Coronavirus: Business owners preparing for changes in operations – loss prevention measures

A hotel is asked to lease its premises for the operation of a temporary medical facility to actively treat Covid-19 patients. A warehouse is asked to lease its premises to another organization to make temporary use of their facilities for the purpose of convalescing patients.  A paper packaging company is required to manufacture protective face masks for medical staff. A gin manufacturer agrees to change distilling operations to produce much-needed hand sanitizer lotion.

The coronavirus outbreak means that many companies have been requested, or are actively seeking, to change the occupancy at a premises to meet current market demand or to support community needs – even large automobile manufacturers are switching production in order to produce parts for crucial respirators. Although such changes are necessary and to be highly commended, this can also result in new risk exposures to a location that may have not been previously considered or evaluated, according to a new risk bulletin from Allianz Global Corporate & Specialty (AGCS)’ Allianz Risk Consulting  unit.

“When facilities or operations are changed, especially under temporary or hurried conditions, the risk of damages from hazards such as fires, inadequate maintenance of new equipment or incorrect storage of combustible liquids and materials can increase,” says Scott Steinmetz, Global Head of MidCorp ARC at AGCS. “Changes in operations and property use can also represent a material change in risk and may require reconsideration of controls and protection.”

For example, in the case of the hotel leasing its premises for the operation of a temporary medical facility to treat Covid-19 patients, this scenario could likely involve temporary storage and use of medical gases and compressed oxygen cylinders on the premises, which would introduce potential new risks and hazards.

In the case of the warehouse making temporary use of its facilities for convalescing patients, risk considerations associated with such as change in operations could include, among others, responsibility for ongoing maintenance and cleaning of restroom facilities; responsibility for maintaining and monitoring all fire protection and life safety systems; responsibility for emergency response coordination; and responsibility for cleaning and disinfecting facility premises upon completion of temporary operations. Such considerations need to be adequately addressed.

Outside of these scenarios other potential changes to risk profiles include surge protection on critical or sensitive equipment/electronics; electrical load changes from new/different equipment exceeding existing load requirements; equipment susceptible to water/moisture intrusion; increased volumes or variety of flammable liquids storage; storage of medical supplies and other cloth materials in suitable racks.