Editor’s Note: This is the first article of a two-part series covering disaster preparation and recovery. Part two will appear in August 2013.
Hurricanes, tornadoes and other severe weather conditions in the United States have had an astonishing impact on the nation’s economic state, and tragic events such as 9/11 serve as a reminder that some disasters lack the predictability of weather. To mitigate the effects of any disaster, firms must first consider impacts on its associates, who may be displaced or endure destroyed homes. Second, firms must deal with their own property loss. Finally, construction projects in disaster-hit areas are often decimated. Builder’s risk insurance provides some protection to contractors and owners, but in many coastal or low-lying areas, this insurance carries a steep premium that some contractors and owners are unable to absorb. Dealing with disasters requires two fundamental phases: preparation and recovery. This first article of a two-part series will cover preparation.
Catastrophic events rarely offer the luxury of comprehensive planning. In the case of hurricanes, victims are often granted a small window to act, and this time is used to evacuate. Tornadoes, landslides, earthquakes and terror attacks also strike with little or no warning, and their swaths of destruction are unpredictable. Often, the level of preparedness of a disaster’s victims correlates to the fatality rate and property loss.
Regardless of whether they are in disaster-prone regions, contractors must consider how they would operate in the event of a disaster and how they would recover. Unfortunately, contractors who perform work in federal buildings, military installations or international locations must also incorporate a readiness plan for the event of a terrorist attack.
Too often, disaster readiness is not considered until after an event has occurred. Incorporation of a disaster readiness plan into the fabric of the organization will allow the company to avoid dangerous guesswork in the time during and immediately after an event. Establishing a flow to the preparation process allows the most time-sensitive issues to be addressed first and the rest of the process to be executed efficiently. While separate plans should be made for the firm’s projects and the firm’s headquarters, both plans should follow the same format. This concept is illustrated in Figure 1.
Managers should understand the fundamentals of the firm’s liabilities and related policies as well as anything specific to their projects in progress, such as the following:
- Deductibles and builder’s risk/general liabilities limitations
- Customer and contractor responsibilities and obligations
- Owner disaster readiness plans instituted and generated by the customer
- Site-specific conditions and potential hazards (e.g. floodplain, coastal wind, erosion susceptibility, etc.)
- Security obligations and liabilities
Similarly, firms should keep all corporate policies and lease agreements up-to-date and should remain knowledgeable about their own policies. Policy discrepancies and lapses in general liability coverage are often discovered after an event has occurred. In most cases, insurance firms will not address these issues within a certain window of a storm event reaching landfall.
Communication and Responsibilities
Before a firm can effectively respond to an emergency, defined lines of communication and responsibility should be established. It is important that the firm be able to answer the following questions about their projects and headquarters:
- In the event of a disaster, who is all communication to be routed through?
- How will communications be conducted if traditional forms of communication such as telephone and email are rendered inoperable?
- Who will be the responsible party for each jobsite in transmitting critical information about evacuation, site preparation, etc.?
- What crew will be responsible for restoring a site or office to safe and operational conditions once they can return to the area?
- Who will be responsible for each department or site’s critical information and documentation?
- Once the event has passed, where will the teams meet and at what frequency?
In all cases, it is important to iterate that the care and wellbeing of the firm’s associates and families is paramount. By instilling this level of planning in the preparation process, associates react to their personal needs first and consult the disaster readiness plan to eliminate guesswork when attempting to return to work.
In addition to the copious amounts of paperwork stored by construction firms, electronic media must be managed. Both are susceptible to wind, water and fire damage, and both, if lost, present the firm with enormous liability. Firms should examine their exposure prior to an event being expected as well as during the time preceding a predicted event by asking the following questions:
Before an Event is Expected:
- Are files centrally organized in a room devoid of windows and potential hazards?
- Are electronic files and servers stationed in a central point within the main office?
- How are the job trailers organized? What critical information is stored on location that, if lost, would be a liability to the firm?
- Has consideration been given to remote storage and safekeeping?
While Preparing for a Predicted Event:
- Can all laptops and tape drives or bulk storage devices be stored remotely or by their users in a safe location?
- Have steps been taken to protect critical documents and equipment in case there is a breach?
- Who will be responsible for all documents that can be readily transported safely? Licenses, policies, open contracts, lease agreements and financial records should all be considered.
- After the event, what is the plan for re-establishing office communications and other infrastructure?
Ordinary procedures such as generating backups of the office’s files and requiring project managers to back up their laptops and take them home at the end of the day provide added security.
Even if the firm’s fleet consists of a small number of vehicles for field superintendents, it is important to establish a plan for their usage before, during and after the event of a disaster. Contractors with large fleets of equipment, however, need to ask themselves several questions:
In the event of a disaster, is the equipment best stored at the home office, on a specific jobsite or spread across several locations to hedge liability?
What methods are available to move a large fleet within a short period of time?
Who will be responsible for all equipment maintenance and repair during periods of extended use or dormancy during an event? What logistical considerations should be given to accomplishing maintenance and repairs under unusual circumstances?
Material-intensive firms such as mechanical and electrical contractors need to conduct similar reviews of their inventory and their strategy for protecting that inventory in the event of a disaster. Often, material warehouses lack the security and structural integrity of a hardened facility. Does this present a liability to the firm? What happens if a disaster such as an earthquake strikes the main office or warehouse but not the jobsite? How will the job be furnished with critical materials to maintain project schedules?
In addition to proper equipment and material management, contractors should implement guidelines for jobsite cleanliness and general storage. Such guidelines will reduce damage and injury caused by tools and materials hurled about by strong winds. Most contractors have a regular jobsite cleanliness policy; however, they need to make sure that their procedures address the following questions:
- How are materials stored onsite? Are materials bundled to prevent them from becoming airborne?
- If an unpredicted disaster were to occur, what would be the damage from small and large objects being blown around the site?
- Does each jobsite have customized policies governing frequency of cleaning?
- Is someone responsible for inspecting stored materials and the integrity of jobsite assets?
- Where are temporary units such as trailers, dumpsters and sanitary facilities placed on the site? On weekends or non-working time, are such items secured?
Strategic placement of equipment also serves an interest beyond simply protecting investments. Locating equipment in proximity to customers and jobsites, while ensuring their protection, allows for quick mobilization to jobsites and utilization in recovery operations.
Having addressed all internal elements of its disaster preparation plan, a firm can then consider its customers’ needs. Incorporating regular discussion of disaster readiness in progress meetings demonstrates proactive project management to owners and bolsters their confidence in the firm’s ability to meet a challenge. Furthermore, the ability to help customers keep their property safe is considerate and is an excellent marketing device. Many owners lack the knowledge and ability to prepare their sites for disaster. By being prepared internally, contractors have the time to assist and, therefore, strengthen their relationships with the customers.