ANCOR LINKS May 2007 Issue
Philadelphia Insurance Companies is a preferred ANCOR Services Corporation partner
and provides its ANCOR clients with property/casualty insurance policies for property,
general liability, automobile, professional liability and umbrella insurance coverage.
Philadelphia Insurance has agreed not to exclude ANCOR members from eligibility for
any particular insurance product based solely on the member's propriety or multi-state
status. For more information on this special Marketing Agreement, call 1-800-873-4552.
Remember to let PHLY know you are an ANCOR member.
Property Risk Management “Don’t Press Your Luck”
Leslie Dugan
The following article focuses on Property Risk Management specifically for
“Providers Offering Quality Supports to People with Disabilities” and answers
the following questions:
“What are the top 10 property losses for Provider/ Social Service agencies?”
“What makes a well protected property and what do we look for as the
Insurance Company?”
“What does a good property conservation program include?”
During a recent one year period, Philadelphia Insurance Companies Loss Control Department completed
an analysis specifically for Provider Agencies and found that fire and water damage head the list of losses
by severity (fire losses) and frequency (water damage losses). For the year, there were 296 water
damage claims which resulted in losses of $2,675,500. During the same time period there were only 86
fires, however, these fires amounted to over $3,800,000 in losses. Following fire and water damage, other
types of property losses include hail, theft, employee dishonesty, wind, tornado, motor vehicle, lightning,
and roof damage from snow loads. These losses combined are still less than the fire and water damage
claims!
Fire Risk
How can your organization limit your Risk of Fire? When assessing a property for a client, we typically
focus on 5 key areas, known as “SCOPE”. This stands for Sprinklers, Construction, Occupancy Hazards,
Protection Available and Exposures. These 5 areas are the backbone of a good property risk evaluation.
Is your organization’s property provided with an Automatic Sprinkler System? Automatic Sprinklers are
the “number one” protection feature to control a fire until the fire department responds. If your
organization has a choice of which building to occupy, or is planning to build a new facility, automatic
sprinklers should be included. If your organization has a sprinkler system, is the sprinkler system
inspected and tested per the National Fire Protection Association (NFPA) 25 guidelines?
The Construction and condition of the building are also important. If possible, select a building with non
combustible construction. Proper maintenance and inspection of your organization’s facility is important.
Maintenance programs should be written and focus on “preventative maintenance” rather than “fix it when
it breaks”.
Occupancy hazards can include cooking, smoking and storage of combustible and flammable liquids
such as aerosol cans and paints. Focus on what is present in the building and what controls are taken to
ANCOR LINKS May 2007 Issue
provide protection. Is there a special extinguishing system for the cooking area? Are all flammable liquids
stored in an UL (Underwriter’s Laboratory) listed or FM (Factory Mutual) approved cabinet? Is smoking
prohibited inside the building?
Protection includes fire alarms, fire doors, fire extinguishers, and fire hoses and emergency response
programs. Is your organization’s facility provided with an automatic fire alarm system connected to a UL
listed Central Station? This includes water flow alarms, valve tamper alarms, hard wired smoke detectors,
manual pull stations, and can also include low building temperature and carbon monoxide alarms. If the
system is not connected to a central station alarm service, is the fire alarm panel staffed 24/7, and is
trained staff available to respond to an alarm? Does your organization have a written emergency
response program and does your staff train for various crises and emergencies?
The last pieces of the fire risk puzzle are outside Exposures. These are adjacent hazards that exposure
your organization’s facility and may include brush and debris and neighbors with hazardous occupancies
such as a woodworker or chemical facility. This can also include being in an active seismic zone or in the
path of aircraft. Don’t wait until after the lease is signed to find out that a neighboring business may cause
a situation that causes a disruption to your organization’s operation.
Water Damage
Water damage is the most frequent type of Provider/ Social Service Agency claim we see as an
insurance company. Of all these claims, the most frequent are from storm damage, indoor plumbing
failures, freeze-ups and sewer backups.
Most storm damage is the result of poor or inadequate roof maintenance. The perimeter of the roof must
have adequate nailing or anchoring. In a storm with high winds, the roof will peel back from the edges or
corners. This will allow the water to penetrate into the building and cause damage. Flashings should also
be in good condition. Make sure that your organization’s roof is being inspected on at least an annual
basis.
Internal piping leaks may be due to inadequate installation or maintenance. Unions and flex lines should
be inspected six months after installation to check for leaks. Inspect soldered joints at least yearly. Know
where the shut off valves are located, label them, and train staff to find them in an emergency.
To prevent frozen and burst piping, provide adequate insulation for the piping. Also consider providing low
temperature alarms in the building that are monitored by the central station alarm service or at another
constantly attended location.
To prevent sewer backups, make sure that objects are kept out of the system thru staff and client training.
Also make sure that roots, cooking grease and other debris don’t get into the piping.
Property Conservation Program
A good property conservation program is one that is written, and that encompasses all of the topics
included above as well as any other areas of your organization’s operation that have been identified as
having the potential to cause a loss and/or a possible business interruption.
This program should include the following 10 areas:
1. A Management Policy Statement
2. Fire Protection Inspection Program that also includes special hazards
3. Sprinkler Control Valve Inspection Program
4. Fire Extinguisher Inspection Program
5. 2” Drain Test and Waterflow Alarm Testing
6. A “hot work” permit program
7. Crisis Management / Emergency Preparedness Program
8. Emergency Evacuation Plan
9. A Preventative Maintenance Program
10. Program Audit and Review to update as needed.
Philadelphia Insurance provides its clients with sample Emergency Response and Property Conservation
Programs and checklists, as well as technical bulletins and e-brochures and online training programs on a
variety of Property Conservation, Auto, and General Liability and Employers Practices topics. “For-fee”
based loss control services are available to non - PHLY insureds through ePIC Loss Control. For more
ANCOR LINKS May 2007 Issue
information, please contact Mr. Jeffery Collins, Vice President of Loss Control at (610) 617-7717; or Ms.
Leslie Dugan, Regional Loss Control Manager at (800) 994-4121 ext 236.
Author LINK:
Leslie Dugan is Regional Manager, Loss Control Department for Philadelphia Insurance Companies.
Ms. Dugan is responsible for overseeing the Sunbelt, Western, Northwest, and Rocky Mountain Loss
Control Regions for Philadelphia Insurance Companies and ePIC Loss Control Services (a for-profit risk
management subsidiary of PIC). She can be reached at 1-800- 994-4121 ext.226.
The information and suggestions presented by Philadelphia Indemnity Insurance Companies in this article are for your
consideration in your loss prevention and risk control efforts. They are not intended to be complete in identifying or
reporting on every possible or significant hazard at your premises, preventing possible workplace accidents, or complying
with all of the local, state or federal health & safety related laws or regulations. The material enclosed within this loss
control reference source is intended and encouraged to be altered or redesigned by you to specifically address your
hazards.