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Vacant Property Insurance - July 2017

Owning a vacant building can pose serious liabilities because vacant buildings are more susceptible to vandalism, undetected repairs, fire and other losses. If you own vacant property, it is advisable to purchase Vacant Property Insurance, also known as Vacant Building Insurance or Vacant Dwelling Insurance, to protect against risks.

Risks

The following are the most prevalent risks to vacant properties:

  • Fire
  • Lightning damage
  • Explosion
  • Windstorm or hail damage
  • Smoke
  • Riot or civil commotion damage
  • Sprinkler leakage
  • Sinkhole collapse
  • Vandalism (no one is present to deter vandals)
  • Malicious mischief on the property and general property destruction
  • Presence of squatters on the property causing damage without owner knowledge

Insurance Solutions

Under certain policies, Vacant Property Insurance can provide protection if your building goes unoccupied for as little as four days. It also protects against liabilities in the event someone is injured on your property and sues for damages. In some cases, it is required when a property owner dies and the property goes to an estate sale. It may also be a viable option if the property is in the process of being sold or if it is under construction and is uninhabitable.

In addition to purchasing coverage for a vacant building, take the following actions:

  • Regularly inspect it for damage or threats of damage
  • Seal off windows and letterboxes
  • Install alarm systems that are triggered by intruders, fires or floods

Cost

A typical Vacant Property Insurance policy is one and a half to three times the cost of a Property Insurance policy due to the increased risks associated with owning an uninhabited building.

If your occupied property becomes vacant, it is imperative that you notify CMR Risk & Insurance Services, Inc. immediately. If you fail to give us adequate notice (in some cases, the required notice is 60 days after it becomes vacant) and you suffer a loss, coverage may be denied.

We understand that unfavorable incidents can occur, but Vacant Property Insurance can provide necessary protection. Contact us today for more details.

Swimming Pool Liability for Condos and HOAs - June 2017

A private swimming pool run by a condo or homeowners’ association (HOA) can be a very attractive amenity to potential homebuyers. However, while they can be popular with owners, pools create a number of liabilities for the association that need to be addressed to avoid safety and legal concerns.

To retain the benefits that a pool brings to your association, your board of directors will need to mitigate the risks of operating a pool by instituting proper safety measures, supplemented by adequate insurance coverage to protect the association from liability.

Pool Liabilities

When evaluating the risk a pool poses, some potential liabilities may be fairly obvious while others may not. Obvious risks are drowning or slip and fall accidents, but don’t overlook items such as water quality, chemical management and lifeguard staffing. Adequately identifying your risks is essential to addressing them.

Mitigating Risk

Your association’s board of directors should consider appointing a pool committee that can take responsibility for reviewing, updating and distributing pool rules. This process should begin with a review of all state and local regulations involving pool operation to ensure compliance. The committee should review the rules annually to make sure they are still addressing liability concerns, plus conduct a thorough inspection of all aspects of the pool facilities.

To avoid key areas of liability the committee should examine the following aspects of the property’s pool:

  • The pool area should be completely surrounded by a fence or other structure that includes a gate or door with a locking mechanism meant to prevent unauthorized access when the pool is closed.
  • All rescue equipment including flotation devices, life hooks and backboards are readily accessible in case of an emergency; there should also be a first aid kit on hand.
  • Chemicals should be kept in a cool, dry, well-ventilated and secure area inaccessible by patrons.
  • Chemicals should be monitored on a consistent basis with recordkeeping completed in accordance with any state or local regulation.
  • Hours of operation should not be taxing on the resources of the association.

Pool rules should be posted clearly in the pool area, and annually distributed to all residents.

Are you Covered?

Even if you take all the right precautions, it is important to be prepared in the event of an accident. Check with CMR Risk & Insurance Services, Inc. to verify if your association’s current liability coverage addresses your pool risks. When talking to our team, also ask about any stipulations a policy may have for coverage. If your pool is not up to regulation, some policies may not pay out in the event of a claim, so it’s important to know what is required of you.

Air Quality at Your Property - May 2017

The health of your property’s occupants can be jeopardized by poor air quality, and it is your responsibility to provide a healthy indoor environment, whether it is protecting against airborne infections like H1N1 or pollutants from equipment. From mechanical problems like a faulty exhaust fan to the measure of air volume exchanges, there are many factors that are easily overlooked. An Indoor Air Quality Management Plan is a good way to ensure that residents’ health is not endangered by the air in the building.

The plan you design must address the specific needs of each space, and should never be limited to HVAC maintenance. The task should be assigned to one person who is charged with identifying problem locations and staff whose activities might affect the quality of the air.

Study the Exchange Rate

The air volume exchange rate is a factor that property managers must consider. The American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) recommends a minimum exchange of ten cubic feet per minute per person in an indoor environment. This rate can be tested by a certified engineer. If your rate is too high, you will be alerted to problems like a faulty variable air volume box.

Take Steps to Improve Your Plan

Ensure that you will easily be able to update your plan for any legislative or other changes that affect air quality. Follow these guidelines for creating a plan that is appropriate to your situation:

  • Consult the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) for advice on the maintenance of air quality if you renovate or add on to your property.
  • Schedule routine maintenance of motors, fan belts and filters with certified mechanics. Revisit everything every 90 days.
  • Specify filter selection and maintenance. If the property has mixed uses, each occupant should have a separate filter schedule:

    o  Specify which Minimum Efficiency Rating Value (MERV) is necessary in the filter. The higher the number, the higher the filtration rate.

    o  In sensitive environments, use a high efficiency particulate air (HEPA) filter.

  • Design procedures for reacting to complaints by occupants, including those regarding humidity or odors. Air quality professionals may be able to analyze air samples to identify appropriate solutions, which might include dehumidifiers or air scrubbers.
  • Verify that all cleaning products comply with Environmental Protection Agency (EPA) standards.

Work With Occupants

Inform your occupants your air quality plan, and ask for their help in maintaining good air quality. There are steps occupants can take to improve air quality, including the following:

  • Refraining from smoking within 25 feet of the building
  • Using entryway cleaning systems, such as grills and mats, to reduce the amount of dirt, dust and pollen that enters the building
  • In sensitive environments, using ultra-violet lights to kill bacteria circulating in the air

Contact Us

For more loss prevention tips, contact CMR Risk & Insurance Services, Inc.. Our insurance specialists are available to help you solve your property and casualty issues. 

Vacant Property Insurance - April 2017

Owning a vacant building can pose serious liabilities because vacant buildings are more susceptible to vandalism, undetected repairs, fire and other losses. If you own vacant property, it is advisable to purchase Vacant Property Insurance, also known as Vacant Building Insurance or Vacant Dwelling Insurance, to protect against risks.

Risks

The following are the most prevalent risks to vacant properties:

  • Fire
  • Lightning damage
  • Explosion
  • Windstorm or hail damage
  • Smoke
  • Riot or civil commotion damage
  • Sprinkler leakage
  • Sinkhole collapse
  • Vandalism (no one is present to deter vandals)
  • Malicious mischief on the property and general property destruction
  • Presence of squatters on the property causing damage without owner knowledge

Insurance Solutions

Under certain policies, Vacant Property Insurance can provide protection if your building goes unoccupied for as little as four days. It also protects against liabilities in the event someone is injured on your property and sues for damages. In some cases, it is required when a property owner dies and the property goes to an estate sale. It may also be a viable option if the property is in the process of being sold or if it is under construction and is uninhabitable.

In addition to purchasing coverage for a vacant building, take the following actions:

  • Regularly inspect it for damage or threats of damage
  • Seal off windows and letterboxes
  • Install alarm systems that are triggered by intruders, fires or floods

Cost

A typical Vacant Property Insurance policy is one and a half to three times the cost of a Property Insurance policy due to the increased risks associated with owning an uninhabited building.

If your occupied property becomes vacant, it is imperative that you notify [B_Officialname] immediately. If you fail to give us adequate notice (in some cases, the required notice is 60 days after it becomes vacant) and you suffer a loss, coverage may be denied.

We understand that unfavorable incidents can occur, but Vacant Property Insurance can provide necessary protection. Contact us today for more details.

Be Prepared for Unexpected Threats and Dangers - March 2017

As a property manager, you are responsible for the safety of your tenants and the property itself. You need to be prepared for a host of unforeseen dangers that threaten that safety, including criminal activity, natural disasters and terrorist acts. Though these events may seem unlikely, they could have catastrophic consequences so it is imperative that you prepare.

Without prior planning, you leave your company open to financial disaster, especially if you are forced to evacuate or temporarily close down your buildings. You also may face lawsuits for being negligent in protecting your tenants.

Ensure Proper Security

One risk you need to be aware of and plan for is criminal activity, including vandalism, break-ins, theft and violence. Though not all security threats can be avoided, some situations can be prevented with appropriate preparation.

  • Advise staff and residents to report any suspicious persons or activity in or around the facility.
  • Establish and follow visitor control procedures when feasible. This may include assigned parking, sign-ins for use of public areas, escorts for tours of the property, etc.
  • Survey locks, fences, exterior lights and other physical security devices to ensure that they are in place where needed and in proper operating condition. Establish a monthly inspection of your security perimeter and key protective features of your facility.
  • Evaluate critical locations in your facility for proper security, including the electric, telephone and gas units, building entrances, transformers, outside storage units and computer rooms.
  • Be sure each unit is equipped with appropriate locks and security features, and instruct residents to let management know if maintenance is needed or if their key is lost or stolen.
  • If your facility has a security/fire alarm system, be sure it is operating properly and that key personnel know how to arm/disarm it.
  • Make sure that fire suppression systems are regularly inspected and maintained. Also be sure that a sufficient number of trusted personnel know how to activate, operate and shut them down.
  • Closed-circuit television can serve as an excellent crime deterrent, and when the system is equipped with a recorder it can help solve crimes.
  • Review your procedures for issuing facility keys and access cards. Keep a list of all residents who have received keys (and how many were issued per unit).
  • Discuss security with your local police department. Police departments are often very willing to provide information and support, which may include regular patrols through your complex or past your properties.
  • Have your local fire department conduct a pre-planned visit to your building. While there, they can identify potential hazards and plan fire suppression priorities.

Disaster Planning

Though a more unlikely risk, you should always be prepared to use established strategies to mitigate the risk of disasters:

  • Be sure to discuss terrorism and applicable natural disaster coverage with your CMR Risk & Insurance Services, Inc. representative.
  • Keep copies of insurance policies and other critical documents in a safe and accessible location (e.g. a fireproof safe).
  • Evaluate which disasters are most likely to occur in your area, remembering to include the possibility for terrorist activity. Be sure you are prepared for all of the risks you identify.
  • Develop a Disaster Recovery Plan. If you already have one make sure that it is up-to-date. This entails preparing for anything that disruption in essential systems, infrastructure or building functions.
  • Have telephone call lists available (include cell phone and pager numbers) for all key personnel so required staff members can be contacted from any location in the event of a disaster.
  • Establish a system to communicate with tenants in the event of a disaster or other emergency situation. Educate tenants about this system and other disaster response plans that they should be aware of, including evacuation or building lock-down procedures.
  • Consider establishing an alternate method for your phone service if the switchboard becomes unusable (e.g. forwarding incoming calls to a cell phone or remote number).

How to select a proper floor mat - February 2017

This reference note offers some simple guidelines on selecting and installing the right matting system for the right purpose.

 Tribology is the study of the interaction of sliding surfaces. In slips and falls, tribology is associated with the following:

1. Friction between the shoe sole and the floor surface,

2. Lubrication at the interface or contaminate on the floor surface, such as water, grease or oil, particulate soil etc., and

3. Wear of floor surface and shoe sole material over time.

All three are important when assessing potential for slips and falls, and all three are important when selecting interventions to prevent slips and falls.

Mats are more than a place to wipe your shoes when entering a building or to stand on when performing manual work tasks. When selected and installed correctly, mats can reduce the likelihood of slips and falls and reduce lower extremity and back discomfort.

When Do I Need a Mat?

Mats might be warranted when a pedestrian walking or working surface does not meet slip resistance requirements, such as when moisture, grease, oil, dirt or other contaminates are present. Examples include at building entrances, grocery produce areas, around salad bars, water fountains, sinks, restaurant kitchens, machinery process areas, near food counters, and anywhere spills, water, dirt, grease, etc. is part of the environment. Some mats have anti-fatigue properties that might be useful for areas where employees stand in one place for a long period of time. Mats can also be used as a temporary fix until floor surface repairs can be made if surface is damaged.

There are two types of matting systems; entrance mats or “front of the house” mats and multi-purpose mats or “back of the house” mats. Whether “front of the house” or “back of the house,” a strategy needs to be employed to select the right mat for the right environment. Too often, little thought is given to matting systems. It is easy to subcontract to a vendor the selection, cleaning and replacement of loose-lay mats (see below) used at entrances and back of the house. Mats that are dirty, worn and old offer little slip prevention benefits.

Entrance Mats

Entrance matting improves overall floor maintenance by scraping and absorbing soil particles and moisture from footwear to keep the floor in a clean dry condition. Can an entrance mat system improve the “tribology” of a floor? Yes, because mats remove moisture and particulate soil from the shoe sole and heel, thereby, reducing likelihood of slips and protecting the floor finish from unnecessary wear. It is estimated that 80% of soil entering a building can be trapped within the first 15 feet on a carpeted surface.

There are four types of entrance mats:

  1. Well and grate system: Requires a structural commitment. This type of mat funnels and drains moisture down and is a permanent fixture at entrances.
  2. Glue-down: Installed at any time. The floor surface can be damaged by the adhesive. Some types require a metal strip and rubber reducer that is screwed into the floor as the finished edge. Replacement is time consuming.
  3. Recessed: Permanent mats inserted into a well or recessed surface that become the finished floor. The finished height of the mat should be at least flush with the lip of the well and not represent a trip hazard.
  4. Loose-lay: Should stay in place without the use of adhesives, frames, screws or duct tape. Be aware of the type of backing. Guard against damage to underlying floor surface as these mats may harbor mold and mildew. Air should circulate through the mat.

Recessed and loose-lay entrance mats are the most common. Surface selection depends on expected foot traffic and whether the mat is used in winter or wet climates. The primary purpose of a mat is to remove moisture and soil from the shoe. If an inferior mat is selected, it will wear quickly, saturate with water quickly, and not perform as it should. More durable and absorptive entrance mats cost more but they usually last longer and do the job better.

The depth of the mat is very important. The number of steps required to effectively scrape and wipe feet depends on climate. As climate improves, the demands on floor matting become less intense. In snow strategies, a minimum of 10-12 walking steps is a good guide to the depth of floor mat needed. Rain strategies can gauge about 8-10 steps and dry strategies require about 6-8 steps.1 Mat depth “credit” is given for the following:

1. Overhangs (if any)

2. Outside mats (if any)

3. Vestibule mats (if any)

4. Walk-off mats inside the building

5. Type of flooring inside the building

A rule of safe practice is that footprints or water prints should not be seen beyond the last entrance mat. See Figure 1.

If the walkway surface material inside the building can be slippery when wet (i.e. polished and waxed vinyl composition tile, terrazzo, polished granite/marble, glazed and smooth ceramic tiles etc.) and there are no interior mats, or there are mats but by design and installation they do not,

  • Adequately absorb moisture from footwear,
  • Adequately remove soils from footwear,
  • Or perform well because they are dirty... then entrance safety improvements are needed — including selecting the right matting system.

Foot grills may not perform well alone on wet, snowy days as they can saturate quickly; therefore, an absorptive walk-off mat inside the building is needed. The walking depth strategy would extend from the outside edge of the vestibule mat to the inside edge of the walk-off mat. However, if there is an overhang, the walking depth would include the overhang depth.

Multi-Purpose Mats

Back-of-the-house mats are multi-purpose mats that can absorb liquids, elevate workers above standing water, provide a slip resistant working or standing surface, and/or provide anti-fatigue properties.

Absorbing or retaining spills is common for mats used in grocery produce areas, around water fountains and sinks, etc. When selecting mats for this purpose, consider liquid absorption characteristics; containment of spills and debris; and durability, such as grocery cart traffic and foot traffic.

Mats with slip-resistant surfaces are useful in standing work areas where grease and oil are common, such as in restaurant kitchens, manufacturing and food process areas. These mats have durable slip resistant surfaces that are also easy to clean. When the surface is wet, some mats can be more slippery than the surface they rest on. Test by kicking the wet mat and then kick the adjacent floor surface to determine which is more slippery. Drawbacks of mats are that some can interfere with wheeled equipment, and moisture and debris can be tracked onto other areas if wrong mat is selected. It can be difficult to practice “clean-as-you-go” when mats are in place.

Anti-Fatigue Mats

Anti-fatigue mats are common at work areas where prolonged standing work is performed, like retail cashiers, machine operators and packing workers. Standing for long periods of time has been implicated in a number of health issues, including lower extremity discomfort, pain and fatigue, and low back discomfort. Research has shown that discomfort may be due to venous pooling rather than muscle fatigue. Subject ratings of perceived fatigue from various flooring and matting materials have been shown to be more helpful than quantitative measures when evaluating the physical benefits of anti-fatigue mats among alternatives.

Research has also shown material that is too soft can be associated with increased lower extremity fatigue and discomfort, while harder or stiffer surfaces were most often associated with low back discomfort. No study has yet to recommend a specific material for anti-fatigue matting. When selecting anti-fatigue matting, experiment with different types and be sure to involve the worker in the final selection.

Mat Selection

Use the following guidelines when selecting mats:

  • Select a mat design and surface material based on expected environment and traffic load.
  • Select mats whose edges will not curl by design. These mats often have a beveled edge or a flat edge to reduce tripping exposure. Mats more than ¼ inch thick should have tapered edges to prevent tripping.
  • Select mats with non-slip backing that resists movement.
  • Select mats that guard against damage to underlying floor surface caused by mold and mildew.
  • Select mats that are easy to clean. A mat’s weight, size and openings determine how difficult or easy it will be to clean.
  • When practical, a single larger mat should be used instead of multiple smaller mats.
  • Mats and runners should be laid out to avoid overlap or gaps between them and to provide a continuous walkway path.
  • When selecting anti-fatigue mats involve workers and offer options.

Mat Usage

Use the following guidelines when using mats:

  • Routinely inspect mats for damage and excess wear, and replace as necessary.
  • Store mats or runners to prevent edges from curling.
  • Do not place mats or runners against objects that don’t allow the mat to lie flat (e.g. against machinery and process areas, doors or furniture).
  • Mats should receive scheduled cleanings, especially in environments exposed to snow, ice and rain.

 

What You Should Know About Going Green - December 2016

You may have thought about incorporating green components into renovation or new construction projects, as green building is a growing trend. Many property owners are joining the green movement as a way to lower energy costs and make their buildings more attractive to potential tenants. In addition, green building is becoming increasingly more difficult to avoid because federal, state and municipal governments are starting to mandate it for new residential construction.

Beyond green construction initiatives, there are several smaller but meaningful ways that you can incorporate efficiency and sustainability into the properties you manage.

Green Construction Standards

If you are thinking of updating your buildings or beginning new construction with green techniques, it is important that you are aware of federal green building standards.

In the United States, the dominant standard is the Leadership in Energy and Environmental Design (LEED) rating, which is administered by the U.S. Green Building Council. Commercial buildings that are LEED certified not only have lower operating costs and provide a healthier, safer environment for occupants, they also allow the owner to qualify for tax rebates, zoning allowances and other incentives. In addition, owners of LEED-certified green buildings receive a reputational boost, as they are publically demonstrating their commitment to the environment and their social responsibility.

The interesting thing to note about LEED ratings is that contractors and builders have a large amount of latitude on how they reach the certification. LEED does not specify what kinds of technologies or green components must be used to reach each level, and aside from the established prerequisites, points need not be attained in certain combinations. That means two buildings with identical point totals and LEED status may use completely different strategies, techniques and technologies to attain unique green results. One may excel in innovation and the other may focus on sustainability, but they both could ultimately achieve the same status.

Hiring a Builder

LEED ratings are important to understand so that you ensure you are getting what you expect when engaging in a green building project. The contracting company you hire should have experience designing and building up to LEED standards. Ask for references and examples of past work that is similar to what you are requesting.

Be wary of a contractor who promises something that seems impossible to deliver on given your budget and time restraints. A common problem in the green building arena is that the end result may not actually meet LEED standards or provide the energy efficiency and savings that was expected. This is due to the newer nature of the green construction field, and contractors who think they can deliver something that turns out to be unreasonable or impossible. Do plenty of research before choosing a contractor.

Protect Yourself

This may seem obvious, but it is essential that everything is put in contractual form when working with a contractor. That way, if the job is not completed according to your specifications or up to the standards promised by the contractor, you can hold that contractor liable. Green building is quite expensive, so you want to be sure you get the proper return on your investment. You may want to also make sure your contractor and sub-contractors are properly insured in case of a future problem.

Other Green Initiatives

If you are not ready to commit to a green construction project, or even if you are, there are also other ways that you can promote green strategies in the properties you manage:

  • Make recycling the standard at your property. Simply providing recycling bins for residents isn’t enough—you need to educate and encourage their use. Educate your tenants about the different materials that can be recycled and provide bins for each separate material. You may also consider providing an area to recycle batteries and ink cartridges.
  • Education should go beyond what is and isn’t recyclable and focus on the importance of being environmentally friendly.
  • Consider offering areas for tenants to recycle other unwanted items, like clothing or shoes. You can then donate those items to a local charity.
  • Install energy-efficient light bulbs and appliances in your buildings, whenever feasible.
  • Use environmentally-friendly cleaning products.
  • If you control the heating and air conditioning in your buildings, keep it at a more moderate temperature and be sure to replace filters regularly.
  • Run lawn sprinklers for less time each day, and use automatic lighting systems for community areas.
  • Switch to a paperless billing system and offer online services for paying rent.

Conducting a Condo or HOA Site Inspection - November 2016

Regular property inspections are an important part of managing condominium or homeowners association (HOA) risks. Thorough inspections increase the safety and well-being of homeowners, protect property values, and reduce the risk of costly repairs and lawsuits.

Why should HOAs conduct regular inspections?

Conducting inspections regularly keeps an HOA on top of security risks, as well as maintenance and building problems. A thorough inspection should do the following:

  • Increases the safety, health and welfare of all association members and guests: Regular inspections ensure your HOA community is a safe place to live. One significant area of liability for HOAs is slip-and-fall accidents, which indicate the need for frequent inspections of sidewalks, driveways, parking lots and roadways throughout the property. Surfaces should be inspected for uneven and free of snow and ice during cold weather.
  • Identifies problem areas before they get worse: If deterioration of common amenities is detected early, it could save the HOA money if repairs are made before the damage becomes even more costly.

Different seasons bring different property risks. Season-specific inspections—such as checking chlorine levels in an outdoor pool during summer, leaf buildup in eaves and gutters in the fall and sidewalks for ice in winter—should be done along with regular inspections. Inspections show an HOA’s insurance carrier that it is proactive in addressing exposures and reducing loss.

Can an HOA inspect a homeowner’s unit?

Shared amenities—parking lots, pools and the clubhouse—are the usual places to inspect, but there may be instances where homeowners are violating rules on their individual properties. Sometimes the rule violation simply has to do with maintaining the aesthetics of the property as stated in the bylaws; but other violations pose serious health and wellness issues or other costly risks to the HOA. For example, if the condominium is a nonsmoking building and some residents choose to smoke in their units, they create a potential fire hazard for all homeowners.

The media has recently drawn increased attention to hoarding behaviors and the dangerous health and environmental problems hoarders can pose for themselves and those around them. This may also be an issue of concern for your HOA.

However, an HOA cannot enter a homeowner’s private unit to investigate potential violations or conduct inspections without his or her permission, unless due to an emergency. In some cases, the HOA may have to obtain a court order, which could be difficult, as the HOA must show probable cause as to why the residence must be entered.

What is the property manager’s role in inspections?

An HOA property manager is responsible for carrying out site inspections according to a schedule determined by the bylaws or the HOA board. Not only do they conduct formal inspections, but they serve as the HOA’s eyes and ears, finding and correcting hazards, and ensuring members and their guests follow the rules for both individual properties and shared amenities.

If your HOA does not have a property manager, the board or another appointed person should conduct the inspections. Keep in mind that inspections should always be fair, especially when it comes to individual homeowners’ properties.

Six HOA Site Inspection Steps

Whether inspecting communal areas of the HOA or a homeowners’ properties, take a comprehensive approach to examine all areas of risk. This may take extra time and effort in the beginning, but will become easier and routine over time:

1.       Check the HOA’s bylaws and state statues: The HOA’s bylaws may have inspection requirements, including the minimum for what should be inspected and how often. Also, look at state statutes regarding inspections; for example, HOAs should check local fire codes and conduct inspections of fire alarms and extinguishers a certain number of times per year, depending on the state. An HOA’s insurance company may also have recommendations for what to inspect and how often. 

2.       Document the inspection: Documenting the inspection results is critical, as it serves as a written record of problems, issues and violations. As with any HOA document, the inspection documentation should be clearly written and professional, as it may serve as evidence in case of a claim against the HOA.

3.       Create an inspection checklist: List all areas and amenities of the association’s property and define the items to check in each area. It’s important to revise or add to the checklist as new issues emerge; but the same checklist should be used for every inspection.

4.       Update the checklist with corrective measures: It’s important to identify problems, but it’s just as important to fix them—either on the spot or in a timely manner. Serious problems should be addressed immediately, but there should also be a timetable for correcting problems of other varying priority levels.

5.       Present site inspection results to the board: Outcomes from site inspections should always be communicated to the board, as the results may require action from the HOA’s leadership and or affect the annual budget. For example, if the inspector notes that the pool is beginning to deteriorate and will need repair, the board should keep this in mind when they discuss the annual budget.

6.       File the checklist with the HOA’s records: Inspection checklists should become a permanent record of the HOA. They serve as a record of maintenance, how problems were addressed and when, and may serve as evidence in a lawsuit.

Inspections are a major component of an HOA’s risk management plan. For more information on inspection basics and insurance for your HOA, contact CMR Risk & Insurance Services, Inc. today.

Avoiding Premise Security Liability - October 2016

Security can be a scary prospect for property managers. While you want to provide your tenants with a safe location to live or work, the level of security you need to provide is not always clear cut, and if it is lacking could potentially make you liable for damages in the event of a crime. Whether you deal in commercial or residential rentals, premise security claims are on the rise and you need to do what you can now to avoid costly litigation in the future.

Increasingly, tenants are looking to receive compensation from their property managers after they fall victim to a crime on leased property, and more and more often courts are ruling in favor of the tenants. While property managers are not responsible for the damages caused by every criminal act, they do have a duty to provide tenants and their guests or customers with reasonable measures of security. When managers fail to do this, they can potentially be held liable for some or all of the damages.

Providing Security

Providing reasonable security measures does not mean that you have to guarantee your tenants 100 percent protection from criminal activity. Even the most elaborate security systems can be beaten by criminals who are properly motivated. The simplest way to avoid liability is to reduce opportunity by eliminating conditions that attracted criminals. Some of the best security features are those that deter criminals from ever attempting to commit a crime. In the event of a premise security claim, it is important to be able to show the court that you have taken the proper steps to eliminate any security concerns that could encourage criminal activity around your property.

Deter Criminal Activity

Consider the following measures as you try to increase security 

  • Lighting: It may seem simple, but lighting can have a big impact on site security, as criminals prefer to target places where their actions can be easily concealed by darkness. Make sure entrance ways, walking paths and parking lots are adequately lit.
  • Locks: Both commercial and residential tenants need a way to properly secure their own spaces. In residential properties, keyed entry should be in place for common areas as well as individual units. Laundry rooms, exercise facilities and lobbies or entrance ways should have automatic locks that prevent unauthorized access.

After locks are installed, they must be checked regularly to make sure they stay in working order. Also, keep an eye on the condition of doors. If they fall into disrepair, their effectiveness as a method of protection will be weakened.

  • Landscaping: A well landscaped property can be an attractive selling point, and if done properly can also improve security. A well-maintained property gives the impression that the premise is under the supervision of attentive management, so show your presence by keeping the grounds well groomed. Additionally, an overgrowth of bushes or trees can create blind spots that can be used to conceal criminal activity. When choosing plants to be placed around windows and doors, pick ones that will remain relatively short, and trim them regularly.
  • Security cameras or on-site security personnel: The decision to employ security guards or install security cameras depends on each individual situation. Often times, such measures are not needed to provide the reasonable amount of security required of property managers, but they can be beneficial in situations where a specific security concern may need extra attention. If the property is located in a high-crime area, security cameras or on-site personnel may be necessary.

Set Expectations

Security can be a big concern for prospective tenants, and the security features of a property can be the incentive needed to close a deal. It should be noted that you should never promise more security than you can actually provide. If you make an exaggerated claim about the security features of a premise, you raise the standard of security a tenant can reasonably expect, even though you are not actually making the property any safer. If a crime were to occur, you would be at an increased risk for legal action. Consult with the experts at CMR Risk & Insurance Services, Inc. for more security strategies.

Potential Environmental and Regulatory Liabilities at Real Estate Entities – Commercial, Industrial and Habitational - September 2016

The most common environmental and regulatory exposures encountered by real estate entities include:

  • Contaminants from known and unknown historical usage/operations or neighboring properties.
  • Investigation and defense due to local and regional soil and groundwater contamination.
  • Air emissions from ammonia-based refrigeration systems.
  • Construction debris containing hazardous materials (e.g. paint cans, tars, etc.)
  • Sick Building Syndrome (i.e. carbon monoxide, mold or bacterial air releases from faulty heating, ventilation or air conditioning systems).
  • Hazardous chemical storage including laboratory chemicals, medical wastes from doctor and dentist offices, dry cleaning solvents, pesticides and herbicides used both indoors and outdoors, etc.
  • Inadequate containment at loading/unloading areas.
  • Inadequate containment for hazardous materials, waste and process areas.
  • Lead, asbestos, PCBs and radioactive material.
  • Methane contamination from buried tree stumps and construction debris.
  • "Midnight dumping" on vacant land parcels.
  • Past landfills, lagoons and other solid waste disposal areas.

This is not an exhaustive list of environmental exposures. It represents the most common environmental exposures for this industry. [Bc_Fname] [Bc_Lname] will work with you to identify environmental exposures that are unique to your business to help you reduce risk. 

Property Management Professional Liability Insurance - August 2016

Property managers wear many different hats in the course of their jobs. In addition to overseeing the maintenance, security and overall welfare of the properties they manage, at times they may also function as leasing agents, real estate agents, appraisers, consultants or construction managers. To do so, they must be knowledgeable and up to date on zoning regulations, tenant laws, tax information and property values. In addition, they are responsible for making sure lease agreements, purchase and sale agreements, and work orders are complete, accurate and submitted to the proper authorities when necessary.

Due to the wide array of duties and responsibilities they have and the tight deadlines they operate under, even the most thorough and meticulous property managers inevitably make errors. Whether it’s an error of commission, such as entering the wrong information into a purchase agreement, or an error of omission, such as failing to disclose known pollutants, the result is often the same—a lawsuit.

Without the right type of insurance, the cost of defending a lawsuit can be financially devastating for a property management company. Property managers often mistakenly believe their Commercial General Liability (CGL) policies will protect them from lawsuits stemming from a negligent act, error or omission, but a typical CGL policy only covers bodily injury, property damage, personal injury and advertising injury claims. To protect themselves from claim—such as negligence, misrepresentation, inaccurate advice, and violation of good faith and fair dealing—property managers must instead turn to property management professional liability insurance.

What is Property Management Professional Liability Insurance?

Property management professional liability insurance, also known as Errors & Omission (E&O) insurance, is supplementary liability insurance designed to safeguard a business against a catastrophic loss in the event of a lawsuit due to a negligent act, error or omission by the property manager or someone in his or her employ. The policy covers the sizable legal defense costs incurred during the course of a lawsuit as well as the final judgment if the business owner does not win the lawsuit. In addition to claims of error, omission or negligence, this type of coverage can also be designed to protect against slander, libel and breach of contract. Policies typically do not provide coverage for non-financial losses or for intentional or dishonest acts. 

Property management professional liability insurance policies generally have both a claim limit and an annual limit, which is based on the insured’s exposure. The claim limit is the maximum amount that will be paid for any single event, and the annual limit is the maximum that will be paid in any one year. Typical limits range from $250,000/$500,000 to $2,000,000/$4,000,000 and differ depending on the individual business. Because there isn’t a standard policy, an experienced agent who understands your needs is invaluable.

Call us today at [B_Phone] to learn how property management professional liability insurance fits into your unique risk management portfolio.

Owners and Contractors Protective Liability - July 2016

During construction projects, project owners and general contractors can often face a significant amount of liability from the actions, omissions and general supervision of others—such as contractors and subcontractors. If they cause an injury or other damage to a third party, owners and contractors can often also be held liable.

In many cases, these liabilities can be covered by obtaining an owners and contractors protective (OCP) liability policy. However, it’s important to know the advantages and disadvantages of OCP policies, as well as other coverage options that may provide more protection.

The Basics of OCP Policies

Obtaining an OCP policy is similar to being added as an additional insured to a commercial general liability (CGL) policy, but with some important distinctions.

For example, if a project owner wants to obtain an OCP policy to be covered for the actions of a contractor, the contractor would purchase the policy with the owner as the named and primary insured. The OCP policy would then provide coverage for the owner separate from the contractor’s CGL policy, and the two policies would have separate insurance premiums and limits.

OCP and CGL policies also have different coverages. While CGL policies are designed to cover a wide variety of liabilities, OCP policies instead have a more limited scope and are designed to supplement other policies in certain cases. Specifically, OCP policies cover the named insured for the following:

  • The vicarious liability for the acts or omissions of contractors or subcontractors
  • The liability for acts or omissions in the general supervision of the operations of contractors or subcontractors

The Pros and Cons of OCP Policies

As a separate insurance policy, OCP plans offer a number of advantages:

  • OCP policies offer separate limits that are unaffected by the liability policies of contractors or subcontractors.
  • Triggered losses under an OCP policy usually do not lead to increased premiums for CGL policies.
  • The named insured enjoys additional benefits, such as advanced notice of plan cancellations.

Unfortunately, the limited coverage of OCP policies can also have some disadvantages:

  • OCP policies will not provide coverage if the named insured is found to be solely at fault for a loss involving a contractor or subcontractor.
  • The coverage for “general supervision” in OCP policies is usually left undefined and can lead to a lack of coverage.

Additional Considerations

Before you obtain an OCP policy or are added as an additional insured to a CGL policy, you should ensure that your coverage meets the insurance requirements and provisions of your construction contract. Call us today at [B_Phone]; we can help you find the coverage you need to ensure your success. 

Focus on Safety When Using Pesticides - June 2016

As part of your job, you handle, use and work around herbicides and pesticides. While these products are very effective in repelling pests, they can also pose serious health hazards. The good news is you can prevent exposure to yourself and others by following these simple safety guidelines.

Read the Label

If a chemical is new to you, always read the full product label to learn about safe and proper use.  

  • If the label warns against exposure to the eyes, lungs, skin or clothing, wear the right gear to protect your body.
  • Follow the directions on the label regarding how to apply the product and what equipment must be used.
  • Notice the first-aid instructions in case of an accidental poisoning.
  • Follow directions regarding how to store and dispose of the product after usage.

Protect Yourself and Others

Your best line of defense against exposure to chemicals is wearing the right protective clothing for the job. This typically includes a long-sleeved shirt, long pants, non-absorbent gloves (no leather or fabric), rubber boots (no canvas or leather), a hat, eye protection, a mask, an apron, face respirators and/or dust mist filters. Also:

  • Check your clothing for defects and holes before wearing it while handling chemicals. Do not smoke, eat, drink, apply cosmetics or use the restroom directly following or while you are using herbicides and pesticides.
  • Be mindful of where other people are located when applying chemicals.
  • Do not use herbicides and pesticides when winds are stronger than 10 mph to avoid blowing the chemicals to unwanted areas or onto other workers or passersby.
  • Post signs when you spray an area, so others who visit the building are aware.

Cleanup Procedures

  • After application, rinse your tools and equipment three times. Then pour the rinse water into the pesticide container.
  • During application, chemicals may settle on you and your clothing, and can be carried into your vehicle and your home. Immediately wash areas of your body that came in contact with the product, and shower promptly after completing cleanup and storage procedures.
  • Assume that clothing used while working with pesticides and herbicides has been contaminated, so take the following precautions:
  1. Always remove contaminated gear prior to leaving the worksite.
  2. Place clothing in a plastic bag and wash it separately from your street clothes.
  3. Boots, gloves and goggles used at the application site also need to be cleaned prior to leaving the site.

Storage and Disposal

  • Keep all chemicals in the original manufacturer’s container.
  • When chemicals are not in use, store them in designated areas only.
  • Disposal requires special handling. Check the label and follow our safe handling procedures. If you don’t know how to dispose of something safely, ask before you toss it! Improper handling is bad for the environment, and poses fire and health hazards.

Above all, always be smart as you apply or spray. Employee safety is [C_Officialname]’s top priority, so we expect you to do your part in following all safety procedures when working with herbicides and pesticides.

Secure Parking Facilities - May 2016

Whether an organization owns a parking structure or provides parking facilities to employees through a third party, there are a number of associated risks that must be addressed. In addition to slip and fall hazards, those utilizing a parking structure could be vulnerable to auto accidents, theft, harassment and assault. To compound the issue, parking lots and structures typically have lax security, which can make protecting employees and patrons all the more difficult. Thankfully, there are a number of measures parking structure owners and property managers can implement to mitigate the above risks—measures that employers should also look for when utilizing a third party for their parking needs.

Design

Reducing the risks associated with parking structures and parking lots can begin as early as the initial design phase. There are a number of elements to consider to promote overall safety.

For instance, stairwells and elevators should be located in areas where they are readily visible to an attendant, on-site security officer or the general public. If possible, elevators and stairwells should have glass incorporated into their construction for improved visibility. That way, in the event of an incident, onlookers can easily assess the situation and provide the appropriate help.

In addition, installing cylindrical concrete supports instead of square ones allows drivers to more easily see around corners, thus reducing the number of auto accidents. Speed bumps placed on long straightaways can prevent drivers from accelerating to dangerous speeds.

Overall, a strong parking structure design will encourage a pedestrian’s natural surveillance—one’s ability to observe and assess his or her surroundings. Ensuring that patrons and the general public can easily view everything that’s going on in the structure can help prevent auto accidents and deter potential criminals.

While full visibility is generally easier to achieve in open parking lots, there are a number of tactics that can improve natural surveillance in a parking structure. Some strategies include constructing high ceilings, trimming back any shrubbery that obstructs views, creating sightlines from the parking structure to the street, and limiting the number of entrances and exits to the parking structure.

Signage

Posting different types of signage in and around a parking structure can bolster overall safety in a variety of ways. For instance, stop signs that are strategically placed around turns or long straightaways can limit accidents by slowing down drivers.

In addition, signage can help clearly direct pedestrians to important safety items—exits, elevators, emergency phones, fire extinguishers, etc.—or away from the path of vehicles. It’s important for each floor of a parking structure to be clearly labeled to further direct pedestrians, allowing them to move in and out of the structure quickly and safely.

In general, signage should utilize a large font and bold colors. This ensures that signs will catch the eye and be easy to read.

Lighting

Lighting is one of the most important aspects of parking structure and lot safety. This is because proper lighting practices can reduce the risk of theft, harassment and assault, as it eliminates potential hiding places from security or passersby.

In general, parking facilities should have no major dark spots, and heavily trafficked areas should be well-lit. Most experts suggest that areas in the structure or lot be illuminated by at least two sources of light.

Specifically, lighting in a structure or lot should take into account the following:

Intensity. Avoid soft lighting whenever possible. Most parking facilities utilize metal halide lighting, as it is both bright and easy on the human eye.

Uniformity. When lighting a parking facility, keep in mind that overlapping areas of light is recommended. This will help ensure that there are no major shadows. For added safety, the perimeters of garages and lots should also be illuminated.

Access Control

Many employers look for access control measures—automatic gates, card access, etc.—when considering parking structure and lot safety.

Commonly, parking facilities utilize a ticketing system that requires patrons to purchase access to parking. While this does not completely eliminate access of the parking facility to the general public, it does provide a paper trail that law enforcement officials can follow in the event of an incident.

Fencing placed around the perimeter of a lot or in private areas of a structure can also be a particularly useful access control measure, as it reduces the potential for trespassing. It may also be a good idea to fence off potential hiding areas, like gaps under stairwells or dark corners in elevator lobbies, for would-be attackers. These barriers typically consist of concrete blocks or chain-link fencing.

In general, the above measures are best implemented in the initial design and building of the lot or structure.

Surveillance and Security Measures

For ongoing, 24-hour safety, active security systems are often the best option—especially for parking structures. There are a number of surveillance and security measures to consider, all with their own unique benefits, including the following:

• Security personnel. Simply having a uniformed security officer on site can be enough to deter potential criminals. To be effective, patrol officers will have to vary their routes and schedules to avoid creating predictable gaps in security coverage.

• Closed circuit television (CCTV). CCTV is a strong method of surveillance, as it creates an instant record of incidents such as theft, assault or auto accidents. Because CCTV is dependent on visibility, appropriate lighting measures will need to be in place in order for the surveillance to be effective. In addition, without a proper response plan in place, CCTV could be a wasted expense. Ensure that your staff is trained on what to do when an incident occurs.

• Emergency phones and intercoms. Easy access to emergency phones and intercoms can be critical if a patron is under attack or if there is another emergency. These systems are best installed in well-lit and easy-to-reach areas near elevators, lobbies, stairs and parking spots.

For added safety, consider including signage that clearly states that the area is under surveillance. This can be a strong deterrent for criminals.

General Upkeep

Ongoing housekeeping is important for continued safety. When a parking facility is littered with garbage, it can appear as though no one is responsible for the area and that surveillance is lax. Regularly inspect the facility, cleaning debris and removing abandoned vehicles when applicable.

Maintenance crews should also be responsible for trimming back any shrubbery. In general, it’s important that things like bushes and tree branches do not block any sightlines in and out of the parking structure. Doing so will promote natural surveillance and eliminate potential hiding spots for criminals.

Snow Removal

Prompt removal of ice and snow can greatly reduce the risks of slips and falls. When removing snow and ice from a parking garage, keep in mind the following:

• Snow should never be piled on top of a parking structure, as this can put too much strain on the supports, which, in turn, could lead to collapse. Experts suggest safely dumping the snow over the sides of the parking structure or loading it into trucks and moving it off the premises.

• Be careful when using snowplows, as their sharp blades can damage concrete. Experts suggest leaving the blade at least half of an inch above the concrete surface.

• Plowing should never be done near any of the parking garage’s joints or curbs, as damage to these supports can lead to structural issues. As such, it’s important to clearly and prominently label these areas, especially if you utilize a third party for snow removal.

• When removing ice, sand is generally preferred over road salt. This is because many de-icing agents and chemicals are rendered useless during times of extreme cold.

As snow and ice melts, utilize “wet floor” signage in areas where fall hazards are especially prevalent. To further decrease the risk of falls, immediately repair any cracks in the concrete caused by wintery conditions.

Mitigating Risk Starts Early On

In order to implement the preventive safety and maintenance measures listed above, many parking structure and lot owners have professional risk assessments done. These assessments can help identify major risk areas, providing businesses with strategies on how to address potential hazards. Risk assessments should be done early on to ensure that parking structure and lot owners are proactive instead of reactive.

It should be noted that risk management for parking structures and lots is an ongoing process. The key to keeping patrons safe is knowing what hazards to anticipate and how to address them.

For insight into more industry-specific risks, contact CMR Risk & Insurance Services, Inc. today.

Be on the Alert to Prevent Violence - April 2016

Workplace violence includes any act in which a person is abused, threatened, intimidated or assaulted in his or her employment. Whether it stems from work-related disputes or domestic abuse or personal issues, violence can occur inside or outside the workplace, and can range from threats and verbal abuse to physical assaults and homicide.

Identifying Your Risk

Those working in real estate and property management are at particular risk because of certain characteristics of workplaces:

  • Mobile workplaces
  • Working alone or in small numbers
  • Working late hours of the night or early hours of the morning
  • Working in isolated or low-traffic areas
  • Working near businesses or buildings that are at risk of violent crime
  • Working in high-crime areas
  • Working with the public

Workplace violence can include actions or words that endanger or harm you or your co-workers, including:

  • Verbal or physical harassment
  • Verbal or physical threats
  • Assaults or other violence
  • Any other behavior that causes you to feel unsafe (bullying or sexual harassment)

Staying Safe

At [C_Officialname], we’ve taken steps to keep you safe on the job. As we emphasize in our Workplace Violence Prevention Program, we do not tolerate threats, bullying, harassment or any other form of violence. However, keeping our workplace as safe as possible requires the commitment of all employees, including you.

Although nothing can guarantee that you will never be a victim of workplace violence, many incidents are preventable. Contribute to the safety measures and other efforts that we have in place by following these guidelines:

  • Be aware of and report threatening behavior, and be alert for other signs of aggression or violent behavior.
  • Take all threats seriously.
  • Follow procedures established by our Workplace Violence Prevention Program, including those for reporting incidents.
  • Learn how to recognize, avoid or diffuse potentially violent situations by attending personal safety training programs.
  • Alert supervisors to any concerns about safety or security, and report all incidents immediately in writing.
  • Avoid traveling alone to unfamiliar locations whenever possible.

Be Aware!

The most important thing you can do is stay alert and aware of potentially dangerous situations or threatening behavior. Make sure that you are effectively trained in conflict resolution and methods of handling dangerous or violent situations.

We will do our best to protect you from workplace violence. Be aware of the risks of your surroundings in order to help protect yourself.

The Role of an HOA and Condo President - March 2016

Similar to the CEO of a company, the president of a homeowners association (HOA) plays the primary role in decision-making and overseeing the day-to-day administration of the association. Some HOA presidents receive compensation, but most are unpaid volunteers, filling a role that can be rewarding, but often unappreciated.

Whether you’re compensated or not, your role as president should not be taken lightly. Accepting an HOA board position is serious, as you are charged with safeguarding the personal investments of all HOA members. Care must be taken to ensure homeowners’ concerns and matters are resolved to the satisfaction of all parties involved. Understanding the responsibilities of an HOA president—and the risks related to the role—is important for anyone serving in the position.

The President’s Responsibilities

Being an HOA president requires a great deal of interacting with people—homeowners, the property manager, other board members and the outside community. Patience and flexibility are key qualities for the position. You must make every decision in a fair and just manner, avoiding favoritism and making decisions in self-interest.

The HOA’s bylaws usually dictate how often a new president should be elected. If not, it’s a best practice to re-elect a new president every few years to get a fresh perspective and also to avoid the potential for embezzlement of the association’s funds.

The bylaws also outline the president’s responsibilities, which can vary from one association to the next. As HOA president, some major responsibilities include:

• Presiding over board meetings. Develop the agenda before the meeting and keep the meetings on track.

• Maintaining accurate records. This is mainly the responsibility of the board secretary, but the president is ultimately responsible.

• Reviewing local laws before passing rules. HOAs are dictated by state laws; the president is responsible for understanding the laws that apply to the association.

• Communicating frequently and consistently with the association. This includes distributing copies of board meeting minutes and keeping all homeowners informed of changes.

• Monitoring the association’s activities on a daily basis. Carry out day-to-day administration of association policies set by the board, and ensure that projects are completed.

• Working with the board to develop a budget and a plan for reserve funds. This is mainly the responsibility of the board treasurer, but the president is ultimately responsible.

• Executing contracts, bank documents and other legal documents on behalf of the association as its agent. As a best practice, obtain three bids for every contract to ensure that you receive a fair price.

Outside the Scope of a President’s Role

While HOA presidents have many responsibilities, there are some matters that fall outside of their scope. Presidents are not property managers. An HOA usually hires a property management company or a property manager to monitor the day-to-day activities of the association. In fact, it’s unwise to have the president also serve as the property manager, as it increases the chance of fraud or inaccurate bookkeeping. An HOA president interacts with property managers, acting as a liaison between the property management company and the HOA’s board.

Presidents are also not “property police,” and should not be responsible for enforcing swimming pool hours, removing children from the fitness center, etc.

Risks of the HOA President’s Role

As president of your HOA, you must identify and address the risks of your position. You will be the person that homeowners go to when they have a problem; and with owning property, problems are inevitable. Since homeowners have a high personal stake in their investments, it’s natural to assume they will be frustrated if their concerns and issues are not resolved in a timely manner or in their favor. Your role may come with more liability than you expected. Lawsuits can result from homeowners who aren’t satisfied or think their concerns haven’t been properly addressed by the board.

Similar to the director or officer of a corporation, an HOA president also has fiduciary responsibilities. This means that a good faith effort must be made to make decisions in the best interest of the association. Presidents breach their fiduciary duties when they act negligently, commit a crime or benefit personally at the expense of the HOA.

Poor and infrequent communication can lead to additional problems when homeowners are uninformed of decisions or changes. You must ensure that communication between the homeowners, the property manager and the other board members keeps all parties up to date of the happenings in the association.

How to Mitigate the Risks

One of the primary ways to mitigate the risks of your position is to build a solid, knowledge base of the HOA’s governing documents and applicable local laws. Even if you are fairly new to the position, you will still be expected to make informed decisions in the best interest of the association.

Also, familiarize yourself with the history of the HOA, including past plans by the board and how issues were previously handled. Make sure you are consistent with handling issues as they’ve been handled in the past and don’t spring drastic, despotic changes on members. Know your fiduciary duties and make sure every decision the board makes is made in good faith and in the members’ best interest.

When working with the board focus on creating and setting policies, but leave the implementation and enforcement of those policies to the property management company. As president, you oversee the administration of the association, but you should not be monitoring day-to-day activities.

You can also mitigate risks in the following ways:

• Foster team spirit in the association and encourage team building.

• Communicate consistently between the property manager and the board.

• Consult an attorney before getting involved in legal disputes.

• Avoid letting personality differences with other board members prevent the board from getting work done.

• Spend money prudently and build a sound financial future for the community. Obtain advice from a financial advisor, if necessary.

• Preserve and enhance all common areas, which is one of the reasons people want to join HOAs.

If you have additional questions about the risks of serving as an HOA president or as an association board member, contact CMR Risk & Insurance Services, Inc. today.

Avoid Lawsuits with Good Tenant Relationships - February 2016

Investing the time and money required to maintain and cultivate a positive working relationship with your tenants can be the difference between amicably settling differences and a costly lawsuit. Working on the relationship also creates value by maximizing tenant cooperation with timely rent payments, property upkeep and longer lease terms.

Screening Potential Tenants

Conducting a background check on prospective tenants is a wise way to ensure a mutually successful experience for you and the applicant, and it is an effective risk management tool. Background checks do present some costs, but the risk of not performing the screening on tenants could have more serious financial consequences, resulting in lost income, property damage and litigation costs. Elements of a thorough background check include the following:

  • Criminal history
  • Credit check
  • Previous landlord verification
  • Identity verification
  • Employment verification

Take Care of Your Property

Taking measures to properly maintain the premises sends a powerful message to tenants. It proves that you take your role as building manager seriously and encourages them to take pride in the condition of their rented space. Better, it could bolster relationships and lessen the probability that they will take legal action in the event of an incident or dispute. Take these measures to be prepared for maintenance issues:

  • Establish a procedure for dealing with maintenance requests that guarantees prompt service to tenant requests and maintenance issues.
  • Create, clearly communicate and promptly enforce policies regarding shared spaces.

A good working relationship with tenants minimizes the likelihood of costly lawsuits and maximizes cooperation with timely rent payments, property upkeep and longer lease terms.

Security Measures

States and municipalities have differing legislation regarding the duties of building owners and managers. Although you may not be expected to guarantee the safety of tenants, visitors and guests, you must exercise reasonable care to protect them from foreseeable events. What’s more, security measures make tenants feel safe, strengthening your relationship with them and lowering the likelihood of a lawsuit. They can also potentially lower your insurance premiums.

Focus on Customer Service

Taking extra steps to make tenants feel welcome helps to create a cooperative relationship that is unlikely to end in legal litigation. Small gestures such as the following can dramatically improve the relationship you have with tenants:

  • Prompt, polite responses to requests
  • Support during moves
  • Clearly outlined policies and swift enforcement for all tenants

Transferring Risk

Even with positive landlord-tenant relationships, there are potential exposures that must be addressed with well-designed property and liability insurance policies. For more information, contact the insurance professionals at CMR Risk & Insurance Services, Inc. today.

Keeping Minutes at Condo or HOA Board Meetings - January 2016

Productive board meetings—where important homeowner matters are discussed and decisions are made—contribute to the success of a condo or homeowners association (HOA).

Since HOA board meetings result in significant decisions that impact community members, it is necessary to record decisions in official board meeting minutes, which serve as both a historical record and provide pertinent information to the HOA community.

Investing the time to record accurate and detailed board meeting minutes can reduce potential litigation risks for HOA board members, as minutes could be used as evidence in the event of a legal claim.

What are Board Meeting Minutes?

Board meeting minutes are a written record of the official actions taken by the HOA directors and officers during scheduled meetings. The minutes document the topics discussed and record the decisions voted on during meetings. The minutes can also contribute to the efficiency of future board meetings by serving as a reminder of what was previously discussed to avoid rehashing old business.

There are two main purposes of board meeting minutes:

  1. The minutes inform members of decisions made that impact their living community. All HOA members have the right to access non-confidential meeting minutes.
  2. Meeting minutes could serve as evidence in the case of a lawsuit. In the event that someone, such as a member, sues the HOA, the minutes are proof of decisions that were made.

For officers and directors on the HOA board, meeting minutes are valuable evidence that the board made decisions in good faith and fulfilled its fiduciary duties to the association. On the other hand, the minutes can also serve as evidence that a director did not fulfill his or her fiduciary duties.  


Recording accurate board meeting minutes can prevent potential litigation risks for HOA directors and officers.


What Should the Board Meeting Minutes Include?

Board meeting minutes should be easy to read and include only essential information. Most importantly, members should be able to understand what board actions were taken and approved.

While board meeting minutes can be handwritten during the meeting, the final version should be transcribed into a typed format. At a minimum, the minutes should include the following:

  • Name of the HOA
  • Date, time and location of the meeting
  • Names of directors and officers present at the meeting, and the names of those not present
  • Names of guests in attendance, including those invited to speak at the meeting
  • Whether or not a quorum was present
  • All board actions
  • The signature of the board secretary or another official designated to sign HOA documents
  • Supporting documentation (attached to the minutes), as applicable

It is the board secretary’s responsibility to record and certify the minutes, unless another person is designated. Keep in mind that all of the board directors and officers may be held liable if the minutes are falsified or embellished.

After the meeting, the minutes should be made available to all HOA members. Some HOAs choose to mail or email the minutes to members after the meeting.

A printed copy of the meeting minutes should be kept in the HOA’s “board minutes book,” and an electronic copy should be also be stored.

What Should the Meeting Minutes NOT Include?

The minutes should include substantial details on the board’s actions; however, minutes with too much detail could be evidence for unwanted lawsuits, such as defamation claims. Minutes do not need to be a transcript of all interactions.

Avoid recording the following information:

  • Names of HOA members present at the meeting
  • All the conversations and discussions that took place during the meeting
  • Owner comments during the meeting
  • Confidential or sensitive information

 HOA boards should discuss confidential or sensitive information in a separate meeting. Minutes that contain sensitive information should be kept in a different file from the regular meeting minutes book. Members should not be able to access confidential minutes.

General Recordkeeping Tips

Meeting minutes are a valuable communication tool and may be used as evidence during a lawsuit. Board meeting minutes—and all HOA communications—should be:

  • Typed
  • Neat and organized
  • Easy to read
  • Free of undefined acronyms and jargon
  • Free of spelling and grammatical errors

Contact CMR Risk & Insurance Services, Inc. today for additional resources to manage and protect your HOA.


Winter Weather Liabilities - December 2015

The winter months bring more than just cold weather and shorter days; they bring the possibility for winter storms that may result in a snow- and ice-covered landscape. While it may be a winter wonderland for some, as a property manager, snow and ice buildup means a hazard with the potential for costly liability.

If you deal with either commercial or residential property, you are responsible for the side effects of winter. In legal terms, snow and ice are the same as any other hazard presented on a property, and just like any other hazard, property managers can be held liable if they cause injury. To avoid litigation resulting from winter injuries, it is important that you are vigilant in your snow and ice removal efforts.

Recognizing and Preventing Hazards

Winter brings a variety of hazards that you need to prepare for; slips and falls are by far the most common injury associated with winter weather conditions. Diligent snow and ice removal can go far in keeping walkways and parking lots safe. Remove snow quickly after snowfalls, and salt regularly to keep ice from building up.

Not all winter hazards are under foot, however. Icicles, along with other accumulations of frozen or heavy snow above walkways and building entrances, can cause serious injury if they fall on those below. Remove icicles and other buildup as soon as possible. If it still appears to present a hazard, consider rerouting foot traffic around the area.

Performing preventative maintenance in the summer and fall can also keep you prepared for winter storms. Make sure eaves are properly installed, and check that downspouts are aimed away from walkways. If eaves leak or downspouts direct water onto walkways, snow that melts in the heat of the day has the potential to freeze and create a hazard with cooler nighttime temperatures.

and fall can also keep you prepared for winter storms. Make sure eaves are properly installed, and check that downspouts are aimed away from walkways. If eaves leak or downspouts direct water onto walkways, snow that melts in the heat of the day has the potential to freeze and create a hazard with cooler nighttime temperatures.


In legal terms, snow and ice are the same as any other hazard presented on a property. And just like any other hazard, property managers can be held liable if they cause injury.


Transferring Responsibilities to Tenants

For smaller residential rentals, such as single family homes or duplexes, the responsibility for snow and ice removal is commonly accepted by the tenant. To make sure responsibility is clearly established in this situation, the lease should include a provision citing the tenants as responsible for any snow and ice removal. This section of the lease should also establish how long after a snowfall the tenant has to clear public areas such as sidewalks, as most municipalities have laws requiring prompt snow removal. It is important to be as specific as possible to avoid any unnecessary liability or disputes after heavy storms.

Contracting Snow Removal

Based on the size and number of properties you manage and the average snowfall in your area, you may be inclined to contract out snow removal to an independent company. While this can save you the time and costs associated with managing snow removal yourself, it is important that you choose wisely to avoid complicating matters.

First, make sure the contractor has sufficient resources to meet your demands. It is important that they can be onsite quickly after, or even during, a snowfall to make sure walkways and parking areas are cleared. It is also important that they have the equipment and manpower to finish the task quickly to reduce any disruption to tenants’ lives or businesses.

Second, make sure the company you hire carries the proper insurance, covering both its operations and its employees. The last thing you want is to end up being liable for a worker’s injury when liability for injury is the very thing you were trying to avoid. Also, much like the lease agreement with a residential tenant, it is important to specify the conditions and time constraints for removal in writing. When contracting any type of service, it is essential to have a written contract that will guarantee you receive the services you pay for.

It should be noted that hiring a removal service does not absolve you of liability. If the company you hire provides poor service, or simple does not show up at all, you are still the party responsible for any injury resulting from a winter hazard. Make sure to pick a reputable company that you can trust to do a good job, and always have a plan of action for removal if they are unable to complete the work as quickly or effectively as you require. 

For additional questions on your risks and exposures, or on appropriate coverages to protect you from liability or costly disputes, contact CMR Risk & Insurance Services, Inc. today.


Market Value and Replacement Cost - November 2015

If you own commercial property, choosing a property insurance policy that fits your specific needs is important. A wide variety of policy options are available at different prices that cover an assortment of reimbursement options. Although there are policies that offer a large amount of financial coverage, depending on the type of property that will be insured, it may make more financial sense to pick a policy that still offers adequate coverage while having lower premiums.

Commercial properties can be covered in a variety of ways, and a number of factors can determine whether your property’s value goes up or down each year.  Knowing how much your property is worth and obtaining the insurance policy that both protects you and suits your financial needs is important. The following are descriptions of common types of policies and valuation, and the costs that they generally cover.

Market Value

Simply put, market value describes the estimated amount that a property would sell for on the date of valuation. Any land included in a commercial property is also a part of its market value. The term market value can be used interchangeably with open market value, fair market value or fair value.

A number of factors are considered when a property’s market value is appraised, some of which cannot be influenced by the buyer, seller or appraiser. These include the location of the property, capitalization rates, rent growth rate, the general state of the real estate market and more.

Market value is most often used when buying or selling a property. However, it may also be examined when determining the type of insurance policy to place on a property, or the amount of compensation in the case of a loss.

Replacement Cost

Replacement or reconstruction cost is a type of insurance that covers the cost to replace or repair a building with materials of the same or comparable quality. For the purposes of coverage—and unlike market value—replacement cost policies do not include the value of any land and is determined based on the amount needed to hire contractors and purchase materials to repair a building or construct a replacement.

Theoretically, the replacement cost of a commercial property should be lower than its market value, as the replacement cost only has to take building materials and labor into consideration when determining compensation. However, the costs of materials and labor can fluctuate. This, along with the numerous factors that contribute to market value, makes it possible for the replacement cost of a property to be higher than its market value.

A replacement cost policy offers a large amount of financial protection in the case of a loss, as it does not take depreciation into account when determining compensation. However, it is usually more expensive than other types of coverage and, as a result, may not make sense for every property. Without continuous maintenance and renovations to a property, the value of a building will generally depreciate over time. However, the cost of materials and labor to replace a lost property is generally more fixed. Because of this, it may be better to opt for a less expensive plan that still protects the operations of your business.

Actual Cash Value

Actual cash value policies function in a similar way to replacement cost in that it covers the cost to replace or repair a property. However, under an actual cash value policy there is a deduction in compensation to account for the depreciated value of the original property.

A property covered under an actual cash value policy will be rebuilt or repaired using modern construction techniques and materials. The difference between this cost and the depreciated value of the original property is only covered under a replacement cost policy and not actual cash value.

Actual cash value policies generally have lower premiums than replacement cost plans, and they may make more sense for particular types of properties. For example, a store located in a very old building in a popular urban environment will not depreciate as quickly as a new office building located in a business park. The store is more location-sensitive and does not require a specific type of building to operate, so an actual cash value policy and its lower premiums may make more financial sense than a replacement cost plan.

Functional Replacement Cost 

Another less expensive option for property coverage is functional replacement cost. This type of policy is used when a functionally equivalent building can be found to 

replace the original property at a lower cost than building a replacement. A building’s functional replacement cost is lower than the replacement cost, which results in a reduction in the amount of coverage and correspondingly smaller premiums.

Functional replacement cost coverage can also be used to repair a partially damaged property with less expensive materials, such as replacing a wall with drywall instead of plaster.

The main reason for using functional replacement cost coverage would be to save money with lower premiums, so it may be a good option for properties that use expensive materials that are not necessary to the function of the property or for buildings with intangible value that is not relevant to their commercial function.

Which Type of Coverage Best Fits Your Needs?

The value of any piece of commercial property changes constantly. Knowing your property’s value and obtaining the policy that best suits your needs will safeguard your current and future assets. Contact CMR Risk & Insurance Services, Inc. today to appraise your property’s value and learn more about which type of policy is best for you.

The value of any piece of commercial property changes constantly. Knowing your property’s value and obtaining the policy that best suits your needs will safeguard your current and future assets. Contact CMR Risk & Insurance Services, Inc. today to appraise your property’s value and learn more about which type of policy is best for you.

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Playground Liabilities and Safety - October 2015

Properties with playground facilities are a valuable amenity for families with children. They give children a designated area to play, allowing parents to feel that their children are somewhere safe. However, playgrounds are commonly the site of many injuries, ranging in severity from minor to serious. As a property manager, you need to balance providing a playground facility that is safe and fun, while making sure to protect against the liability that you’re exposed to by having a playground on your property. 

Duty of Care

Some lawsuits related to playground injuries have centered on negligence due to lack of proper supervision. While it is not practical to expect a playground to be monitored every moment children are present, there is an expectation of a reasonable level of adequate supervision. The duty to provide safe play areas and proper supervision should be placed on those responsible for operating playgrounds.

The duty of care owed by a playground operator is the degree of care that a person of ordinary prudence charged with similar duties would exercise in the same circumstances. A public or private landowner has a duty to provide adequate supervision and to maintain the premises and playground surfaces in a reasonably safe condition.

In play areas that are not regularly attended to by a designated supervisor, signs should be posted to communicate common rules for the play area, such as under what age a child must be accompanied by an adult, the hours the playground is open and that glass bottles and alcoholic beverages are prohibited.

Safe Playground Design

Another important liability comes from dangerous or unsafe play equipment. It's important for children to have age-appropriate gear to play on so that they do not injure themselves on improperly sized equipment. When designing a playground for children of all ages, equipment should ideally be separated into three distinct groups: for children under age 2, for 2- to 5-year-olds, and for 5- to 12-year-olds.


Property managers must balance providing a playground that is safe and fun against the liability that comes with operating a playground.


Other safety considerations should be taken into account when planning a playground:

  • Items with moving parts, such as seesaws and swings, should be located in a separate area and allow for ample space for the moving parts.
  • Minimize the number of spaces that could trap a child's head, arms or legs. All openings, such as rungs on a ladder, should be either smaller than 3.5 inches or larger than 9 inches.
  • Wooden equipment should not be cracked or splintered. Any cracked or splintered equipment requires immediate attention for repair or replacement.
  • Any sandbox areas should be inspected regularly before children use them. Be sure that these areas are covered every night to prevent animal contamination.

The selection of safe and age appropriate equipment is just as important as the selection of a safe ground surface for the playground area. Trips, slips and falls will happen and a safe ground surface can reduce the severity of an injury or prevent an injury completely. Concrete, asphalt and blacktop are all extremely hard surfaces and are generally considered unsafe for playground areas. Woodchip ground cover is much softer, but debris hidden in the woodchips, or the woodchips themselves, can cause falls and minor injuries. Rubber mats offer the most stability, especially for younger children, and allows for the easiest wheelchair access. Property managers and maintenance staff should make sure the ground surface stays level and free of debris that could cause children to trip and fall, such as rocks, tree stumps and tree roots.

Protecting Your Risk

Keep informed of the latest in playground safety developments. One of the most authoritative playground safety standards is published by the U.S. Consumer Product Safety Commission in its Handbook for Public Playground Safety. The handbook contains a wealth of information regarding playground surface and equipment hazards. Any playground operator is generally expected to be familiar with these standards, and many states now require that all public playgrounds conform to them.

General liability insurance generally covers claim costs associated with playground incidents, but having a playground facility does increase your risk. Consult CMR Risk & Insurance Services, Inc. to make sure your coverage is adequate and protects your risk sufficiently.

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Tenant Discrimination Liability Insurance - September 2015

Property owners and managers often assume they can avoid tenant discrimination lawsuits by simply avoiding discriminatory behavior. Recent history has shown, however, that acting in good faith isn’t always enough to prevent costly discrimination lawsuits. It’s a lesson that many good-intentioned property owners and managers have unfortunately learned the hard way.

The number of tenant discrimination claims has skyrocketed in recent years, in large part because tenants can now file discrimination complaints online with the U.S. Department of Housing and Urban Development. Many of the complaints have at least some basis in fact, but a growing number are simply “nuisance” claims made by tenants with an axe to grind or who hope to make an easy buck by forcing a settlement. These nuisance lawsuits often leave property owners in a no-win situation: either fight the claim in court and spend a fortune on legal fees or settle out of court in order to make the lawsuit go away. Thankfully, there is another solution—tenant discrimination liability insurance.

How Tenant Discrimination Liability Insurance Can Help

Tenant discrimination liability insurance protects property owners and managers in the event of a discrimination, harassment or wrongful eviction lawsuit—none of which are covered under a typical general liability insurance policy. After the insured meets the deductible, tenant discrimination liability insurance covers legal costs and damages stemming from the following types of claims:

Discrimination, based on:

  • Race
  • Color
  • Religion
  • Age
  • Sex
  • National origin
  • Disability
  • Pregnancy
  • Sexual orientation

Harassment, in the following circumstances:

  • Sexual harassment
  • Non-sexual harassment
  • Assault and battery (if related to sexual harassment)

Wrongful Eviction

It is regrettable that law-abiding property owners are sometimes forced to defend themselves against nuisance tenant discrimination lawsuits, but until the regulatory landscape changes tenant discrimination liability insurance is a property owner’s best defense against discrimination claims. For more information on this valuable coverage, contact CMR Risk & Insurance Services, Inc. at (619) 297-3160.

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Regulations for Working with Lead-based Paint - August 2015

When working at properties that could contain lead-based contaminants, workers need to take extra caution. Not only for the health of themselves and others, but also because of certain regulations from the Environmental Protection Agency (EPA).

Even common renovation and property maintenance activities such as sanding, cutting and demolition can disturb old lead-based paint at one of your properties. Found in a quarter of homes built before 1978 and nearly half built before 1960, lead-based paint can be harmful both in chip and dust form to children and adults. However, lead-based paint dust is the most dangerous because it is invisible and can be ingested unknowingly by both workers and residents.

Because of the tremendous hazard lead-based paint presents to peoples’ health, especially children, the EPA issued the Lead-Safe Renovation, Repair and Painting Program in 2008 (The Program). It requires anyone performing renovations or repairs that disturb lead-based paint in pre-1978 homes and child care or child-occupied facilities to follow safety guidelines, and it has three important parts.

Work Practices to Ensure Safety

The Program requires anyone performing renovation, repair and painting projects in pre-1978 homes to follow lead-safe work practices, which include containing the work area, minimizing dust and a thorough work site cleanup.

The Program prohibits the following practices in the specified pre-1978 facilities because they would exacerbate the disturbance of lead-based paint:

  • Open flame burning
  • Using heat guns at greater than 1,100° F
  • Use of power tools without high-efficiency particulate air (HEPA) exhaust control

Required Educational Materials

The Program requires you, as the building owner that planned on disturbing lead-based paint, to provide the occupants of the building with educational material.

This material is in the form of a lead hazard informational pamphlet called Renovate Right: Important Lead Hazard Information for Families, Child Care Providers and Schools, which is available at www.epa.gov. This pamphlet must be distributed before renovation work begins, and people with no control of repairs/renovations in their facility, including rental tenants or parents of children at a child-occupied facility, must sign a pre-renovation form (also found at www.epa.gov) to ensure that they were informed of the work being done, the risks associated with it and how they can stay safe.

Certification and Training

The Program requires all organizations that perform renovation, repair or painting work on a pre-1978 home or child-occupied facility become certified. To achieve certification, the firm must apply with the EPA, or to the state if there is an EPA-authorized state renovation program, and pay a fee.

Once the organization is certified by registering with the EPA, then a member of the organization can take an EPA or state training course to become a Certified Renovator. To find a provider who teaches the proper Lead Abatement course in your area, call the National Lead Information Center at 1.800.424.5323. In projects where lead-based paint is disturbed, there must be one or more Certified Renovators assigned to the job. Both the organization and Certified Renovator certifications are valid for five years. All renovation workers involved with the lead-based paint job must be trained as well, but they can be trained on the job by the Certified Renovator to observe safe lead work practices. Organizations working in these situations are required by the Program to keep records demonstrating the lead-safe work practices used on the job, and the EPA has developed a recordkeeping checklist to help renovators with compliance. The checklist can be found on EPA’s website.

Exceptions

All these requirements apply only to paid renovators who work in pre-1978 housing of child-occupied facilities and include renovation contractors, lessors, maintenance workers in multi-family housing and painters or other specialty trades. The EPA defines child-occupied facilities as residential, public or commercial buildings where children under age 6 are present on a regular basis. However, there are several exceptions to the Program where certain kinds of property are not included.

In the following situations, occupants do not need to be given the Renovate Right material and renovators working in these capacities do not need to be lead-certified by the EPA.

  • Renovations occurring on housing for the elderly or disabled, unless children under the age of six also live in these residences
  • Renovations on zero-bedroom dwellings such as studio apartments or dormitories
  • Renovations on housing that is pre-1978 but has been accurately tested and confirmed by inspection to be lead-free
  • Emergency renovations or repairs
  • Minor repairs, which are classified as disturbing less than 6 square feet of paint on inside surface or less than 20 square feet of paint on outside surface. The EPA does NOT classify window replacement as a minor repair.
  • Homeowners performing renovation, repair or painting work in their own homes

One important note is about homeowners performing renovations/repairs to their own homes but who rent part of the home or building out to tenants. If you receive rent, it is considered compensational pay and you are required to become certified and provide informational materials in accordance with the EPAs requirements for paid renovators. 

 

 

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Testing your Fire Sprinkler System - July 2015

A sprinkler system is designed to control a fire. Simply put, the most common type of sprinkler system is water-based andconsists of piping with heads attached.

The piping is connected to a water source that supplies water to the sprinkler heads. Each sprinkler system has a control valve which allows water into the sprinkler system and a devise to actuate an alarm when the system is in operation.

A sprinkler system must have a device that sounds some type of alarm. As such, its purpose is to detect a fire. At the very lease it must contain a flow switch that detects movement of water within the system and sends an alarm signal to a control panel that rings at the property where the sprinkler system is located.

Most companies hire a specialty company to monitor and maintain their sprinkler alarm, however this does not include inspecting the piping, heads and water supply which play a crucial role in controlling fire.

To properly test your Fire Sprinkler System both the Fire Alarm System and Sprinkler System should be tested.

National Fire Protection Association (NFPA) 25 Standard forthe Inspection, Testing and Maintenance of Water-Based Fire Protection systems 13 is the technical resource which should be used to develop testing criteria, frequency of testing and what components needs to be inspected.

Sprinkler systems should be inspected annual PLUS a moredetailed five-year inspection (and certification testing) is most likely required by your State Fire Marshall.

NFPA 25 and NFPA 72 National Fire Alarm code are the technical resources that should be used in testing fire alarms. These codes require the alarms be inspected on a quarterly basis.

It may come as a surprise, but most contractors do not perform both tests, therefore you should not be concerned with having to hire one contractor to maintain the alarm system and another contractor to inspect the rest of the sprinkler system. You can find contractors through:

Sprinkler Maintenance:
CA American Fire Sprinkler Assoc.
www.cafsa.org

National Fire Sprinkler Assoc
www.nfsa.org/index2.htm

Alarm Contractor:
CA Automatic Fire Alarm Assoc
www.cafaa.com/members.htm

Once a fire starts it will eventually go out. However,what happens between the start and finish of a fire can be a disaster. A sprinkler system can save lives, preserve buildings, and ensure business continuity only if it works. Being proactive in keeping a system maintained can go a long way to help it do its job. Remember the life, building or business you save may be your own!

Are You Prepared for the Next Power Outage - June 2015

Power outages are a fact in business, either through storms, planned browounts or accidents to the powergrids.  These outages can shut down pwer to an entire city, no one is spared. Businesses with many visitors and guests, like hotels, are especially hard-hit. Despite what most believed to be adequate planning, guestsa nd employees were still inconvenienced.

  • Electrically operated room access systems failed, locking guests out until master keys couldbe located.
  • Toilets with electronic sensors would not flush.
  • Guests and employees were trapped in elevators.
  • Emergency lighting systems ceased operating after a few hours, leaving interior halls and stairwells dark.
  • Telephone systems didn't work.
  • Some emergency generators failed to operate, and those that did, soon ran out offuel.

Widespread power outages may become more common as demand increases and the threat of terrorism continues. The likelihood of such incidents has led many real estate  operators to realize how vulnerable they are during power outages.

Planning is the key
Businesses that weathere outages with few or no losses have one thing in common - good planning. Those facilities plan for emergencies, including power failures. Some hotel chains, for instance, maintained a supply of bottled water, flashlights and "glowsticks" (devices that contain chemicals that glow for several hours) and pre-printed notices for guests that explained the hotel's emergency procedures.

How good are your emergency plans? Do you even have any?

Who can help?

The best place to begin your planning process is with your localauthorities.

How quickly can emergency crews rescue people trapped in elevators?

Where can you send injured or ill visitors or employees?

Will medical services or response time be impaired?

What ifyou are forced to house visitors or employees and run out of water ornon-perishable food?

Generators
Back-up generators are a good start, but they require a significant capital investment to install, a difficult expenditure to justify during times when occupancy rates are low. Most generators are fueled by natural gas or diesel fuel, which require regular testing and maintenance. Manufacturers usually recommend a weekly start-up check and a monthly test under a full load that simulates actual use. The size of your fuel tank is a major consideration.

Communications
Don't forget communications. If the power is down, cell phone networks will probably be overwhelmed. A battery-powered radio may be your only means for staying in touch with authorities and critical news reports. Keep at least two radios and extra batteries handy. Consider a radio that has a built-ingenerator.

Lighting
Adequate lighting is important for the safety of your guests and staff. Many newer facilities have interior hallways with minimal or no natural light source. Most emergency lighting units are designed to operate long enough for occupants to escape - and usually no more than an hour or two. Consider equipping each room with flashlights and/or "glowsticks." Provide your staff with heavy-duty, long-lasting flashlights.

Water
Does an electric pump feed your fresh water supply? Do you have gravity fed reservoirs? If so, how long will the supply last? As a rule of thumb, base the amount of back-up water on your occupancy history, figuring at least one liter per-person per-day, more in hot, dry climates or weather.

Other considerations
Don't forget blankets, non-perishable food supplies, and first aid kits.

Lessons Learned: Maintenance Prevents Slips and Falls - May 2015

Loss Amount: $37,000

What Happened:

An elderly customer tripped on an exposed pipe and fell in a shopping centerparking lot. The accident resulted in a broken hip, as well as other injuries.

The shopping center parking lot was deteriorating. A curb, located between twohandicap parking spots, was chipped away, leaving the exposed pipe protrudinginto the pedestrian walkway. A tenant reported the hazard to the PropertyManager on several occasions, yet nothing was done to repair it.

The tenant who called the ambulance and assisted the injured customer did notcomplete an accident investigation, since the injury did not occur in theirstore. The names and numbers of witnesses, which were not obtained, could havebeen helpful in verifying facts.

Other circumstances might have contributed to the customer's fall. She had a historyof falling, which might have resulted from medication or blurred vision. Shehad fallen four times in the last nine months and ten times within the last fewyears. These factors were negated by the physical hazards.

Lessons Learned:

Suggestionsfor preventing loss:

  • Property managers should complete detailed property inspections on a regular basis, andcorrections should be made immediately.
  • Property Managers should use a checklist to assure they are looking for all key hazardsand exposures.
  • Handicap spaces should be highly maintained since users are more prone to lose theirbalance.
  • Building owners should have a formal procedure for tenants to notify management of anyhazards or deficiencies at a property (preferably, a written form). It should include fax and email reporting capability - for convenience and quick notification. This type of notification can be especially helpful when there is no on-site maintenance or management.
  • Property Managers should be aware that parking lots and sidewalks present common slip, trip and fall hazards, especially when there are potholes, speed bumps and concrete parking stops. Water, ice, snow, oil, leaves and other debris can alsocreate serious hazards.
  • Tenants lease agreements should have a clause that requires them to notify managementof any hazards.
  • Tenants should be given accident reports to complete if an accident occurs on the property.

Historic Property Insurance Coverage’s - April 2015

Are you aware that tailored coverages exists speciallydesigned for owners of historic properties?

Not only are currently certified buildings eligible forcoverage-- such as those listed in the National Register of Historic Places-- but also buildings eligible for certification and vintage propertiesthat possess the age, significance and integrity of certified structures.

Historic Property Coverage was created to help owners ofhistoric properties protect their investment by replacing features that wouldbe difficult and expensive to duplicate. It also helps you maintain andpreserve your property if you are faced with increased tax assessments, changesin local laws and certification expenses.

If you own historic property, you may be interested in thefollowing coverage:

Historic Replacement Cost
If you experience a loss or damage, this will repair orreplace your historic property with the same materials, workmanship andarchitectural features -- provided they are reasonably available. If thematerials are not reasonably available, this will repair or replace them withmaterials that most closely resemble those that existed before the lossoccurred.

Extended Replacement Cost
This will provide you with a cushion of extra protection ifyou need it -- with coverage up to 150 percent of the agreed replacementcost (the cost assigned by a qualified appraiser and agreed upon by you andyour insurer).

Guaranteed Replacement Cost
This will take replacement cost protection even further bycovering the cost of replacing your building -- or the damagedportion -- regardless of limits.

Historic Certification Expenses
This will cover reasonable and necessary legal, accounting,architectural, archival and other expert consultation costs you incur tomaintain or re-obtain your historical certification after a loss.

Ordinance and Law Protection
This will cover expenses you face if there is an ordinanceor law regulating zoning, land use or construction that increases the costs torepair or replace your certified property. This applies if you suffer a loss ordamage during the time the ordinance or law is in effect.

Increased Period of Restoration
This will help you afford the time to cut through the redtape by covering your loss of income and extra expense during the added amountof time it may take to comply with the minimum standards.

Tax Benefit Protection
This will cover penalties that may arise from losing yourhistoric designation because of a covered loss or damage to your propertyduring the period you have agreed to preserve it -- up to 15 years --and for which you've received federal, state and/or local tax benefits.

Increased Realty Tax Assessments
This will cover the increased tax liability directlyattributed to the repair, rebuilding or reconstruction of your historicproperty.

Are You Prepared for the Next Power Outage - March 2015

The power failures are more common than belived and nobody is spared. Businesses with many visitors and guests, like hotels, are especially hard-hit. Despite what most believed to be adequate planning, guests and employees were still inconvenienced.

Electrically operated room access systems failed, locking guests out until master keys could be located. Toilets with electronic sensors would not flush. Guests and employees were trapped in elevators. Emergency lighting systems ceased operating after a few hours, leaving interior halls and stairwells dark. Telephone systems didn't work. Some emergency generators failed to operate, and those that did, soon ran out of fuel.

Widespread power outages may become more common as demand increases and the threat of terrorism continues. The likelihood of such incidents has led many hotel operators to realize how vulnerable they are during power outages.

During the recent incident, the weather was warm and dry. Furthermore, the power failure occurred in the afternoon, allowing management and civil authorities to respond while there was still plenty of daylight. The outcome could have been much different had the event occurred at night.

Planning is the key
Businesses that weathered the outage with few or no losses had one thing in common - good planning. Those facilities planned for emergencies, including power failures. Some hotel chains, for instance, maintained a supply of bottled water, flashlights and "glowsticks" (devices that contain chemicals that glow for several hours) and pre-printed notices for guests that explained the hotel's emergency procedures.

How good are your emergency plans? Do you even have any?

Who can help?
The best place to begin your planning process is with your local authorities.

How quickly can emergency crews rescue people trapped in elevators? Where can you send injured or ill visitors or employees? Will medical services or response time be impaired? What if you are forced to house visitors or employees and run out of water or non-perishable food?

Generators
Back-up generators are a good start, but they require a significant capital investment to install, a difficult expenditure to justify during times when occupancy rates are low. Most generators are fueled by natural gas or diesel fuel, which require regular testing and maintenance. Manufacturers usually recommend a weekly start-up check and a monthly test under a full load that simulates actual use. The size of your fuel tank is a major consideration.

Communications
Don't forget communications. If the power is down, cell phone networks will probably be overwhelmed. A battery-powered radio may be your only means for staying in touch with authorities and critical news reports. Keep at least two radios and extra batteries handy. Consider a radio that has a built-in generator.

Should you stay open?
Will you close your doors or attempt to stay open? Generally, there are no legal requirements to provide lodging in an emergency, but verify this point with legal counsel for your jurisdiction. Balance your decision with practicality and customer goodwill.

Lighting
Adequate lighting is important for the safety of your guests and staff. Many newer facilities have interior hallways with minimal or no natural light source. Most emergency lighting units are designed to operate long enough for occupants to escape - and usually no more than an hour or two. Consider equipping each room with flashlights and/or "glowsticks." Provide your staff with heavy-duty, long-lasting flashlights.

Water
Does an electric pump feed your fresh water supply? Do you have gravity fed reservoirs? If so, how long will the supply last? As a rule of thumb, base the amount of back-up water on your occupancy history, figuring at least one liter per-person per-day, more in hot, dry climates or weather.

Other considerations
Don't forget blankets, non-perishable food supplies, and first aid kits.

Preventing Falls Around Curbs and Curb Ramps - February 2015

Owners ofoffice buildings, restaurants, shopping centers, hotels and other propertieswith frequent public use often sustain sizable claims when a visitor orcustomer slips, trips or falls because of a curb. What are the common problemsassociated with curbs and curb ramps? How can you improve the situation?

ADA Applies
As a result of the Americans with Disabilities Act (ADA) of 1990,many business owners were forced to make changes to the paths by whichbuildings are accessed. Curb ramps are generally required where there is atransition between two surfaces with a change in elevation along a disabledpath of access. Curb ramps can either be built in, where the ramp becomes apart of the sidewalk, or built out, where the ramp is extended out from the sidewalkinto the adjacent street or driveway. While curb ramps typically reduce thepotential for fall-related injuries compared to an ordinary curb, they stillpresent some unique hazards.

Curb Ramp Hazards
Curb ramps can increase the potential for fall-related incidentswhen people approach the ramp from side to side, or perpendicular to the ramppath. The sides of the curb ramp often slope down into the ramp depression, andpeople tend to lose their balance if they do not see the ramp. It is a good practiceto outline the sides of the curb ramp with contrasting blue or yellow paint tohighlight the ramp and warn of the elevation change. Ideally, the colors willidentify the elevation change areas - sections of the curb ramp flush withthe parking lot will be one color, the beginning of the slope another color.

Ramps should also be positioned so that the primary sidewalk route past the rampallows room for pedestrians to walk around the ramp on a level surface. Rampscan also be positioned adjacent to support columns or planters to keeppedestrians out of the ramp zone. Where ramps are placed into a depression ofmore than 6-8 inches under sidewalk height, consideration should be given toinstalling a permanent barrier, such as a railing, to prevent people fromstepping off the walkway and into the ramp zone. Where no barrier is provided,the Americans with Disabilities Act requires that the sides of the curb ramp beflared with a slope of no more than 1:10. Providing proper warnings topedestrians passing by curb ramps is good practice for minimizing falls whenapproaching ramps from the side.

Ramp Slopes, Surfaces
As with any type of ramp, the introduction of a slope tends to increase thepotential for fall incidents compared with a level surface. While curb rampsgenerally reduce the potential for fall injuries compared with an ordinarycurb, it is important to maintain a high coefficient of friction on the rampsurface. The Americans with Disabilities Act requires that curb ramps that areused as part of an access pathway have a coefficient of friction of 0.8.Typically, ordinary brushed concrete has a coefficient of friction approaching1.0 and is an excellent material for this purpose. It is also relativelyinexpensive and easy to work with.

Painting
Special consideration needs to be given if the ramp surface is tobe painted over, as most paint will reduce the level of friction and increasethe potential for slips and falls. If the surface is to be painted, it shouldbe done with paint or paint additives designed to increase the slip resistance.Other materials such as decorative pebbles, ceramic tiles or stone should betested first, or specially treated, to ensure that the product provides acoefficient of friction of at least 0.8 on the ramp surface.

Warnings Needed?
ADA also requires that the ramp surface have "detectablewarnings" on it. ADA recommends the use of raised truncated domes thatcontrast visually with the ramp surface. Other designs and stamped patterns arealso acceptable as warnings and serve to increase the slip resistance of thesurface. The pattern brings awareness to the ramp and simultaneously provides ahigh coefficient of friction to the surface.

As withall ramps along an access pathway, the slope of the curb ramp surface must notexceed 1:12. Not only does a slope greater than this make it difficult forpeople in wheelchairs and walkers to use the ramp, but greater slopes alsoincrease the potential for fall-related incidents. Often, curb ramps areinstalled after the initial construction date of the facility. The installermay simply have installed a ramp between two points without considering ormeasuring the degree of slope. There are a great many curb ramps in existencetoday which exceed the required slope of 1:12. If they are too steep, theyshould be reworked or extended so that the slope is within the requiredguidelines. If slip incidents appear to be a problem on a specific ramp, it isusually an indication that the slope is too great.

High Traffic Area Concerns
Where high traffic areas are present, such as the entrance tosupermarkets or large stores, it is generally a good practice to remove curbsand curb ramps, and have one long stretch of properly sloping ramp along theentire storefront. Store entrances and exits are a primary area where fallsoccur in the presence of a curb ramp or curb. Where possible, the parking lotto sidewalk transition should be level with no elevation changes at allstorefront entrances.

Ordinary curbs also present special hazards to pedestrians. A primary concern with curbsis stepping off one to a different elevation. Older persons who might havevisual and physical impairments often have the most difficulty negotiatingcurbs. In many cases, a properly designed curb ramp can be a big improvementfor these people, especially at medical facilities where there is a highconcentration of patients and visitors with physical impairments. Parking lots,landscape medians and sidewalks, away from the entrance, should be evaluatedfor the presence of curbs. Additional consideration should be given to the useof concrete pathways and curb ramps.

Curbs
Curbs should generally be about 5-6 inches in height, which is comfortable formost people. Curbs less than 4 inches in height or greater than 8 inches shouldbe reworked. A curb height that is too low is often tripped over and not seen.Curb heights 8 inches or more sometimes cause falls. Excessive curb heights canbe reduced by building up the material on the low end, or installing a ramp.

Attention should be given toward the contrast of the curb with the surrounding surface,particularly at night. While a white curb against freshly surfaced blackasphalt provides good color contrast, a white curb against well faded lightgrey asphalt may not. Where the contrast between the curb and adjacent surfaceis not striking, the curb should be highlighted with a bright contrasting colorsuch as yellow to bring awareness to the change in elevation. If paint is used,it should be supplemented with slip resistant grit material to improve thecoefficient of friction of the paint surface and reduce the potential for slipsand falls.

Inspections Needed
Both curbs and curb ramps need to be inspected frequently. As these are oftenlocated in high traffic areas, they can become damaged from being struck byvehicles, or frequent contact with objects like shopping carts. Tree roots canalso uplift and damage curbs and ramps. Trees should be planted at least 6 feetfrom curbs and ramps to allow room for root growth. Paint wears off and becomesless slip resistant over time. The location of built-out curb ramps should becarefully considered, as they, too, can be struck by passing vehicles causingdamage to the ramp or a vehicle.

Facilitiesmaintenance and management should inspect curbs and ramps frequently fordefective conditions and ordinary wear. When contractors are used to install orrepair curbs and ramps, be sure they are properly licensed and insured. Obtaina certificate of insurance and check for both general liability and workers'compensation coverages, and obtain an additional insured endorsement if possible. Should the contractor who installed the ramp or curb be partiallyresponsible for an incident because of improper installation, it may bepossible to transfer some of the claim burden back to that contractor.

Beware of Reverse Risk Transfer - January 2015

Some contractors and vendors are using a novel contractual approach to reduce the amount of protection they are providing to their customers. They provide a contract that holds a client company harmless and indemnifies it in the event of a loss.

However, buried in the contract is a statement that they are liable for only a stated amount of damages, then the client company agrees to hold them harmless and indemnify them. Such provisions are sometimes called "reverse risk transfer."

Watch the Wording
The contractor or vendor can provide a certificate of insurance showing adequate coverages, policy limits and additional insured status (and even holdharmless wording), but they actually rely on contract wording to limit the amount for which they are liable in the event of a claim or loss.

When coupled with the reverse risk transfer provision, the effect is that the vendor or contractor protects the client company for the relatively low losses and the client company protects the contractor or vendor for larger losses.

These provisions are easily overlooked by managers and are often accepted unknowingly in contracts provided by contractors or vendors.

Solutions
The best solution is to have an attorney develop custom contracts for use with vendors and contractors that include hold harmless wording, indemnification statements and insurance requirements. If contractors or vendors provide you with their contract to sign, contract wording should be closely reviewed by your attorney.

If necessary, the contract should either be modified before signing or a contract addendum developed by your attorney, with your risk transfer requirements attached, that supersedes contract wording.

If contracts are not used with smaller vendors or contractors, your attorney may be able to establish a work order system incorporating risk transfer provisions that also meet the requirements of a contract.

Include Insurance Requirements
Along with reviewing the hold harmless contract provisions, ensure that anattorney includes insurance requirements in contracts - both coverages and insurance limits. Ideally, the contract should also require the contractor or vendor to name your company as an additional insured on its general liabilityinsurance policies and obligate it to provide certificates of insurance confirming that this policy change is in place.

Then make sure the certificates are received and reviewed against a checklist of requirements. Any that are not in compliance should be kicked back for re-issuance or the contractor or vendor should not be allowed to begin work.

How to prevent water damage claims - December 2014

Water damage is thesecond most severe source of property damage after fire and smoke.

Over 75% of water damagelosses come from:

  • Plumbing (not freezing)
  • Roof or flashing leaks
  • Fire sprinkler leakage

Start at the top withyour roof. Hire a licensed insured roofing professional and put your roofon a maintenance program. Not only will this help reduce losses, but willextend the life of your roof. Consider having a infrared thermographconducted on your roof, which is essentially a heat scan to locate the realsource of water intrusion.

Make sure your roofmaintenance includes thorough inspections of flashing. Flashing is oftendamaged by contractors, wind or trees and can cause difficult to detect waterintrusions

Not to be overlooked,make sure all roof drains are clear of debris. It is imperative that allroof drains be maintained to facility drainage. Don't forget to check theroof drainpipes to make sure there is no blockage or dents to obstruct flow.

Unfortunately, Plumbingwill leak, toilets will overflow and sprinkler heads will be bumped, PERIOD.

The only way to preventthis type of damage is to have a pro-active inspection system in place.

Include plumbing in yourroutine safety inspection and replace any plumbing that exhibits sings of decay(corrosion, physical damage, weeping, etc.). If possible install draincollection pans or floor drains to carry away and contain any areas where leaksare likely.

Talk to your plumberabout installing water leak sensing devices such as those found at www.watercop.com. Also talk to your alarm company about adding a water leak detection system toyour alarm monitoring system.

Finally, if yourdomestic water supply or sprinkler system did have a leak, who would know howto shut if off and where? There has been more than one instance ofhundreds of gallons of water flowing each minute while someone tried to findthe shut off valve, or the person with the key to reach the shut offvalve. Make sure there are multiple people located on or near site that havethis knowledge.

If you do have a waterleak problem keep LOTS of plastic sheeting handy and train your maintenanceteam and provide them with leak prevention products such as the "StopIt" repair system www.stopit.com.

For a minimal time andmonetary investment a pro-active water damage prevention system can go a longway's in reducing losses and extending the useable life of your buildingsassets.

Understanding Co-insurance - November 2014

Taking the time to understand your insurance policies iswell worth the effort. An insurance policy is a complex contract that oftencontains provisions that assigns certain responsibilities to the policyholder,such as a coinsurance clause. Often misunderstood, CMR Risk & InsuranceServices, Inc. has gathered the basics on coinsurance to help eliminate anypotential confusion.

Calculating Coinsurance

In the simplest terms, the coinsurance provision in aproperty policy requires the policyholder to carry a limit of insurance equalto a specified percentage of the value of the property to receive full paymentat the time of a loss. For example, a building with a value of $1,000,000 and apolicy with an 80 percent coinsurance clause must be insured for at least $800,000 to avoid a coinsurance penalty at time of loss.

Here's where it gets a bit more complicated: If there is a claim, the formula to determine the recovery is based on the property's replacement value at the time of loss. If the replacement amount is less than the coinsurance percentage, a penalty is applied, reducing the claim payment.  For example, a policyholder has $600,000 of property insurance and a fire causes $200,000 in damages. The claim is calculated by dividing the amount ofinsurance purchased ($600,000) by the value at time of loss ($800,000). This factor (75 percent) is multiplied by the amount of the loss ($200,000 x .75 =$150,000).

In this example, the policy-holder would receive $150,000 (less any deductible) for a $200,000 claim.

What Policies Include a Coinsurance Clause?

Property insurance policies typically include a coinsurance clause. Building, business personal property and inland marine policies all contain the coinsurance clause mentioned above. Some policies require 100% of the value to be insured.

What can you do to mitigate a coinsurance clause? The coinsurance clause included in the policy language can be "suspended"for the term of the policy by adding an agreed amount endorsement. This is aprovision where the insurer and the insured agree that the amount of insuranceis adequate and the coinsurance clause will not apply to a loss.

CMR Risk & Insurance Services, Inc. understandscoinsurance provisions and can help you review your policies to ensure yourcoverage meets your expectations. Contact us today at (619) 297-3160 to learn more.

Protect Tenant Information from Identity Theft - October 2014

As a property manager, you handle a large volume of personalinformation. Not only do you have to keep existing tenants' information onhand, but you also have information collected from prospective tenants duringthe rental process. Sensitive personal information, like social security anddriver's license numbers, are essential for, among other things, a thoroughbackground check on possible renters. However, because of the abundance ofpersonal information they are responsible for, more and more property managersare becoming targets of identity theft.

If personal information that you are responsible for isobtained and used, you could be liable for the damages. Unfortunately, whenproperty managers are targeted, identity thieves usually take more than justone individual's information, resulting in costly litigation for multiplelosses. To protect yourself, it is important to take the appropriate measuresto safeguard any personal information given to you by prospective, current andpast tenants.

Assuring Tenants

Individualsare becoming increasingly more concerned about how their personal informationis handled. The information a potential tenant discloses to you during theleasing process is essentially everything a criminal would need tosuccessfully steal his or her identity. For you, their personal information is necessary to ensure that you aregetting a good tenant, but they may still have fears that you need to address.Talking with prospective tenants about the safeguards you have in place canhelp them feel more comfortable releasing their personal information during theleasing process.

Safeguards

Identity thieves use a number of approaches to try andobtain personal information. To prevent unauthorized access, you must institutesafety measures that strictly manage how personal information is handled. Hereare some considerations for securing tenant information:

  • Computer Protection – Keep electronic attackers fromsuccessfully accessing your network by password protecting files and keepingyour virus protection and firewall up to date. Also, avoid storing tenants'personal information on laptops that are frequently used outside the home oroffice and could be easily stolen. If you need to access this information onthe go, consider remote network access that will allow you to get theinformation you need from a central secure location.
  • Releasing Information – Personal information should bereleased only to those persons or organizations specifically authorized by theindividual. Never release personal information over the phone, through the mailor electronically unless the receiver's identity has been confirmed aslegitimate.
  • Proper Disposal – Trash is a common target of identitythieves. To stop information from being picked out of the garbage, use ashredder when discarding any paperwork that contains personal information.
  • Tenant Communications – When communicating with tenants bymail or electronically, always try to include as little sensitive informationas possible. If it cannot be avoided, always do your best to ensure that itreaches the tenant in a secure fashion. Put outgoing mail directly into securecollection boxes, and only use electronic forms of communication if there aresecurity measures in place to prevent public access.
  • Social Security Numbers – Keep the amount of documents thatinclude social security numbers to a minimum. Unless listing the number isabsolutely essential, do not include it.
  • Employees – It is important to make wise hiring decisions toprevent employee theft or leaks. Only those employees who require it to carryout their daily duties should have access to tenants' personal information.Employees should not have access to all records, but instead, only to thosethat apply to their work. If an employee is terminated for any reason, makesure that access to any tenant information is immediately restricted.

Instituting a plan that regulates how your organizationdeals with tenant information will help keep your tenants safe while protectingyour company from liability.

Additional Protection

While your responsibility to the tenant does not include howthey themselves protect their sensitive information, there are some things thatcan be done to make a location less ripe for identity thieves. As mail canoften be a target of identity thieves, consider individual mailboxes thatrequire a key to access. To cure the common concern over information beingobtained by rummaged-through trash, consider keeping dumpsters in fenced or otherwiseenclosed areas. Not only can this prevent opportunities for identity theft, butit can also prevent non-tenants from filling up your waste containers.Providing this additional protection to tenants can show your commitment tosafeguarding their personal information.

Preventing Falls Around Curbs and Curb Ramp - September 2014

Owners of office buildings, restaurants,shopping centers, hotels and other properties with frequent public use oftensustain sizable claims when a visitor or customer slips, trips or falls becauseof a curb. What are the common problems associated with curbs and curb ramps?How can you improve the situation?

ADA Applies

As a result of the Americanswith Disabilities Act (ADA) of 1990, many business owners were forced to makechanges to the paths by which buildings are accessed. Curb ramps are generallyrequired where there is a transition between two surfaces with a change inelevation along a disabled path of access. Curb ramps can either be built in,where the ramp becomes a part of the sidewalk, or built out, where the ramp isextended out from the sidewalk into the adjacent street or driveway. While curbramps typically reduce the potential for fall-related injuries compared to anordinary curb, they still present some unique hazards.

Curb Ramp Hazards

Curb ramps can increase thepotential for fall-related incidents when people approach the ramp from side toside, or perpendicular to the ramp path. The sides of the curb ramp often slopedown into the ramp depression, and people tend to lose their balance if they donot see the ramp. It is a good practice to outline the sides of the curb rampwith contrasting blue or yellow paint to highlight the ramp and warn of theelevation change. Ideally, the colors will identify the elevation changeareas - sections of the curb ramp flush with the parking lot will be onecolor, the beginning of the slope another color.

Ramps should also be positionedso that the primary sidewalk route past the ramp allows room for pedestrians towalk around the ramp on a level surface. Ramps can also be positioned adjacentto support columns or planters to keep pedestrians out of the ramp zone. Whereramps are placed into a depression of more than 6-8 inches under sidewalkheight, consideration should be given to installing a permanent barrier, suchas a railing, to prevent people from stepping off the walkway and into the rampzone. Where no barrier is provided, the Americans with Disabilities Actrequires that the sides of the curb ramp be flared with a slope of no more than1:10. Providing proper warnings to pedestrians passing by curb ramps is goodpractice for minimizing falls when approaching ramps from the side.

Ramp Slopes, Surfaces

As with any type of ramp, theintroduction of a slope tends to increase the potential for fall incidentscompared with a level surface. While curb ramps generally reduce the potentialfor fall injuries compared with an ordinary curb, it is important to maintain ahigh coefficient of friction on the ramp surface. The Americans withDisabilities Act requires that curb ramps that are used as part of an accesspathway have a coefficient of friction of 0.8. Typically, ordinary brushedconcrete has a coefficient of friction approaching 1.0 and is an excellentmaterial for this purpose. It is also relatively inexpensive and easy to workwith.

Painting

Special consideration needs tobe given if the ramp surface is to be painted over, as most paint will reducethe level of friction and increase the potential for slips and falls. If thesurface is to be painted, it should be done with paint or paint additivesdesigned to increase the slip resistance. Other materials such as decorativepebbles, ceramic tiles or stone should be tested first, or specially treated,to ensure that the product provides a coefficient of friction of at least 0.8on the ramp surface.

Warnings Needed?

ADA also requires that the rampsurface have "detectable warnings" on it. ADA recommends the use ofraised truncated domes that contrast visually with the ramp surface. Otherdesigns and stamped patterns are also acceptable as warnings and serve toincrease the slip resistance of the surface. The pattern brings awareness tothe ramp and simultaneously provides a high coefficient of friction to thesurface.

As with all ramps along anaccess pathway, the slope of the curb ramp surface must not exceed 1:12. Notonly does a slope greater than this make it difficult for people in wheelchairsand walkers to use the ramp, but greater slopes also increase the potential forfall-related incidents. Often, curb ramps are installed after the initialconstruction date of the facility. The installer may simply have installed aramp between two points without considering or measuring the degree of slope.There are a great many curb ramps in existence today which exceed the requiredslope of 1:12. If they are too steep, they should be reworked or extended sothat the slope is within the required guidelines. If slip incidents appear tobe a problem on a specific ramp, it is usually an indication that the slope istoo great.

High Traffic AreaConcerns

Where high traffic areas arepresent, such as the entrance to supermarkets or large stores, it is generallya good practice to remove curbs and curb ramps, and have one long stretch ofproperly sloping ramp along the entire storefront. Store entrances and exitsare a primary area where falls occur in the presence of a curb ramp or curb.Where possible, the parking lot to sidewalk transition should be level with noelevation changes at all storefront entrances.

Ordinary curbs also presentspecial hazards to pedestrians. A primary concern with curbs is stepping offone to a different elevation. Older persons who might have visual and physicalimpairments often have the most difficulty negotiating curbs. In many cases, aproperly designed curb ramp can be a big improvement for these people,especially at medical facilities where there is a high concentration ofpatients and visitors with physical impairments. Parking lots, landscapemedians and sidewalks, away from the entrance, should be evaluated for the presenceof curbs. Additional consideration should be given to the use of concretepathways and curb ramps.

Curbs

Curbs should generally be about5-6 inches in height, which is comfortable for most people. Curbs less than 4inches in height or greater than 8 inches should be reworked. A curb heightthat is too low is often tripped over and not seen. Curb heights 8 inches ormore sometimes cause falls. Excessive curb heights can be reduced by buildingup the material on the low end, or installing a ramp.

Attention should be giventoward the contrast of the curb with the surrounding surface, particularly atnight. While a white curb against freshly surfaced black asphalt provides goodcolor contrast, a white curb against well faded light grey asphalt may not. Wherethe contrast between the curb and adjacent surface is not striking, the curbshould be highlighted with a bright contrasting color such as yellow to bringawareness to the change in elevation. If paint is used, it should besupplemented with slip resistant grit material to improve the coefficient offriction of the paint surface and reduce the potential for slips and falls.

Inspections Needed

Both curbs and curb ramps needto be inspected frequently. As these are often located in high traffic areas,they can become damaged from being struck by vehicles, or frequent contact withobjects like shopping carts. Tree roots can also uplift and damage curbs andramps. Trees should be planted at least 6 feet from curbs and ramps to allowroom for root growth. Paint wears off and becomes less slip resistant overtime. The location of built-out curb ramps should be carefully considered, asthey, too, can be struck by passing vehicles causing damage to the ramp or avehicle.

Facilities maintenance andmanagement should inspect curbs and ramps frequently for defective conditionsand ordinary wear. When contractors are used to install or repair curbs andramps, be sure they are properly licensed and insured. Obtain a certificate ofinsurance and check for both general liability and workers' compensationcoverages, and obtain an additional insured endorsement if possible. Should thecontractor who installed the ramp or curb be partially responsible for anincident because of improper installation, it may be possible to transfer someof the claim burden back to that contractor.

Keeping Tenants Safe - Fire Safety - August 2014

Property owners and operators manage their properties to minimize the potential for fire incidents - but they can still occur. 

A pot left unattended on the stove, a candle burning near curtains or improper use of extension cords may all result in a fire impacting the lives and property of residents and the reputation of your community. 

Have you communicated fire safety to your residents?

If not you should include bill stuff, common area posting or newsletter mailer to all tenants communicating fire safety. 

The following is a sample communication you can use:

 

FIRE SAFETY GUIDELINES FOR RESIDENTIAL COMMUNITIES

There are three main considerations for fire safety in residential communities: Getting Out, Prevention and Protection.

GETTING OUT

Feel the Door Handle

  • Gather your family.
  • Feel the door and the door handle. If it is hot - DO NOT open it!
  • Go to a window and call for help.
  • If the door and handle are not hot, open the door cautiously and check for smoke or fire.

Stay Low

  • If the way out is safe, take your family and exit the building. Do not take time to gather possessions.
  • If the door handle is not hot, close your door when you leave. This can slow the spread of fire and reduce smoke damage to your possessions.
  • Stay as low as possible. Smoke makes it hard to see, is highly toxic and may contain deadly chemicals. If you enter another area that is too smoky to allow your exit, return to your apartment - if it is safe to do so.

Get Out of the Building

  • Don't take time to telephone before leaving or to gather belongings.
  • Pull the fire alarm on the way out.
  • Knock on doors you pass as you leave, yell "FIRE," but don't stop to look for people.
  • Get outside and find a phone. Call for help.
  • Tell the fire service that your apartment is now empty - if you can safely do so. This will enable firefighters to search other apartments that may be occupied and save valuable rescue time.

If You Cannot Get Out

  • Remain calm.
  • If help is not near, place a wet towel against the base of the door to slow smoke spread. Continue to call for help at a window.
  • Use the telephone to tell the 911 operator where you are. They can alert the fire service and speed a rescue.
  • Hang a sheet from the window to attract attention.
  • Stay low, below smoke.


PREVENTION

The Safest Fire Is the One that is Prevented

  • Extinguish matches and smoking materials thoroughly, using water and a non-combustible ashtray.
  • Don't smoke while sleepy or impaired.
  • Do not overload electrical circuits or outlets.
  • Extinguish candles and incense when unattended.
  • Keep space heaters and high intensity lamps away from combustible objects.
  • Clean up immediately after parties and take all trash to a dumpster or appropriate trash area.
  • Monitor items being cooked.
  • Clean the lint filter in the dryer.
  • Never barbecue near the building. Keep flame producing objects at least 25 feet or more from any building or combustible plantings.


PROTECTION

Check Smoke Alarms

  • Check smoke alarms monthly.
  • Work with your Community Manager to install new batteries when you change your clocks or alarms.
  • NEVER remove smoke detector batteries.

Plan Escape Routes

  • Know where all building exits are located.
  • Practice your escape routes. Include your children or older adults who may need additional assistance.
  • Notify your Community Manager if you or someone in your apartment requires special assistance to exit in an emergency.

Take All Fire Alarms Seriously

  • Do not ignore fire alarms.
  • Do not wait to see fire or see or smell smoke.
  • Do not worry about removing your possessions.

  

Managing Trip & Fall Incidents - July 2014

Watch out for slips, trips and falls! A variety of possible hazards such as slippery floors and sidewalks, damaged flooring, curled rugs and spilled materials or debris can contribute to these accidents.

 

Unless you manage them properly, these exposures can potentially cost you money and force you into drawn-out legal procedures. Here is an overview what you need to know to manage the aftermath of a slip and fall incident.

 

General liability insurance contracts require that insureds promptly report claims to allow adjusters to thoroughly investigate the allegations and claimant injuries. Insurers attempt to resolve these claims in a manner that is equitable to all parties to the case. This means:

  • Identifying and evaluating the hazard presented by the alleged unsafe condition,
  • Establishing estimates of comparative or contributory negligence (legal theories of negligence vary by jurisdiction),
  • Estimating damages (medical costs, wage loss, other expenses and factors that add value to the claim), and
  •  Reaching an agreement with the claimant on all of the above factors.

It is worth noting that most general liability insurance contracts are "guaranteed cost," that is, the insurer charges a fixed amount for the coverage provided, based on sales, area of the facility, and so on. Therefore, it is to the advantage of both the insurer and the insured for the claims to be settled as fairly, quickly and inexpensively as possible.

 

Hazard Evaluation

Hazard evaluation may evaluate many factors, such as:

  • Was there a trip hazard based on relevant codes and a reasonable evaluation?
  • Was it open and obvious?
  • Were handrails provided?
  • Were there warnings in place?

An owner's records of inspections, maintenance, and repairs are important in validating that the owner took reasonable and necessary measures to control exposures for the safety of all pedestrians.

 

Comparative and Contributory Negligence

Comparative and contributory negligence are terms that relate to individual state negligence standards. Each person bears a certain responsibility for their own safety and well-being.

 

In a state applying the doctrine of comparative negligence, liability and damages are determined by evaluating the proportionate fault of the parties. However, where both parties are found to be negligent, the finding of negligence is not an absolute bar to recovery.

 

In a state applying the doctrine of contributory negligence, a party may be barred from recovering damages if his or her negligence contributed to the injury.

 

Damages

Insurers rely upon medical reports, evidence of wage loss, bills for legal fees, invoices reflecting extra expenses incurred, and, in some cases, an estimated dollar figure for pain and suffering. Liens from workers' compensation, Medicaid/Medicare, and other healthcare providers often must be addressed in evaluating damages.

 

Prior claims by an individual (e.g. an auto or workers' compensation accident) can be checked and evaluated by the adjuster through the Central Index Bureau, a database maintained by insurance companies to document prior claims activity.

 

It is important to note when assessing damages that an aggravation of a pre-existing condition can significantly impact the value of a claim. A somewhat common example is if a patron falls and suffers an injury that heals more slowly, or not fully, because of an underlying medical condition. This claim may be valued higher than another person suffering the same injury but without the underlying medical condition.

 

Settlements

A negotiated settlement can be discussed at various stages of the claim. When there is some level of negligence on the part of the property owner or tenant and a settlement value cannot be reached through traditional settlement discussions, all parties may wish to use Mediation or voluntary Alternative Dispute Resolution procedures.

Water Damage from Pipe Back Up, am I Covered? - June 2014

As with most insurance coverage questions the answer is: it depends!

  

A standard Insurance Services Office (ISO) Special Form commercial property policy 2002 edition (form CP 10 30 04 02) broadens what is commonly referred to as the Flood exclusion to a Water Exclusion.  This exclusion specifically excludes "Water that backs up or overflows from a sewer, drain or sump".

 

The problem with this exclusion is that insurance companies apply the exclusion to Water Damage resulting from the back of ANY pipe or drain contained in a building and there has been many court cases siding in the favor of the insurance companies.

 

Insurance Companies have interpreted and courts have upheld that a sewer system includes ANY pipe that carries sewage, waste or water.  Therefore if your building has a pipe that becomes clogged and water escapes through a toilet, drain, etc. any resulting damage will be excluded.

 

Again, this applies to ANY pipe.  Therefore if a single pipe clogs on the 5th story of a multi-story building and water escapes from the lowest exit point (a toilet or drain) any resulting water damage will be excluded.  As you can imagine water running down from the 5th to the ground floor can be extremely costly. 

 

The damage could go undetected for an extended period of time as tenants in higher floors will continue to use the water system unaware that the system is clogged and escaping through a lower floor outlet, rather than through the building sewer system.

 

Now for the depends (no pun intended!).  The majority of insurance companies will allow you to purchase a specific sub-limit for Water Damage due to Back Up of Sewers or Drains, while others are willing to remove the exclusion in its entirety. 

 

Unless you have a specific endorsement to buy-back coverage or remove the exclusion you will have no coverage.

Lesson Learned - Cigarette in Trash Causes Fire - May 2014

Loss Amount: $450,000

What Happened:

An employee at a nationwide video chain's retail outlet dumped an ashtray into a garbage bag - unaware that a cigarette butt was still smoldering. A fire started after she locked up. It caused extensive smoke and water damage to both the tenant's contents and the landlord's shopping mall structure.

The claim was settled with the shopping center owner having to pay for the majority of the structural damage. Despite the tenant's negligence, the shopping center paid for the claim because the lease agreement allowed the tenant to pass its liability on to the shopping center.

Lessons Learned:

Smoking controls are invaluable regardless of the occupancy. There are several controls you can implement to help prevent a fire, including:

- Installation of supervised photo-electric or ionization smoke detectors in all tenant spaces, including break rooms, so that smoldering fires can be detected early.
- If you cannot legally designate your entire building smoke free, attempt to incorporate written and enforceable smoking controls that include, but are not limited to:

  • Designated smoking areas equipped with fire extinguishers.
  • Requirement that metal buckets with a layer of water be used for disposal of all ashtrays before placing in garbage bag or waste basket.
  • Restrict the storage of any combustibles in break rooms used for smoking.
  • Require that all garbage be removed from the premises upon closing.

Strictly enforce these controls with tenants by conducting walk-through's of tenant spaces and have them provide evidence that their employees have been trained in proper disposal methods.

Additionally, make sure that your legal counsel reviews all lease agreements to ensure you are being held harmless and indemnified for all costs for any injuries or damages that result from the tenant's negligence. 

Information provided courtesy of Fireman's Fund Insurance Company

Earthquake Insurance or Difference in Condition (DIC), which is better? - April 2014

It is fairly common knowledge that losses from Earthquake are excluded from a standard commercial lines property insurance policy and that if insurance coverage is desired a separate type of insurance policy or special endorsement is needed.

What is often misunderstood is a standard Special Form Causes of Loss property form modeled after an ISO CP1030 form excludes Earth Movement.

Earth Movement is more broadly defined to exclude losses from:

  • Earthquake, including tremors and aftershocks and any earth sinking, rising or shifting related to such event;
  • Landslide, including any earth sinking, rising or shifting related to such event;
  • Mine subsidence, meaning subsidence of a man-made mine, whether or not mining activity has ceased;
  • Earth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface
  • Volcanic eruption, explosion or effusion, except Volcanic Action which means direct damage by  Airborne volcanic blast or airborne shock waves, Ash, dust or particulate matter or Lava flow

When looking to secure insurance coverage for Earthquake you should actually be trying to add back as much coverage as possible for "Earth Movement" especially if your project is located in the West; Pacific Northwest or Hawaii especially which all have active volcano areas.

ISO offers a few different coverage endorsements that in essence remove the exclusions for Earthquake and/or Volcanic Eruption, however the insurance market reality is that insurance companies whom provide "Earthquake" coverage in areas where there is a real exposure do so via a separate insurance policy.

These insurance companies use their own manuscript coverage forms that are often referred to as Difference in Conditions policies commonly referred to as DIC.  A DIC policy is named such as it is intended to cover "differences in conditions" aka "exclusions" or limitations found in a standard commercial property form with special form causes of loss, but again the reality is that these forms are paired down to only provide specific coverage.

One of the common specific coverage's a DIC policy is intended to cover is Earthquake or Earth Movement.  As every insurance company uses their own manuscript form some companies include Volcanic Eruption in their definition of Earthquake, others specifically exclude Volcanic Eruption as Earthquake, but also a separate coverage buy back for Volcanic Eruption.

In answering the question if an Earthquake or DIC policy is better, the answer is a DIC policy that has the broadest wording for adding back as much of the Earth Movement exclusion is the best option.  However in order to determine this you must review the coverage forms of the options you are considering to obtain the broadest level of coverage.

 

Cooperation with Insurer Reduces Loss Cost in Roof Collapse - March 2014

What Happened:  Work was underway to remove an 83,000 sq, ft, section of the old built-­up roof of a large manufacturing plant and replace it with a mechanically attached, single-­ply membrane (EPDM).  The insured was familiar and comfortable with the work of this particular roofing contractor.  About half of the job was complete when the loss occurred.

The roofing Contractor hired a crane operator to lift additional roofing materials onto the roof.  Materials included rolls of EPDM, poly-iso insulation, gypsum board under-layment, fasteners, etc.  The crane operator moved all the remaining roofing materials onto the roof at one time to apparently save costs.  The roofing contractor supplied one worker to help on the ground and one to help on the roof.  As a result, there were not enough workers to redistribute the materials on the roof as they were set on the roof.  As a result, they loaded approximately 110,000 Ibs of material on a 30 ft, x 90 ft. area of the roof.

About four hours later a 30 ft. x 135 ft. section of the roof collapsed.  The roof was 1'/2 inch thick, pine, tongue and groove decking on steel bar joists with a built-up roof.

There was no wind, rain or other adverse weather conditions at the time, The roof collapse broke a 6-inch automatic sprinkler main, destroyed the 12.4 kV feed into the plant and brought down a variety of utilities including dust handling equipment, steam lines, humidification lines, etc.  It was estimated that the broken 6 inch sprinkler line pumped about 120,000 gallons of water into the building prior to being shut down.

Lessons Learned: Selecting an insured, certified, and reputable roofing contractor is crucial.  You should protect your property by securing a written contract describing the job before the project begins.  Require a Certificate of Insurance to verify your status as an additional insured on the contractor's liability insurance policy.  Additionally, you should verify that the contractor's liability coverage is equal to or greater than your own policy limits.

This loss could have been avoided with the implementation of these basic procedures:

  1. The roofing contractor should be limited to putting no more than one day's supply of materials on the roof, This should be written into the contract.
  2. The roofing contractor should provide an adequate number of workers to distribute the materials on the roof immediately upon being hoisted up on the roof.
  3. Daily progress of the roofing contractor should be reviewed to ensure that they are meeting these requirements, If you are not comfortable with the work, stop the process until proper arrangements are made.
  4. Appropriate limits should be provided on the Certificates of Insurance commensurate with the work being done.

The day after the collapse a meeting was held with all involved contractors (debris removal, structural, mechanical, electrical, sprinkler and roofing contractors) to coordinate efforts and outline a plan for getting the plant back in production. The main utility service lines passed through the area of the collapse and required replacement. Rather than incur costs to move the utilities temporarily and then again to permanent positions, the insurer proposed re­-routing the lines as a permanent measure.

After careful thought and review with their engineers, the insured agreed to this alternative. This alternative repair method realized a "savings" of $50,000 to $100,000 in loss costs.

There were numerous pallets of wood parts in the production work area and the extent of damage appeared significant. The insurer discussed the possibility of moving these goods to the insured's dry kiln immediately to dry them out and then assess the damage. The insured agreed and promptly moved the items to the dry kiln. The effort was successful as the majority of the parts were salvaged and returned to stock.

Once the collapsed area was secured and safe for entry, employees were put to work removing water from the plant.

These actions in coordination with the insurer immediately after the loss were instrumental in reducing the severity of the loss and minimizing production down time. 

Information provided courtesy of Fireman's Fund Insurance    

How to Insure against Loss of Rental Income - February 2014

Business Income Insurance is essential insurance protection that many owners refer to as loss of rental income.

Most property owners will insure to their annual gross rental income, however your Business Income limit should be sufficient to replace your profit (or loss) plus continuing operating expenses for the entire period of restoration and some additional time for lease up.

Business Income coverage is normally written for a specified limit or in some cases on an actual loss sustained basis.  It is important to note that most policies written on an actual loss sustained basis limit coverage to a period of 12 months, which may not be sufficient for larger properties in the event of a catastrophic loss.

When selecting a limit you must thoroughly review your income & expense statement to verify the properties income or loss and what expenses will continue in the event of a claim. 

Consideration should also be given to an extended period of indemnity.  Business Income is designed to provide coverage for the loss of income from the time of the loss until construction should be reasonably completed.  The majority of properties may still realize a loss of income after construction is completed for time to get the property leased back up, or construction may be delayed due to new building ordinance or laws.  Many insurance companies will these extended periods of indemnity insurance coverage for a nominal additional premium.

As mentioned earlier it is very important to select a limit that will cover the maximum period of restoration.  For larger properties an annual figure will most likely be insufficient, especially when taking into consideration any extended period of indemnity for lease up.

In the event of a claim, insurance company adjusters require detailed information in order to substantiate loss of income.  This can include historical monthly income by unit or suite, monthly income and expense reports and prior year tax returns.

If you have vacant space that a displaced tenant could relocate to, most insurance companies will not consider this loss of income.  It is important to review historical monthly occupancy lists and make a strong argument for like kind & quality, type of tenant for each unit, desirability of each unit and tenant dissatisfaction/retention issues before accepting vacancy deductions from your loss of income claim. 

It is recommended you have an experienced CPA review any loss of income worksheets prepared by your insurance company to assure all continued or extra expenses are being included in your loss settlement.

Selecting a proper business income limit is more than just selecting your annual rental income.

 

Flood Insurance - Understanding the Basics - January 2014

Almost all property insurance policies exclude Flood damage through a Water Damage exclusion.  This exclusion is fairly broad and excludes: 

1) Flood, surface water, waves, tides,tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not; 
2) Mudslide or mud-flow; 
3) Water that backs up or overflows from a sewer, drain or sump; 
4) Water under the ground surface pressing on, flowing or seeping through: Foundations, walls, floors, pave surfaces, etc..

In order to secure insurance coverage for many of these items separate Flood Insurance must be purchased.  However, a Flood Insurance policy does not buy back all of the items excluded and is most often defined as:  A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is the policyholder's property) from one of the following: Overflow of inland or tidal waters; Unusual and rapid accumulation or runoff of surface waters from any source; Mudflow; Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.

If your property is located in a special high hazard flood zone (zones A or V) private insurers will normally not offer flood insurance, or have very high deductibles.

Flood Insurance is available for almost any structure through The National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA) that works closely with nearly 90 private insurance companies to offer flood insurance.  The NFIP program rates are set and do not differ from company to company or agent to agent.  These rates depend on many factors, which include the date and type of construction of your property along with your buildings level of risk.

The NFIP offers both standard flood insurance policies for properties located in high hazard flood zones as well as preferred risk policies for properties located in non high hazard flood zones.  

What is covered by a flood policy through the NFIP:

  • The insured building and its foundation
  • Electrical and plumbing systems
  • Central air conditioning equipment, furnaces and water heaters
  • Refrigerators, cooking stoves and built-in appliances such as dishwashers
  • Permanently installed carpeting over unfinished flooring
  • Permanently installed paneling, wallboard, bookcases and cabinets
  • Window blinds
  • Detached garages (up to 10 percent of building property coverage); detached buildings (other than garages) require a separate building property policy
  • Debris removal

What is not covered by a flood policy through the NFIP:

  • Damage caused by moisture, mildew or mold that could have been avoided by the property owner
  • Currency, precious metals and valuable papers such as stock certificates
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools
  • Living expenses such as temporary housing
  • Financial losses caused by business interruption or loss of use of insured property
  • Most self-propelled vehicles such as cars, including their parts (see Section IV.5 in your policy)

Floods are the #1 natural disaster in the United States and one of the most overlooked aspects of an insurance policy.  Many projects are built with in feet of high hazard flood zones by developers to avoid the mandate of flood insurance, therefore it is important to analyze the exact surrounding characteristics of each property and not just dismiss flood insurance due to a determination that states the structure is not in a high hazard flood zone.

 

How do I obtain the most competitive insurance premiums? - December 2013

Regardless of current insurance market conditions the best way to obtain the most competitive insurance premiums possible is to set your properties apart from all other properties that an insurance company underwriter reviews.

Most underwriters have the ability to deviate pricing fairly substantially based on individual risk characteristics of seemingly the same exposure.

The more information an underwriter reviews outside of the basic address, year built, type of construction, square feet, will help you obtain the most competitive pricing.

Additional information that is extremely helpfull includes:

  • Pictures of Properties
  • Updated Rent Rolls
  • Section of standard vendor contracts that show hold harmless/indemnification in your favor
  • Lease section that addresses tenants need to carry insurance and name you as an additional insured
  • Written manual/procedures for assuring tenants and vendors are carrying insurance and current certificates are kept on file
  • Copy of maintenance program, with sample inspection checklists.
  • Site plan if property has more than one building
  • DETAILS on updates for any property built more than 25 years ago
  • Copy of standard claim capturing form

These are some of the items insurance company underwriters look at when deciding what type of rate deviations to apply.

The better your property looks to an insurance company underwriter compared to all other properties they see, the better chance you will have of obtaining the most competitive pricing that insurance company has to offer.

Set yourself apart from other properties and you will receive the best insurance program available.

 

How to Prepare for a Safe Holiday Season - November 2013

Each year, according to the U.S. Consumer Product Safety Commission, about 1,300 people are treated in hospital emergency rooms for injuries related to holiday lights and decorations for the holiday season.

Christmas trees cause about 500 fires each year, resulting in an average of $20 million in property loss and damage.

Here are some safety guidelines to help make your holiday season safe and festive:

 Electrical Safety

  • Use only Underwriter Lab (UL) listed decorative lighting.
  • Use appropriate lights for the setting. Indoor lights should NOT be used outdoors because they lack weatherproof connections, and some outdoor lights burn too hot for use indoors.
  • Outdoor lighting should be plugged into a three-pronged (GFCI) ground fault-protected circuit.
  • Avoid laying electrical cords across walking areas. String cords overhead whenever possible, or use a cord cover if placed on the floor.
  • Inspect all lights before use. Check for cracked bulbs and frayed, broken, or exposed wires. Immediately replace or repair if needed.
  • When wrapping lights around the tree, keep them clear of any water at the base.
  • Turn off all tree and display lights before closing and leaving the premises.

 Extension Cords

  • Use only the number of connections for which the outlet was designed.
  • Inspect all cords before using. Look for loose connections, frayed, or exposed wires. Discard any defective cords.
  • Use only extension cords that are Underwriter Lab (UL) listed. Make sure you use the proper size cord. Consult your supplier and read the labels.
  • Strategically place extension cords so they don't become a trip hazard.
  • Don't run extension cords under carpets or rugs. If cords are on the floor, use cord covers.

 Remember, it gets dark earlier and visibility is poor.

  • Check for any outdoor trip hazards and assure you have adequate lighting.
  • The last person to leave the premises should turn off or disconnect all seasonal lighting and portable heaters.

 The winter season is here, so with that in mind, consider these points.

  • Place floor mats and runners at entranceways to reduce the possibility of slipping and falling during rain and snow seasons.
  • Be sure that equipment and supplies are readily available to clean up wet floors.
  • Place warning signs in the area of wet floors until clean up is possible.

  

Candle Safety Can Save Lives & Property - October 2013

Sales of candles continue to grow, but candle fires cause millions of dollars in direct property loss each year. 

The cost of fires started by candles can take a heavy toll on your business as a multi-family real estate owner or management company.

One large multi-family real estate owner recently started prohibiting candles in units to minimize these potential losses. If this is not possible, instruct your maintenance staff to be alert for unattended or improperly placed candles in units when they are completing filter changes and other interior work.

If your lease agreement allows candles, don't assume occupants know how to safely use them. Here are some safety tips that you can pass on to occupants to help prevent candle fires:

  • Candles should not be used in bedrooms or sleeping areas.
  • Snuff out all candles when leaving your unit or when going to sleep.
  • Extra precautions should be taken to keep candles out of reach of small children, impaired people and pets.
  • Keep candles a minimum of four feet away from anything that can burn -- such as curtains, decorations, lamp shades, clothing, toys, etc.
  • Prevent tip-over of candles by using proper holders or placing the candle inside a non-combustible container.
  • Never allow candles to burn all the way down -- this can prevent overheating of the container.
  • Trim candle wicks to 1/4 inch for cleaner burning and lower flame.

Information provided courtesy of Fireman's Fund Insurance Company

 

September National Preparedness Month - September 2013

National Preparedness Month was launched in 2004 by FEMA's Ready Campaign.  The Ready Campaign works through out the year to educate and empower Americans to prepare for and respond to all types of ermergencies, including natural disasters and potential terrorist attacks.

This is a great time to review your companies own disaster preparedness program and provide disaster prepardness material to your tenants as a sign of goodwill and to assist them with the ability in remaining a tenant after a disaster.  An excellent resource for information is Ready.gov ; Launched in February 2003, Ready is a national public service advertising (PSA) campaign designed to educate and empower Americans to prepare for and respond to emergencies including natural and man-made disasters. 

Ready.gov has hundreds of printable flyers from how to build a disaster kit to testing & exercises for disaster plans.  There are many 1 page flyers and notices that can be printed out and distributed with rent statements or a community/common area.

If you are interested in learning more about emergency preparedness and local resources FEMA recently launched an internet community The National Preparedness Community With over 26,000 members this is one of the nations largest online public networks organized to improve resilience against all hazards.  

The community includes many resources including:

  • Posters
  • Ready to use templates
  • Web banners
  • Widgets
  • Articles
  • Blog Posts
  • Social Media Tips

Make sure you are prepared as you never know when a disaster may strike!

Snake Precautions - August 2013

Snakes are an important part of our ecosystem, playing a major role in helping control rodents, insects and even other snakes. However, some snakes can also pose quite a threat to humans. Below is information about how to understand snake reactions and habitats and some tips on reducing the chance of a deadly encounter.

Why They Bite

According to wildlife experts specializing in snakes, there are about 2,700 known species. Of these, about 20 percent are venomous. The most common venomous snakes in North America are:

  • Rattlesnakes
  • Cottonmouths (aka water moccasin)
  • Coral Snakes
  • Copperheads

Snakes, report the experts, will usually bite for one of the following reasons:

  • If they sense that you smell like food.
  • If they believe they are being harmed.
  • If they become frightened. Snakes are usually as afraid of you as you are of them - and their fright will put them on the defensive.

Most snakes are adaptable to their environment but most have specific habitat requirements. These may include underground, in trees or in damp and wet environments. Some of the common environments where snakes may be found include wood or lumber piles, junk and refuse piles, attics, shrubbery against foundation walls and unmowed lawns and fields among other places. Snakes will change their habitats as needed with such events as floods, droughts and drastic temperature changes.  

There are several occupations that are more apt to encounter a dangerous snake. These include, but are not limited to:

  • Landscapers
  • Surveyors
  • Plumbers
  • Facilities personnel,
  • Pest control personnel
  • Heating Ventilation and Air Conditioning personnel
  • Woodworking personnel

Workers should always be aware of the environment in which they are performing their tasks and should be prepared to take precautions to help keep them safe. Do not assume that a snake is not poisonous. Unless you are an expert on snake identification, it is best to leave the area and contact a professional immediately to remove the snake(s). Few humans have the reflex speed to ward off a striking snake - so attempts should not be made to approach a snake.

Experts report that some ways to help prevent snakes from making your building or premises their habitat include:

  • Covering holes in foundation walls with concrete or other types of solid covering.
  • Keeping shrubbery away from foundation walls.
  • Keeping shrubbery and trees trimmed and lawn areas cut.
  • Eliminating snakes' food supply by instituting an effective rodent control program.
  • Removing common hiding places such as wood piles and rubbish piles.
  • Placing snake repellent around your premises (this method has not proven to be consistently effective).

Most states consider snakes, poisonous and non-poisonous, to be non-game wildlife and they are protected by law. Several agencies are available to provide you with information regarding snakes. These include local and state Wildlife and Game offices, certified and licensed pesticide control operators and local exotic veterinarians.

Remember, if you encounter a snake or snakes they can usually be safely removed by professionals

Barbeque Grill Fires - July 2013

Your tenants want to grill with a small flame in their balcony fire pit. Sounds reasonable. So, what's the big deal?

The Big Deal 

A recent $2 million claim paid by Fireman's Fund involved an apartment resident who used a gas grill on his balcony but forgot to turn it off after cooking. The grill continued to operate on low heat for about 15 hours when the gas line from the propane tank finally melted causing the tank to rupture and explode. Fire spread up the unit wall and into the attic. A number of other tenants lost their belongings and became homeless that night. The apartment complex sustained substantial damage and financial losses.

A tenant at another complex caused a $40,000 fire loss at his apartment building insured by Fireman's Fund. He overheated his turkey fryer oil, it overflowed the equipment and the propane gas burner ignited it. Not a very festive Thanksgiving day for the tenant and other residents.

A severe fire in Michigan killed a pregnant mom and three children when a fire believed to have started with their barbeque grill engulfed their home. The husband pulled from the fire was burned over 85 percent of his body.

Fires such as these are not a rare occurrence. A small propane leak in the fuel line or valve can result in a raging fire that can destroy a building. A grill left on can overheat, damaging key components such as the rubber fuel line or supply valves causing the fuel to ignite. This exposure to fire coupled with the generally smaller decks found with apartments and be a dangerous combination.

Although tenants want to enjoy some of the same amenities of a detached, single-family home - and apartment complex owners and managers may want to provide these amenities to attract and keep tenants - fire safety makes this practice impractical.

Solutions

How should apartment owners and managers approach this issue? Many already have the choice made for them because local codes may not allow the use of grills and other flame-producing equipment within a predetermined distance. This is usually 10-25 feet from the building - and definitely not on balconies, decks or under overhangs. Unfortunately, sometimes jurisdictions may have codes against grills and flame-producing equipment - but do not readily enforce them.

At a minimum, tenants should not be allowed to use or store grills, or other flame-producing equipment, on their decks or porches. This includes propane gas cylinders and flammable or combustible liquids such as charcoal lighter fluid.

How can we accommodate residents and maintain a fire-safe property? Based on multi-family housing industry best practices and national fire codes, here are some ideas that may work at your facility if you choose to allow grills and other flame-producing equipment:

  • Provide an outdoor area - at least 25 feet from your buildings - where residents can store and use gas and charcoal grills and fire pits. You can prepare the area by removing combustible materials and by providing proper fire extinguishers. A shed can be located nearby - again, 25 feet or farther - to store grills and gas cylinders or other flammable materials when not in use.
  • Consider providing a central complex-owned-and-maintained grill area with piped-in natural gas, permanently installed grills and fire extinguishers. Besides eliminating the need for residents to own and maintain their own grills, this is an excellent amenity to help market your property. If residents would like small fires, a permanent brick fire hearth can be constructed for his purpose - eliminating the need for portable fire pits.
  • If you choose to allow grills in safe areas at least 25 feet from structures, provide tenants with written grilling safety information. Also, provide written information about your management team's "zero tolerance" for tenants breaking these rules because of the life-safety and fire-damage potential to your property.

Enforcement

The key to protecting your property is to enforce your rules. Although some rules are more important than others, fire-protection and life-safety rules such as these must be strictly enforced. Grills and other open-flame devices used on decks and balconies do risk other tenant's lives as well as their belongings. Once you establish rules they should be provided in writing to tenants, conspicuously posted and fully enforced.

Silent Leases

What if your lease is silent on the issue of grills or outdoor fires? The landlord has a duty in most jurisdictions to ensure the safety of their tenants and guests. This extends to protecting against fire and life-safety hazards such as those that grilling may create.

Consider working with legal counsel to draft a letter to all tenants explaining grill safety rules and why you are enacting them. Creating a convenient, secure storage area and providing picnic tables nearby will help. Local fire code enforcement agencies may also work with you as part of their fire prevention and community involvement initiatives. 

Fire-Safe Grilling Season

Outdoor grilling is an important part of summer for many families, including those who live in multi-family dwellings. If your organization chooses to allow grilling or open flame equipment options such as fire pits, recognizing the risks, establishing guidelines and working with your tenants to assure that these guidelines are enforced should reduce the potential for a fire so we can all experience a fire safe summer grilling season.

Information provided courtesy of Fireman's Fund Insurance Company

What should I do if someone falls in my parking lot? - June 2013

If you are on site when the incident occurs there are several things you should do and a few things you should avoid doing.

Do:
1) Go immediately to the scene of the accident
2) Be courteous and businesslike
3) Inspect the scene carefully
4) Get all essential details from those nearby
5) Report each claim to your agent
6) Report true facts, not fiction

Care of Injured Person:
1) Make the injured person as comfortable as possible
2) Arrange for prompt first aid or medical care, but do not suggest that we will pay all doctor or hospital bills
3) Ask the injured person how the accident happened, and try to obtain their name, address and phone number

Secure Names of Witnesses
1) Tactfully ask for the names, addresses and telephone numbers of all witnesses. Are they friends or relatives of the injured party?
2) Get names and addresses of all employees present, and have them fill out an accident report at once
3) If no employees saw the accident, have two or more of them inspect the scene and then fill out an accident report

Inspect and verify the conditions where the accident occurred:
1) Note whether any surveillance cameras may have recorded the incident

Note and photograph all conditions that may have contributed to the incident:
1) Is surface clean and dry, are there any hazards?
2) Is the area well lit?
3) Document shoe type of the injured person
4) Save any objects that may have contributed to the accident

Don't:
1) Enter into a dispute with the injured party over the cause of the accident
2) Reprimand any employees at the scene
3) Offer to pay medical expenses
4) Admit responsibility
5) Mention insurance
6) Discuss the incident with strangers (including on telephone calls)
7) Permit photographs to be taken by anyone other than those investigating the incident for you

Accidents at your place of business always exact a toll. If you follow these recommendations, you'll be able to minimize the disruption and get back to normal operations soon.

 

Are your windows safe? - May 2013

Is the glass in your business windows properly designed for the exposures it could be required to withstand?

Depending where you are located, your building's windows could be subjected to high winds and exposure from windborne debris, hail, earthquakes, vandalism, attempted break-ins/robberies, random or intentional gunfire, and potential terrorist activities.

What to do

There are various specialty window manufacturers that have developed windows or window coatings designed to resist some or all of the above listed exposures. Each manufacturer has taken a different approach to maintaining the integrity of windows.

One approach consists of laminating various sheets of material together, which allows the material to maintain its integrity without the glass shattering into smaller fragments. Other companies have taken a different approach - they place a coating over the existing windows and window frames to help the existing glass maintain its integrity.

Some specialty security windows offer an entire system consisting of a window frame that is designed to properly hold the glass panel in place when subjected to the various forces that the window may encounter. These shatter-resistant glass panels and glass coating designs have also been incorporated into skylights and other overhead window applications. Please consult the Internet under "shatter resistant glass/windows" for a listing of manufacturers of protective glass/windows.

In addition to windows on the walls of the building, skylights and other ceiling/roof windows are also vulnerable. Large windows, glass doors, and skylights need to be braced by solid wall or roof areas. Without adequate bracing, the movement of the house in an earthquake or other disaster may shatter windows and skylights. Tempered or wired glass, or a layer of shatter-resistant film, can keep the glass from breaking into shards.

These specialty windows can be costly and the building owner needs to weigh the potential exposures against the additional cost. Refer to building codes/construction standards for your local jurisdiction, most notably the east coast states that are regularly visited by seasonal hurricanes, areas traditionally known for tornado activity, and the earthquake-prone areas on the west coast.

Before replacing your existing plate glass windows with one of these specialty glass panels or coatings, please consult with an architect or glass specialist to determine if the existing window frame is of appropriate design to adequately secure the new upgraded security glass. The window may not perform as it was designed (if installed in an inadequate frame), resulting in the window glass performing as advertised, but the frame may not have the ability to retain the window glass.

 

Insurance - Wind & Hail Cosmetic Damage Exclusion - April 2013

As part of Insurance Service Office (ISO) 100 page commercial property insurance coverage form revision to take effect April 1, ISO added a cosmetic roof limitation.

ISO is the defacto standard of insurance policy forms and all 100 of the top US property & casualty insurers are customers of ISO.

The ISO endorsement actually contains two options: the first allows insurance carriers to cover a building on a full replacement cost basis, but limit the valuation on "roof surfacing" to actual cash value (ACV). 

Option two applies to the cosmetic limitation, which is defined as any kind of marring or pitting or other superficial damage specifically from wind and hail that alters the appearance of the roof but does not prohibit it from functioning as intended as a barrier.

The endorsement can include both the ACV option and the cosmetic damage option or an insurer can elect to apply one or the other.

It is to be determined how many insurance companies will actually start applying this endorsement, however given the fact this was created by ISO at the insurance company clients requests it is expected many insurance companies will begin using this endorsement in the near future.

As always, it is very important to receive a full listing of all insurance policy forms  when reviewing insurance proposal options and to obtain copies of all forms that you are not familiar with.

 

Conduct Self-Inspections of Property - March 2013

A safety program and real estate ownership goes hand-in-hand. While it is said that the value of real estate is based on three important considerations, "location-location-location" the value of a safety program is driven by "documentation-documentation-documentation."

The Value of a Documented Safety Program

Documentation is at the heart of any safety program, no matter how many properties one owns or manages.

Without clear documentation regarding safety issues at the property or facility, everything is reduced to hearsay. If a tenant, customer or employee injury occurs on your property, and legal action is taken, the difference between success and loss may come down to one thing: the accuracy and detail of your safety program. 

In other words, you should be able to authenticate the efforts you have taken to assure the safety of those who have access to your property.

Not only should your safety program substantiate that you have been inspecting your property on a regularly scheduled basis, but it should also show that you have been making necessary repairs.

The Importance of Self-Inspections

Performing regular inspections of your property may well result in needed repairs, but without a formal safety program - one that documents your actions - you have little or no defense in a court case. 

Establish a formal "self-inspection" program. It will assure that inspections are carried out consistently at all properties, and corrective measures are taken if problems are discovered.

Set up your inspection on a regular schedule, whether weekly or monthly, and stick to the schedule. Once each inspection is completed, and corrective actions noted, with dates, times and work performed, retain the records in a permanent file. There is no telling when an injury claim may be brought against you. Additionally, such records can be used in an internal audit of safety measures taken at your properties.

Each line of the self-inspection form should be checked-off as either OK, not applicable, and what action, if any, was taken to correct the issue. 

 

How to service Portable Fire Extinguishers - February 2013

To be sure that your portable fire extinguishers operate when you need them most, you should perform two service functions regularly: inspections and maintenance. Most companies hire a service firm to perform the annual maintenance function but often ignore the manufacturer's recommended inspections. 
 
Inspections
Inspections of your portable fire extinguishers can be conducted in-house by a designated employee who is part of your safety team and who has received proper training.

Inspections of all units should be performed monthly to assure that each unit is fully charged and free from obvious damage that may hinder proper operation if needed.
 
When inspecting fire extinguishers, follow this checklist

  1. Is the unit clearly visible, easy to access, and located in a designated place known to all employees?
  2. Are operating instructions clearly legible and the label turned outward for easy reference?
  3. Are the tamper seals intact?
  4. Do the pressure gauges indicate the unit is fully charged?
  5. Is there any obvious physical damage or corrosion present?
  6. Are the hoses cracked or split; are the nozzles clogged or obstructed?
  7. Are various components intact and secure?

When the inspection is completed, the inspector dates and initials the inspection tag, which is affixed to each unit.
 
Maintenance
Maintenance is usually performed by an outside service company and should be conducted at least annually, or every six months for carbon dioxide units. 

Maintenance includes recharging annually, or after every use, with a thorough examination for physical damage, plus repair or replacement as needed. 

After the extinguisher has been recharged and passed the maintenance test, a new tag should be attached to each unit to be used for monthly inspections.

 

Property Owners Can Be Liable for Murder - January 2013

Loss Amount: $300,000

What Happened:

A real estate firm owns and manages several commercial buildings in New York City. The tenants consist of small stores and offices. A customer shot and killed the owner of a retail music store in one of the buildings. The family of the victim successfully sued the building owner. The building owner was held negligent for the murder that occurred on their premises.

An investigation revealed that the customer and the store owner were close acquaintances.

The customer shot the tenant when a violent argument erupted over a personal matter.

There was no "Hold Harmless" clause in the lease contract. A Hold Harmless clause would have held the building owner harmless for any losses that were caused by the tenant or within the tenant's unit.

Lessons Learned:

Many building owners have long-term tenants, some of whom have very old leases that were written long ago. These leases have not kept up with changes to laws and court decisions that impact not only the tenant, but the property owner as well.

Property owners should have legal counsel review tenant lease agreements to include an appropriate Hold Harmless clause in favor of the property owner that includes:

  • Indemnification and defense language.
  • A Liberalization Clause that will extend the Hold Harmless and Indemnification clause to reflect changes afforded by subsequent case law.
  • A statement indicating that the tenant is required to hold the owner harmless from all losses arising from the leased premises, in whole or in part caused by the tenant.
  • A Waiver of Subrogation clause.

Many states are raising the level of responsibility for building owners to secure their premises, holding building owners responsible for situations that may be difficult to control.

Courts may rely on an area's reputation when considering whether a building owner took appropriate steps to ensure tenant safety. If you have not already done so, contact your local police department to determine if your current security measures are sufficient for your property(ies).

How Secure is Your Parking Lot? - December 2012

Have items from a customer's or tenants vehicle been stolen and the vehicle vandalized while in your parking facility or lot? Could this have been avoided? What if someone is assaulted in the parking area? How would these incidents impact your business?

Liability for loss or injuries suffered by your tenants or customers because of a third-party criminal activity in your parking facility is a significant exposure to your operation.

Parking lots, by their very nature, attract crime. They are typically unsupervised and provide places of concealment.

Business owners have been held liable for being aware of security problems and failing to take appropriate actions to resolve them. Owners have also been held liable for not being aware of security problems that exist.

The following are steps you can take to develop a crime-prevention program for your parking lot.

Criminal Activity Review
Complete a review of all crime incidents in your parking lot over the past several years and contact the local police department to get information about crimes in your neighborhood. This information can be used to determine patterns, and if the criminal activity is increasing or decreasing.

Facility Security Measures
The best time to implement appropriate controls is during the planning stages for the parking lot or facility. However, improvements can be made to existing lots.

Security devices such as alarms, cameras, closed circuit television (CCTV) and access control systems can be useful but not solely relied on. Look at your facility and see what can be done to improve lighting, secure perimeters, secure elevators and stairwells, eliminate hiding spaces and provide good visibility throughout all parking levels or areas.

Can you eliminate blind spots or dark areas? Would installing a fence around the perimeter help? Patrols of the perimeter and interior of the parking area should be conducted periodically at irregular intervals by your staff or a private security contractor. These patrols should be as conspicuous as possible - since the emphasis is on deterrence rather than apprehension. The staff should be equipped with two-way radios, cell phones or other means of alerting staff or police to potential problems.

Signs can be posted to advertise the security measures that are present, such as CCTV, guard/patrol, etc. You must not, however, advertise any security measures that are not provided. This practice can lead to legal implications if problems occur and can result in liability for your operation.

Regular audits of security procedures and equipment should be performed to ensure that the procedures and equipment are up to date and applicable to current situations and/or conditions. Additionally, there should be a program for preventative maintenance and repair for all fencing, lighting and other security devices and systems. Failure to repair security equipment can be just as damaging in a lawsuit as failure to provide adequate security.

Legislation
Some cities - such as Pittsburgh and others - have enacted ordinances that provide specific security requirements for parking facilities. Check with your local government office, the police department, and your legal counsel to determine if there are any specific security requirements for your parking lot.

Proactive Stance
Failure to recognize security problems - and/or failure to take appropriate actions to resolve these problems - can make you liable for the damages related to them. Management of hotels with parking lots and/or facilities must adopt a proactive stance to reduce or eliminate crime on their property by identifying security problems and applying appropriate security measures to remediate them.

 

Flood Insurance - Understanding the Basics - November 2012

Almost all property insurance policies exclude Flood damage through a Water Damage exclusion.  This exclusion is fairly broad and excludes: 1) Flood, surface water, waves, tides,tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not; 2) Mudslide or mud-flow; 3) Water that backs up or overflows from a sewer, drain or sump; 4) Water under the ground surface pressing on, flowing or seeping through: Foundations, walls, floors, pave surfaces, etc..

In order to secure insurance coverage for many of these items separate Flood Insurance must be purchased.  A Flood Insurance policy does not buy back all of these items excluded and is most often defined as:  A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is the policyholder's property) from one of the following: Overflow of inland or tidal waters; Unusual and rapid accumulation or runoff of surface waters from any source; Mudflow; Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.

If your property is located in a special high hazard flood zone (zones A or V) private insurers will normally not offer flood insurance, or have very high deductibles.

Flood Insurance is available for almost any structure through The National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA) that works closely with nearly 90 private insurance companies to offer flood insurance.  The NFIP program rates are set and do not differ from company to company or agent to agent.  These rates depend on many factors, which include the date and type of construction of your property along with your buildings level of risk.

The NFIP offers both standard flood insurance policies for properties located in high hazard flood zones as well as preferred risk policies for properties located in non high hazard flood zones.  

What is covered by a flood policy through the NFIP:

  • The insured building and its foundation
  • Electrical and plumbing systems
  • Central air conditioning equipment, furnaces and water heaters
  • Refrigerators, cooking stoves and built-in appliances such as dishwashers
  • Permanently installed carpeting over unfinished flooring
  • Permanently installed paneling, wallboard, bookcases and cabinets
  • Window blinds
  • Detached garages (up to 10 percent of building property coverage); detached buildings (other than garages) require a separate building property policy
  • Debris removal

What is not covered by a flood policy through the NFIP:

  • Damage caused by moisture, mildew or mold that could have been avoided by the property owner
  • Currency, precious metals and valuable papers such as stock certificates
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools
  • Living expenses such as temporary housing
  • Financial losses caused by business interruption or loss of use of insured property
  • Most self-propelled vehicles such as cars, including their parts (see Section IV.5 in your policy)

Floods are the #1 natural disaster in the United States and one of the most overlooked aspects of an insurance policy.  Many projects are built with in feet of high hazard flood zones by developers to avoid the mandate of flood insurance, therefore it is important to analyze the exact surrounding characteristics of each property and not just dismiss flood insurance due to a determination that states the structure is not in a high hazard flood zone.

 

California Governor Jerry Brown signs ADA lawsuit abuse measure into law SB-1186 - October 2012

California Governor Jerry Brown has signed into law Senate Bill 1186 geared to prevent the ever growing frivolous lawsuits of American with Disabilities Act (ADA) violations.

Nearly 40 percent of ADA lawsuits are filed in the state of California.  There is a serious problem in the state where attorneys are filling shakedown lawsuits negotiating monetary settlement with no intention of improving access for persons with disabilities.

A San Diego based attorney, whom filed ~500 such lawsuits over a three year period was recently disbarred as many of the suits included a plaintiff whom was not even aware the suits had been filed.

A key provision of the legislation bans "demand for money" letters.  Letters can still be sent to a business alerting them of a potential violation or infraction, but that letter can't include a "demand for money".  Attorneys will also be required to send any letter regarding ADA issues to the California State Bar.

The law also prevents stacking of multiple claims, a common practice to increase monetary damages, and requires the plaintiff to explain the need for multiple visits to the same business with a known uncorrected barrier to access.

As the bill includes an urgency clause and was passed by the Senate on a 34-3 vote and 77-0 in the Assembly the law will go into effect immediately.

A complete copy of the bill can be viewed at: http://leginfo.legislature.ca.gov/faces/billAnalysisClient.xhtml

 

Underwriter Laboratories Warns of Counterfeit UL Mark on Fire Sprinklers - September 2012

Underwriter Laboratories (UL) is notifying distributors, fire departments, regulatory agencies and authorities having jurisdiction that the Fire Sprinklers identified below bear a counterfeit UL Mark for the United States and Canada. Although the sprinkler frame is marked with the word "TYCO" and the thermo bulb is marked "JOB F5," the sprinkler was not manufactured or labeled by Tyco International, Inc., its affiliates or agents and the thermo bulb was not manufactured by Job, GmbH.

The Fire Sprinklers have not been evaluated by UL to the appropriate Standards for Safety and it is unknown if these Fire Sprinklers comply with the UL safety requirements for the United States or Canada.

Name of Product: Upright and Pendant Fire Sprinklers Model T-ZSTZ-15

Identification: On the product: The counterfeit fire sprinklers can be identified by "UL" and "TYCO" marking on the wrench boss of the fire sprinkler frame and  may have model T-ZSTZ-15 on the sprinkler deflector.  Sprinklers manufactured by Tyco that are authorized to bear the UL mark do not have "UL" and "TYCO" marking on the wrench boss.

Sold and Distributed By:
Migo International Trading Company Limited
Room 2404, Cell A 
No.100 Nanjing Road
Qingdao City, Shandong Province
China

To read the full article which contains pictures of the correct and counterfeit sprinklers, copy and paste the url in your internet browser:  http://www.ul.com/global/eng/pages/corporate/newsroom/newsitem.jsp?cpath=/global/eng/content/corporate/newsroom/publicnotices/data/ul-warns-of-counterfeit-ul-mark-on-fire_20120615080000.xml

To read the Tyco Bulletin on Counterfeit Tyco Logo and UL Mark on Fire Sprinklers Link, copy and paste the following url in your internet browser:  www.fergusonfire.com/pdfs/Counterfeit_Sprinklers_BulletinV2-7_18_12-2.pdf

Preventing Legal Liability from Legionnaires - August 2012

There are 18,000 - 20,000 cases of Legionella annually. It has been reported that up to 70 percent of all building water systems are contaminated with Legionella, the bacteria that causes Legionnaires' disease. Legionnaire's Disease has the potential to damage property values and create legal liability. This disease can be prevented and controlled.

The American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. will release ASHRAE Standard 188: Prevention of Legionellosis Associated with Building Water Systems in the upcoming months. This standard will apply to new and existing human-occuppied buildings. It will require that building owners, designers, builders, installers (including commissioning), managers, and operators, who maintain and service centralized industrial or commercial building water systems implement sound maintenance procedures, and utilize hazard controls. It covers potable water systems; cooling towers and evaporative condensers; whirlpool spas; decorative fountains and other water features; and aerosol-generating air coolers, humidifiers, and washers.

ASHRAE Standard 188, will specify uniform practices for risk assessment and management including assessing risk of the water systems, including developing a risk management plan (Hazard Analysis Critical Control Point); and documenting, monitoring, and performing validation of the plan. The standard is not the answer to all aspects of prevention and disinfection and control Legionella. If you are affected by the standard, you need to stay current with current literature and work with your boards of health and other experts.

For further information: http://www.facilitiesnet.com/facilitiesmanagement/article/New-ASHRAE-Standard-188-to-Prevent-Legionnaires-Disease--12966

ASHRAE develops standards for both its members and others professionally concerned with refrigeration processes and the design and maintenance of indoor environments. ASHRAE is accredited by the American National Standards Institute (ANSI) and follows ANSI's requirements for due process and standards development.

Environmental Insurance Solutions - July 2012

Environmental insurance policies are readily available to protect against the numerous exposures faced by Real Estate Owners. 

There has never been more insurance companies, broader coverages, lower premiums or lower deductibles available for real estate owners.

It is important to note that environmental insurance policies are very "manuscripted" policies, meaning there is no real standard set of comprehensive coverages. 

Some coverage options include:

  • Bodily Injury, Property Damage and remediation costs arising from known or un-known pre-existing pollution incidents on-site or migrating off-site
  • Bodily Injury, Property Damage and remediation costs arising from new pollution incidents on-site or migrating off-site
  • Include Mold, microbial matter, legionella as pollutant
  • Diminution in property value
  • Natural resource damages
  • Non-owned offsite coverage
  • Business interruption expenses
  • Multi-year policy terms
  • Discovery of pollution as coverage trigger for on-site cleanup (many policies require third party claim to trigger)
  • Restoration costs included in remediation costs
  • Coverage for formerly owned or operated designated sites
  • Allow for mortgagees as additional insureds
  • Extended reporting provisions
  • Coverage during the transportation of waste

In addition to the above coverage options many environmental insurance companies are willing to modify policy forms, therefore when reviewing insurance options always request to review a complete set of policy forms and do not be afraid to request form language changes.

Common Environmental Claims Examples for Real Estate Owners - June 2012

When most people think of environmental damage the first thing that comes to mind is Erin Brockovich and evil energy companies dumping waste into a river.

While cases similar to the dramatized plot in Erin Brockovich do exist, there are many un-intentional situations that can lead to a catastrophic loss for real estate owners. 

Consider some of the following actual claim scenarios:

Example #1
The storage tank for a building owners backup generator slowly leaks over a multi-year period and the fuel spills into a drainage ditch, contaminating the building owners property and the adjacent site.  Total clean up costs exceed $1,000,000 

Example #2 
A property owner expanding their facility hires a paving contractor who sprays an oil-based binding layer on crushed aggregate planning to complete the asphalt parking and drive area the next day.  A heavy overnight rain causes the binding layer to run off into groundwater supply contaminating residential wells.  Total clean up costs exceed $500,000  

Example #3
Tenants of a large office building continually complained of odd odors.  The tenant decided to hire there own investigator and discovered Legionella in the HVAC system and parts of the plumbing.  Several building occupants alleged Legionellosis disease aka Legion Fever.  The building owner settled with several of the occupants and incurred costs for complete HVAC and plumbing system detoxification.  Total bodily injury and clean up costs exceeded $750,000

Example #4
A building owner leased space to a dry cleaning facility.  PCE was detected on-site, in the groundwater and at an adjacent shopping center.  The building owner was required to remediate the contaminated soil and groundwater with total costs of $460,000

Example #5
A property owner had a tenant who began to smell a pungent odor and heard noises in the walls.  The property owner called an exterminator who discovered an exterior wall housing a colony of thousands of bats.  The Health Department determined the property was uninhabitable because of poor air quality resulting from the ammonia in bat guano.  The bats could not be exterminated because they are a protected species.  The building owner sustained a substantial loss of rental income and diminution in property value.  The owner eventually constructed bat houses to entice the bats to leave.

Example #6
The tenant of a property owner complained of dust conditions in their suite from tenant improvement operations being conducted at adjacent suites.  The tenant took dust samplings which revealed the dust was laden with heavy metals (aresenic, cadmium, chromium and lead).  The building owner was forced to hire an environmental contractor/consultant to investigate and remdiate the dust increasing the tenant improvement costs by $100,000.

This is just a small sampling of actual claim examples faced by Real Estate owners. 

The largest environmental claims do stem from the improper storage and disposal of pollutants by manufacturing tenants.  Claim examples were not provided for this exposure, but just imagine if you leased the facility or land to the energy company in the Erin Brockovich dramatization!

 

Lesson Learned - Cathodic Protection - May 2012

Loss Amount:  $939,700

What Happened:

An insured incurred water damage to product stored in a distribution warehouse due to an underground water main break to the sprinkler piping. This exposure is more predominate in buildings over 20 years old and in this case, the building was constructed in the early 1980's. The subsequent action taken was to have a licensed contractor conduct a ground penetrating analysis to determine the cause for this leak. It was determined that the leak occurred as a result of corrosion deterioration of the metal pipe brought on by electrolysis.

Electrolysis is a process that can occur to underground water piping. It happens over extended periods of time from pipe being in contact with an environment which contains enough ions to conduct electricity such as soils. Prior to the claim, there had been no periodic testing to determine the structural integrity of the underground pipe

Lesson Learned:

As a preventative measure consultants should ask all insureds that own sprinklered buildings over twenty years old, if they have ever had the underground water piping tested to check the structural integrity.

Cathodic Protection is the recommended solution. The basic principle of all Cathodic Protection techniques is that the unwanted corrosion reactions are suppressed by the application of an opposing current, therefore stifling corrosion cells. 

If less than this amount of cathodic current is supplied some corrosion would still occur, but the level of corrosion would be less than without any Cathodic Protection. The application of a Cathodic Protection current basically reduces the corrosion rate of a metallic structure by reducing its corrosion potential towards its immune state as shown for iron and steel or for aluminum and its alloys.

Lessons Learned are ACTUAL insurance company losses, Information provided courtesy of Fireman's Fund Insurance Company


Aluminum Wiring Hazard Mitigation - April 2012

The event: a fire at the Beverly Hills Supper Club in Southgate, Kentucky on the night of May 28, 1977. The fire killed 165 people and injured more than 200 people -- making it the third-deadliest nightclub fire in U.S. history. The cause: an aluminum wire electrical system -- the factor cited often in causing building fires.

Risks of Aluminum Wire Electrical Systems

Aluminum wire, normally found in residential building structures -- apartments, condominiums, and private homes -- fails typically in electrical connections that are 15 amps and 20 amps (#12 gage and #10 gage). Aluminum wire installed between 1965 and 1971 is most likely to be "old technology" wire (AA-1350) and that installed from 1972 to 1975 could be either "old technology" wire or "new technology" wire (AA-8000). Even after the discontinued use of aluminum wire, contractors were allowed to use existing stock -- and residential buildings built as late as 1975 could contain "old technology" aluminum wire.

The "old technology" aluminum wire was more subject to failure than copper wire because of:

  • Creep -- a measure of the rate of change in gradual deformation as the result of stress. Aluminum wire has a higher creep rate than copper wire.
  • Cold Flow -- related to creep but a permanent deformation as the result of momentary stress. Cold flow does not vary over time.
  • High Expansion Coefficient -- expansion while under heat stress. Aluminum wire has a higher coefficient of expansion than copper wire.
  • Corrosion (Oxidation) -- formation of oxides causing high electrical resistance. Often cited as a contributing cause of failure at aluminum connections.
  • Brittleness -- aluminum wire does not have the strength and flexibility of copper wire.

These are all physical features of aluminum wire that can create loose electrical connections that can lead to electrical arcing and can generate enough heat and sparks to ignite combustible material.

The "new technology" aluminum wire was an attempt by the aluminum industry to correct some of the product's failure characteristics. The aluminum wire installed in 1972 and after has lower cold flow and brittleness than what was produced prior to 1972. However, these failure characteristics were not totally eliminated and the problems with high-expansion coefficient and oxidation remain.

Reducing the Risks of Aluminum Wire Electrical Systems

The methods available for reducing an aluminum wire fire hazard:

  • Re-wire the building replacing all aluminum branch circuit wiring with copper. This is considered the best but most expensive repair method for aluminum wiring.
  • COPALUM Crimp Connector is the attaching of a piece of copper wire to the existing aluminum wire with a specially designed metal sleeve and crimping tool. The crimping tool uses a full-compression crimp method to make what is, essentially, a cold weld that results in a permanent connection. There is no major disadvantage in this method as it may be used for most every type of electrical connection and it is considered a permanent repair. Only distributors authorized by the manufacturer (AMP, Inc.) has the crimp tool available for rental. Rental privileges are granted only to electricians that have completed a training program.
  • "Pig-tailing" is the disconnecting of the aluminum wire, joining it to a short length of copper wire and using an aluminum/copper-type wire connector. The major disadvantage of this method is that some brands of the twist-on wire connectors have been known to overheat. This method is one of the least effective in reducing the fire hazard because the failure-prone aluminum/copper connection is not eliminated -- only moved from a terminal to a splice.
  • CO/ALR (pronounced "CO-LAR") Devices are receptacles and switches designed to be compatible with aluminum wire (only available in 15 amp and 20 amp ratings). The major disadvantage of this method is that it is limited to only receptacles and switches -- which do not include ceiling-mounted fixtures, permanently wired appliances, dimmer switches and ground fault circuit interrupters (GFCI). Also, the device manufacturers recommend annually removing the receptacles and switches and testing the terminals for tightness. If this maintenance is not completed, the manufacturer’s specific instructions are violated. This method is also one of the least effective in reducing the fire hazard because of the incomplete and impermanent repair.
  • The recommended solution to aluminum branch circuit wiring, besides a complete re-wire or the COPALUM crimp connector method (the only two solutions recommended by the Consumer Product Safety Commission), is:

Note: Twist-on connectors (i.e., wire nuts), whether Listed or not, are not recommended because of their questionable performance history and specific installation techniques.

Recommended Solutions for Aluminum Wire Installations

Old Technology (AA-1350)

  • Outlets & Switches: CO/ALR
  • Fixtures, Appliances, & Junctions*: (High) pressure crimp method.** Terminal Connectors (e.g. set-screw lugs).
  • Sub-Panel: Listed Breakers (i.e. AL-CU).
  • Maintenance: Annual infrared survey or annual physical inspection including torque/tighten and clean.

New Technology (AA-8000)

  • Outlets & Switches: CO/ALR
  • Fixtures, Appliances, & Junctions*: Per NEC (i.e. methods using products Listed for aluminum).
  • Sub-Panel: Listed Breakers (i.e. AL-CU).
  • Maintenance: As required by authority having jurisdiction.

*All components must be UL Listed for use with aluminum connectors.
**COPALUM only currently known method.

 

Avoiding Slip, Trip, and Fall Incidents - March 2012

Slip, trip, and fall incidents are a leading cause of employee and customer injuries, resulting in substantial insurance losses each year. The National Safety Council estimates that slip, trip, and fall accidents represent as much as 60 percent of all employee injuries and 80 percent of customer injuries. These accidents range from simple cuts and bruises to permanent disability - even fatalities. The sad fact is that many slip and fall incidents are preventable.

What can we do to prevent slips, trips, and fall incidents in our workplace?

  • Regularly inspect floors, stairs, mats, and other areas inside your facility, as well as sidewalks and parking lots. Look for surface irregularities and replace or make needed repairs.
  • Make it a regular practice to clean up spills such as pet puddles and remove tripping hazards immediately.
  • Provide proper lighting in your facility, especially over stairs and in areas with surface irregularities.
  • Store yellow caution signs in an easily accessible area. As soon as spills or puddles occur, post the slippery floor warning sign over the area to help protect clients and employees.
  • Wear skid resistant or non-skid footwear.
  • Use appropriate floor cleaning products. Follow the manufacturer's instructions on the rate of application, frequency of use, and rinsing procedures.
  • Report all floor hazards, near slip, trip, and fall incidents.
  • Practice good housekeeping - store all tools, instruments, equipment, and materials in a designated area when not in use.
  • Keep all file drawers closed when not in use, or when you leave the area.
  • Dispose of trash properly.

Ladders - How to use them safely

  • Don't underestimate the danger of falls, even from what seems to be a low height.
  • Use a ladder or step stool to reach objects that are stored on high shelves. Never climb on shelves, open drawers, boxes, or chairs.
  • Follow the four-to-one rule when using a straight ladder - extend the base of the ladder at least one-quarter of its height.
  • Always face the ladder when climbing up or down. Move the ladder from side to side rather than reaching and pulling.
  • If a ladder is damaged in any way, simply dispose of it.

Tips for the winter season

  • Place floor mats and runners at entranceway - this will help keep clients and staff from slipping and falling when entering or leaving the premises.
  • Keep clean up equipment and supplies available to take care of spills and wet floors.
  • Place warning signs around wet floors until proper clean up can be completed.

 

Additional Insured Forms, am I covered? - February 2012

As with almost every answer relating to insurance coverage questions: it depends!

Most managers request proof of insurance from their vendors and tenants and request the manager and property owner be included as an additional insured.  They receive a Certificate of Liability Insurance sating certificate holder is an additional insured and file the information away.

Done, right?  Wrong!

On the top of an Acord Certificate of Liability Insurance is a disclaimer which states "This Certificate is issued as a matter of information only and confers no rights upon the certificate holder.  This certificate does not affirmatively or negatively amend, extend or alter the coverage afforded by the policies below".

What you must realize is that an insurance policy is a written contact and that an "additional insured" is an amendment to that contract extending additional insurance coverage to the additional insured.

When you request to be included as an additional insured you are requesting the contract be amended and need to review the contract amendment. 

There are literally hundreds of different types of additional insured contract amendments, each one providing a different type of insurance coverage for the additional insured.

Therefore a certificate with out the actual additional insured form (aka contract amendment) attached should not be acceptable.

To including the transactional costs of issuing individual additional insured endorsements (aka contract amendments) the majority of insurance companies are including "blanket additional insured forms" as part of their policies.  These forms provide various types of additional insured status, if required by written contract.

It is more important than ever to utilize a standard contract with all vendors that contains insurance requirements and  is executed before any work begins.  Therefore if you do not have a written contract which is not executed before work begins most blanket additional insured forms will afford no coverage. 

This same theory applies to other types of insurance requirements such as Primary Wording, Waivers of Subrogation, Additional Insured Status for Products & Completed Operations, etc..  These are all contract amendments with hundreds of variations and the actual policy form/contract amendment must be attached to the certificate of liability insurance.

 

RMSv11, What is it and what does it mean to me? - August 2011

If you own properties in Catastrophe exposed areas (Hurricane zones) or purchase Earthquake insurance and have not heard of RMS you most likely will soon.

RMS is an acronym for Risk Management Solutions whom is an independent company that provides catastrophic risk modeling to hundreds of insurance companies and financial institutions around the world.  This firm uses science to predict the financial implications of natural catastrophes.  Many insurance companies rely on RMS to help predict their exposure to loss.

RMS recently introduced a new catastrophe modeling system referred to as version 11 or more commonly as RMS11.  This new iteration of the RMS model has caused a stir in the industry by increasing the probable maximum losses for many US Insurers by up to 100%.

This is expected to prompt the financial rating agencies to demand that insurers hold more capital to protect against potential losses, which in turn will lead to increased rates.

The three main changes in RMS11 are:

1) Change in degree of "windfall degradation", meaning that storms are modelled to do more damage as the move inland

2) Include storm surge exposure.  Under most wind policies, storm surges are an excluded peril, however many court cases have compelled insurers to pay losses from storm surge

3) Updated inventory of topography, which resulted in an increase in the number of insured properties.

The "windfall degradation" is the most far reaching change.  Many properties that were previously considered not exposed to Catastrophe loss will be.  This is expected to cause a large increase in premium and deductible for properties located near Hurricane Zones.  And near can be as much as several states away!

The key is to be prepared.  Make sure to have advanced discussions with your insurance broker and companies about the implementation of RMS11 and if consideration may be given for alternative catastrophe risk modeling systems such as those by AIR Worldwide.