With the remembrance of the events of Sept. 11, building and site security has become an increasingly important issue to companies all over the nation and the world. Nowadays, it is simply not prudent to be lax on security, especially in high-profile areas or buildings evidently prone to acts of terrorism or other types of criminal activity.
Whether already in an existing site or about to break ground on a brand-new site, companies and insurance agents are becoming well aware of the new level of risks securing buildings has posed and how these risks will affect rates.
There are several factors to take into consideration for those looking to build from the ground up on a new site, whether it is in an urban, suburban, or rural setting. “Nowadays with insurance costs and the threat of terrorism, and the increase in losses from weather-related events, the customers or the insureds need to look a little bit closer at the risk of selecting a specific site,” said Victor Sordillo, vice president at Chubb & Son, and global technical services manager for loss control services, Chubb Commercial Insurance. Sordillo offered these tips for determining the risks associated with securing a site:
First off, evaluate the site for its’ proneness to natural catastrophes such as hurricanes, floods, tornados, windstorms and earthquakes. “You can check the flood maps, and that certainly will give you an indication, but it’s not the only thing you need to look at,” said Sordillo. “You need to look at worst-case scenarios. What building is going around you? How much change in the topography has occurred that might result in increased flooding?”
Secondly, evaluate the availability of water for firefighting purposes. “Many sites have limited water supply,” added Sordillo. “Sometimes you have to provide your own water supply. You might have to put a tank in, or draw water from a well if you don’t have enough supply from the municipality of the water district. If you have to do that, it’s going to certainly affect your rate. Because if you don’t have the water to fight fires, and you can’t bring it in, ou’re really an unprotected risk.”
Further assess the availability of emergency personnel in the area—firefighters, policemen, and emergency medical technicians. “Are they adequately trained and equipped? That’s something that people overlooked until Sept. 11, and it has gained significantly more importance,” said Sordillo.
“Choose a site that’s not a high crime area,” added Sordillo. “Certainly if you have an attractive commodity, crime could be a problem. You also want to protect your employees, and if you have an operation that certainly terrorists might consider as a target… you want to be located such that you are not an obvious target.” Sordillo suggests choosing a location that cannot be easily seen-especially from a highway. “Contrary to that, you don’t want to be so isolated, that when authorities ride by, or people pass by, they can’t see your facility.”
Finally, take a look at your neighbors. “If you’re not a target, what about your neighbors?” asked Sordillo. “Are they going to be a target? How would that affect you? Do you have great enough distance that a loss at the facility next to you won’t affect your operation?”
James Titterton, assistant vice president at Chubb & Son, and loss control practice leader at Chubb Commercial Insurance in New York, offers this suggestion: “Acknowledge the fact that something will go wrong from a security standpoint. Determine what could go wrong with probable scenarios.” Titterton said that once the possible scenarios have been determined, the security risks can be evaluated from a control standpoint. This applies to both new and existing sites.
An ideal site would be one “where the property line is clearly defined and can be supported with control,” said Titterton. “What I mean by that is we know where our property starts and we can control egress and control access as much as we can.” Urban settings provide more control from a perimeter standpoint, as fencing and gates can easily be constructed to enhance security. Urban settings, however, oftentimes are side-by-side with neighboring facilities, with little opportunity to be in command of boundaries.
“I think that if you’re in an urban setting, your control points are potentially much closer to your actual space than it would a rural setting,” said Titterton. “In other words, you can set up a fence and a guard post and control that point as much as you possibly can, but if you’re in an alternate environment, you could have the person coming up to your front door and into your reception area before you can detect the problem. That is a noticeable difference.”
“Access control is probably the most important thing at this point in time,” added Sordillo. “You make sure that the people who are in your facility… are supposed to be there, and that they have access only limited to the areas that are important to accomplish their visit. We’re seeing a significant investment in most companies towards access control. Also what you’re seeing is they’re controlling access of employees within the facilitates themselves. Employee selection and background checks are also becoming an increased part of companies’ internal control.”
“To a certain degree, security is a product of your environment,” added Titterton. “You’re dealt a hand that you have to play with…. Alarm systems, for the most part, are passive controls. They’ll alert somebody that something’s going wrong, but as far as active control, police response, or authorized individual response, that’s probably what you’re ultimately looking for—some sort of intervention.”
Wherever a site may be, each has its own set of advantages and disadvantages. Conditions such as fire protection and the possibility of natural catastrophes exist in any setting, according to Sordillo. “You have to balance those with the benefits from choosing a specific location,” he said. “For example, being a downtown facility in New York City certainly has significant advantages from being able to reach your customers, your suppliers, and the information community, such as Wall Street and the financial district. So you have to weigh those with any hazards associated with being in a high-rise building, or being next to a government facility that might be a target.
“I believe that the operators of these facilities have significantly increased their diligence and mentality toward protecting their tenants,” added Sordillo.
“The less losses everybody has, the better,” said Titterton. “That works on a couple of different angles, but it does work on the security angle as well. Not only from an insurance standpoint, but also from giving the workforce some degree of confidence that this is a fairly safe place to work, all things considered.”
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