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Construction Business Owner, August 2007
As the two-year anniversary of Hurricane Katrina approaches, the Gulf Coast remains engaged in the most ambitious rebuilding effort in U.S. history.
The first year after the storm, most of the effort went into immediate relief and recovery activities, such as repairing levees, removing debris, mud and sludge and dismantling unstable structures. Most of these tasks are complete, and a rapidly increasing army of architects, engineers, urban planners and construction professionals now are focused on getting the region back up and running.
With their help, the local infrastructure is once again taking shape. Roadways, power lines and cell towers washed away by the storm are re-appearing on the landscape. The next stage is to rebuild the homes and businesses needed to support the slowly returning population. This period of renewal presents an opportunity to reduce the human and financial toll from future hurricanes by employing the most current thinking in construction risk management.
Lesson 1: Understand and Update Your Risk Factors
During the 2005 hurricane season, many business owners learned they were underinsured. Let's look at a small machine shop owner's experience. He purchased more than $200,000 of tools over a twenty-five year period. To restart his business after a hurricane, he must find a new location and purchase all new equipment. Advances in technology make it impossible for him to replicate everything he had, and the tools he can replace will cost more than what he originally paid.
To help ensure your policy provides adequate protection, you should reevaluate the cost of replacing your building and equipment every three to five years. Ask your insurer whether you are fully covered.
Lesson 2: Remember that Buildings under Construction Are Highly Vulnerable
Buildings under construction are more vulnerable to both wind and water damage than existing properties. Construction materials, equipment and debris can become dangerous projectiles during a storm. Temporary structures such as formwork and trailers are not hurricane-resistant and usually suffer severe damage. In addition to jobsite hazards, it is important to scan adjacent properties for possible spillover exposures. For example, suppose your construction site is adjacent to a large commercial nursery specializing in container-grown plants. You can anticipate that during a hurricane, hundreds of airborne trees and shrubs will hit your project- damaging exterior finishes and envelopes and adding cost and time for debris removal.
Statistically, construction projects at both ends of the spectrum-the smallest and the largest-sustain the greatest relative hurricane damage. Smaller projects, such as homes, apartments, motels and light commercial, are of the lightest construction types (wood frame, concrete masonry and light steel frame), and all structural elements must be in place to achieve wind/water resistance. Small projects often are designed to meet only the minimum requirements of the coastal construction codes and, therefore, do not follow the best engineering practices possible for the structure.
Larger projects, such as high-rise residential and commercial developments, take longer to build and can be exposed to more than one storm season. The scale of these projects means even minimal damage can produce large dollar losses and long delays. The typical large-project schedule is sensitive to material and equipment shortages, as well as labor disruptions. However, when a storm is approaching, having the know-how to make critical decisions regarding the safety of your personnel, material storage and equipment protection can mean the difference between completing the project on time and on budget or falling into the red. Making the right decisions before a storm will also enhance your ability to recover quickly.
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