ja_mageia

Insurance coverage for earthquake damage goes beyond property insurance and should include liability and business interruption insurance.

Policies are available across the country with a number of insurers. If you cannot find one locally or through a web search, contact QuakeSmart.

Coverage cost should be customized to the risk potential of your specific community, as well as what deductible and coverage you select. Earthquake insurance for small businesses can run a few hundred dollars a year. Many companies self-insure to the extent justified by a cost-risk analysis, buying coverage only for the risks they cannot self-insure.

If you have earthquake insurance, remember that your needs and coverage may change over time. Read your policy carefully and be sure you have what you need for your current situation.

A myth about insurance:

You might be thinking, “I don’t need earthquake insurance. The federal government has programs to bail me out of my business losses.”

Fact: If your community is declared a “disaster area” by your state and the federal government, you might qualify for federal assistance in the form of a low interest federal loan, which must be paid back.

For most commercial buildings, the foundation and structure account for 20-25% of what's called the replacement cost (that is, the hypothetical cost to rebuild a duplicate building), while nonstructural components (mechanical, electrical, and architectural) account for 75-80%.

Contents and furnishings belonging to occupants, such as movable partitions, furniture, files, office equipment, and specialized equipment used for your business, represent a significant additional value. Damage to nonstructural elements and contents of a building can be costly. Immediate property losses attributable to contents alone are often estimated to be one third of the total earthquake loss. (National Earthquake Hazard Reduction Program)

Mitigation, like any construction or home improvement project, has costs that vary depending on the scope of the work and conditions of the existing building. What's interesting is that while some mitigation solutions are quite costly, many are inexpensive and still highly effective. Of course, your time and the time of your employees is valuable. But there are steps you can take to raise awareness and be prepared that at least carry no construction cost.

No construction cost

• Determine your risk. Follow this link to the Get It Done tab, "To-Do"
• Calculate the cost of business disruption for one week, one month, and six months. * Talk to utility service providers about potential alternatives and back-ups.
• Ask your insurance company or agent about coverage, deductibles and prices.
• Prepare and maintain an emergency plan. Add earthquake-related information to your existing emergency plan.
• Promote family and individual preparedness among co-workers with handouts, company newsletter articles, and bulletin boards.

Under $500

• Buy and distribute emergency supplies, first aid kits, fire extinguishers, and other items recommended for emergency preparedness.
• Set up an automated telephone call or message system, web page, or email alert for emergency communications with employees and business partners.
• Brace gas-fired water heaters.
• Restrain compressed gas cylinders.
• Restrain desktop items like computer monitors, televisions, or microwave ovens from sliding off.
• Anchor tall furniture or appliances like bookshelves and file cabinets to walls or other stable items.
• Add shelf restraints to keep fragile, expensive, or dangerous stored items in place.
• Arrange storage to keep heavy objects on low shelves and avoid overhead storage.
• Keep tools for gas shut-off as recommended by your local gas company.
• Provide first aid and CPR training to key staff.
• Follow your insurer's advice about documenting your contents before an event and documenting damage while it's fresh.
• Purchase a small back-up generator and fuel (both of which must be safely stored and braced to resist earthquakes).
• Consult with an engineer about your potential earthquake risks in general.

Over $500

• Retain an engineer or other professional to assess and quantify your risks related to your building's structure and nonstructural components.
• Provide first aid and CPR training to all staff.
• Send safety and key emergency response employees for specialized training.
• Purchase additional insurance (business interruption, loss of income, etc.).
• Retain a professional to develop a business continuity plan. * Replace or mitigate risky nonstructural components.
• Mitigate risky structural conditions.
• Relocate critical functions or inventory away from risky conditions that can not be effectively mitigated.
• Back up records and other data off site per your business continuity plan.

A benefit-cost ratio is difficult to calculate for mitigation work because the benefits are not immediately apparent. Rather, the "benefit" is really the value of repair, replacement, and recovery efforts avoided. However, a recent study by the Multihazard Mitigation Council shows, on average, four dollars in expected savings for every dollar invested in mitigation.

Certainly we know this much: In large earthquakes some buildings are damaged while others are not, and the owners of the damaged buildings routinely wish they had taken steps in advance to limit their losses.

Mitigation by businesses also:

• Creates safer communities by eliminating identifiable hazards.
• Helps emergency responders by allowing them to focus on fewer remaining hazards.
• Lessens the financial impact on the community as a whole.
• Enables the community to recover faster from an earthquake emergency.

If you lease space for your business, you will probably need to coordinate closely with your landlord to assess any risks posed by your building's structure or nonstructural components. You will certainly need to coordinate before undertaking any mitigation for those items.

Talk to your landlord. Very likely he or she has past reports or renovation records that describe the building. You or your consultant can review these to get a sense of your risk.

As a tenant, your risk is also related to your ability to make repairs or move to alternate space after a damaging event. Review your lease carefully to understand what it says about your ability to use your space if it becomes unsafe due to damage or can not be occupied while it is being repaired. Who is responsible for repair costs, and at whose discretion they will be done, are other important questions your lease should address.

A study funded by the Public Entity Risk Institute notes that "firms that operate in leased space with inadequate lease provisions concerning who repairs earthquake damage and how quickly it will be done will find themselves in trouble. In Northridge, many business owners found themselves stuck in buildings that were not repaired for a long time by virtue of a lease that kept them from moving to another location where they could resume business." (Alesch and others, 2001, cited by the Association of Bay Area Governments web site)

Many of QuakeSmart's recommendations are of the do-it-yourself variety. Even in a large building, contents and furnishings, as well as some of the assessment and planning tasks, can be handled without special expertise. By the same token, even in a small building, some issues (such as structural analysis, plumbing, etc.) should only be addressed by qualified professionals.

You do not need any consultants to get started thinking about your risk or making a plan to mitigate it. At one large research and development facility, for example, all the light fixtures have been thoroughly upgraded for earthquakes over a few years, thanks mostly to the efforts of one electrician. Nevertheless, if your organization does not have individuals qualified to work with the building components in question, you will likely need to hire one or more consultants.

Many of the designations below correspond both to a specialized field of study or practice and to a category of state license. Not all practicing design professionals are licensed. If building permits are required for the anticipated work, it may be important to determine if the consultant has an appropriate license in your state.

Two individuals with the same license might have very different experience. Not every design and construction professional works with existing buildings, for example, or with nonstructural component bracing, or even with earthquake design.

Earthquake Engineer This is a commonly used term, but no state has such a license category. A so-called earthquake engineer is usually a structural or civil engineer experienced in earthquake analysis and design.

Structural Engineer A structural engineer is a civil engineer with an additional license based on specific work experience and examinations. Not all states issue a separate license for structural engineers. California, as an example, requires its schools, hospitals, and some high-rise structures to be designed by licensed structural engineers.

Civil Engineer A civil engineer may be licensed by the state. Some civil engineers specialize in buildings and structures, while others might work with bridges, dams, roads, excavations, or other concerns less related to typical business facilities.

Mechanical Engineer A mechanical engineer may be licensed by the state. Some mechanical engineers work with building systems, while others work in wholly unrelated fields. Those who specialize in the design of building systems are often familiar with the types of nonstructural components in question here, but they typically rely on civil or structural engineers for design of earthquake bracing or mitigation.

Architect An architect may be licensed by the state. Since architects must be knowledgeable about many aspects of building design and construction, generally only a small part of their education, work experience, and examinations is devoted to structural engineering. Even architects licensed in California generally do not perform seismic calculations or make structural detailing decisions but instead rely on engineers. Architects, not engineers, are generally responsible for the design of windows, partitions, ceilings, and many other nonstructural items. It is important, therefore, for the architect to be made aware of the client's concerns regarding protection from earthquake damage, since the architect will design and provide specifications for many of the nonstructural components.

Interior Designer An interior designer or space planner would not be expected to have any particular background in earthquake engineering, though in some cases this designer will select file cabinets, furniture, finish materials, and so on. Designs by interior designers can be reviewed by a qualified engineer to ensure appropriate detailing for earthquake resistance.

Specialty Contractor Contractors in various specialties, as well as general contractors, may be licensed by the state. Contractors can implement mitigation solutions designed by others or may be able to help devise the mitigation if no formal engineering is required. For example, contractors experienced in the installation of new suspended ceilings in accordance with current earthquake code provisions may be capable of installing seismic upgrade details for older, unbraced ceilings. Individuals skilled in the building trades can bring special talents to bear if they are made aware of seismic problems and solutions.

1. Use free communication networks: newsletters, website headers, reader boards, shopping bags, and bill stuffers in monthly bills.
2. Distribute press releases and public service announcements (PSAs) with earthquake emergency information for the public.
3. Conduct earthquake drills in the work place.
4. Hold an earthquake mitigation (risk reduction) workshop for small businesses.
5. Recruit local retailers to display information about earthquakes and mitigation. Encourage sales events and promotions with earthquake mitigation themes.
6. Place corporate-sponsored advertising in local newspapers in support of earthquake mitigation and emergency planning for businesses.
7. Work together with your community to upgrade building codes, adopt retrofitting programs, and implement emergency planning.
8. Survey area businesses and estimate the costs of expected earthquake damage and the costs of mitigation. Present the findings to these businesses.
9. Provide employees with information about how to prepare themselves and their families for earthquakes and how to do mitigation at home.
10. Look for presentation opportunities to reach audiences with related interests, such as home improvement, real estate development, investing, or historic preservation.
11. Contact local media outlets to recommend programming about earthquake risks and mitigation and to offer expert speakers or guests.
12. Design a recognition contest, awards, or designation for businesses that take steps to reduce earthquake hazards through mitigation.
13. Ask officials to designate an Earthquake Awareness Day or Week.
14. Post your accomplishments and initiatives, as a business community, on the Chamber web site so others, including prospective community investors, know what your group is doing to protect local business and build a sustainable community.
15. Place brochures and other information on public bulletin boards.
16. Recruit a local TV personality to make a “how to” video for businesses.
17. Prepare or recommend a package of mitigation kits for sale.
18. Create a partnership with a local college to involve students and undertake studies of local risk or to promote mitigation programs. Earthquake preparedness is relevant to students of engineering, architecture, planning, business, government, law, etc.
19. Link websites of local governments or interest groups to QuakeSmart.org.
20. Contact representatives of local utilities (gas, electricity, water) to learn and publicize their recommendations for earthquake mitigation, especially regarding gas shut-off valves.

The magnitude 6.8 Nisqually Earthquake struck western Washington on Wednesday morning, February 28, 2001, at 10:58 AM. The quake was centered beneath Puget Sound off the Nisqually Delta, thirty-five miles beneath the earth's surface.

Businesses interviewed for this document ranged from one person-businesses to large national companies, from SW Washington to British Columbia. Between 250 and 300 businesses were invited to participate. To encourage participation, no questionnaires were presented and interviews were short. Most were done via email, some visits, and a few by telephone. All were promised confidentiality, and told their responses would be used to help their fellow businessmen. They were asked "about their experiences, e.g., what worked, what didn't work, what broke or fell over, what surprised you, etc.

The Cascadia Region Earthquake Workgroup (CREW), Federal Emergency Management Agency (FEMA), and the University Washington's Geophysics department contributed to this article and information.

Executive summary:

1. SEISMIC RESTRAINTS PAID OFF: Inexpensive earthquake straps and quake mats saved a lot of equipment and downtime. Seismic retrofits were proven sucessful in several companies. Those who had retrofitted (or built to seismic specifications) couldn't stop talking about how well it paid off.
2. CEILING GRIDS AND LIGHT FIXTURES: Many suspended ceilings and light fixtures that weren't seismically restrained dropped, endangering people and compromising sprinkler systems.
3. SHELVING SECURING & BRACING: Freestanding shelving should be secured to the wall and/or floor. Tall shelving, as in warehouses and warehouse clubs, should be secured to the floor and braced from the top.
4. DON'T GET RED TAGGED NEEDLESSLY! Simple nonstructural hazards could red tag a building, even if no significant structural damage occurred.  This could cause unnecessary downtime.
5. DISASTER/CONTINGENCY PLANS: Simple is better! A hospital supervisor said it best, "our disaster script needs to be rewritten with the highlights on ONE page at the beginning of the plan - we missed the highlights and got lost in the huge volume of words in the plan!"
6. EARTHQUAKE TRAINING: Trained employees immediately dropped under desks or tables and hung on ("Drop, Cover & Hold"). They emerged uninjured and ready to help after the quaking stopped.
7. EMERGENCY DRILLS: Whether fire drills, evacuation drills, or disaster testing... practice, practice, practice.  When a disaster hits, many people go into "shock," so knowing where to go/what to do has to be automatic. Heard from companies many times, "you can not practice too often!" To be effective, drills must be a mandate of management, and management must participate.
8. EXPECTATIONS: Fright and panic are reduced when employees know what to expect. Document what you learned during this quake to advise future employees of things like: how long to expect your building to sway after the shaking stops, what they might expect to hear (creaks, rumbles), how elevators might behave, and what it might be like getting home.
9. TELEPHONE SYSTEM QUICKLY BECAME OVERLOADED: Save this resource for emergency calls only for the first 90 minutes after any major event. This means:
   a) don't use the phone unless you have an emergency,
   b) don't call 911 to ask "was that an earthquake we just had?"
   c) hang up any phones that may have shaken off the hook.
10. FAMILY NOTIFICATION: Your employees need to let their families know they are okay, but ask them to wait 90 minutes before calling to accommodate emergency calls. Encourage them to arrange an out-of-state contact for family to call to say they're okay.
11. PLACEMENT OF BUSINESS CONTINUITY RESPONSIBILITY: Some businesses shared that they've moved their Business Continuity function to report very high up in the management chain. This is where it belongs, because it needs senior management clout, and it supports the survival of the entire business. Any Contingency Planner or Business Continuity professional who reports several management layers down will confirm their efforts to be "futile." Their existence may satisfy a regulation of having a contingency plan, but it's unlikely the plan will be understood, tested, or effective.

To Read More: See the entire article on this subject including some 100 testimonials from companies detailed by category: Office Space; Retail Space; Warehouse/Factory/Docks; Employees; Evacuation issues; Computer/Networks/Servers; Communications; as well as a listing of Lessons Learned from the SBA (U.S. Small Business Administration); please visit: 
http://www.crew.org/papers/nisquallylessons.html
or the Cascadia Region Earthquake Workgroup and their article, What Businesses Learned from the Nisqually Earthquake