential for that ignition source to come in contact with a fuel; to ensure fire protection is ready to respond if a fire does occur; and to have a fire watch to notice any spark that may be smoldering after hot work is completed. The FM Global Hot Work Permit System is designed to help manage hot work. Clients can download the FM Global Hot Work Permit App via Apple's App Store or Google Play. For more information about the FM Global Hot Work Permit App, view this video.
- Contractor Management
Ideally, contractors will perform quality work at client properties in a safe manner, but contractors are often tasked with getting the job done as quickly as possible. Making contractors aware of company asset protection policies, requiring that they follow loss prevention procedures, and monitoring work can help mitigate unsafe practices at client properties.
- Water Leakage Response Planning
Water leakage causes frequent losses in "finished" facilities, such as offices, hotels, retail stores, and schools, and is especially problematic in multi-story buildings. Formal planning can help mitigate the damage associated with a water leak. Clients can preplan by knowing where all water shutoffs are located and ensuring valves are operable. This will help limit the amount of water released on the property.
For additional information on how to develop these policies, please contact your AFM representative, or visit the AFM Training Center for free online courses, including "Protecting Commercial Property From Loss," "Planning for Emergencies, Managing Hot Work Using FM Global's Hot Work Permit System," "Managing Impairments Using FM Global's Red Tag Permit System," and "Advancing Your Hot Work Skills."