Columns Newswire Management

The 2024 Winter Season: Real Estate Industry Preparedness & Protection

While still dealing with loss of rent and other pandemic-related challenges, this winter may bring an additional layer of unwelcomed obstacles and losses for the real estate industry. The best risk management practice for real estate owners and property managers to reduce costly accidents on their property caused by inclement weather is by taking proactive steps to control or eliminate losses from slips and falls and other incidents on the premises.

Plan Now for Later
Boilers and roofs should be inspected for potential defects and leaks at least annually, preferably just before the winter season and again after a major storm. To prevent frozen pipes, keep thermostats at 55°F or higher, even in vacant areas. Flowing water often breaks up ice below freezing. When outside temperatures remain below freezing, it’s less expensive to run your faucet regularly than to repair a frozen or burst pipe later.

Snow loading on a roof can cause deflection and sagging of the roof structure, damage and, in some cases, roof collapse. Ice damming, or the buildup of ice on the eave and soffit area of a roof, can cause chunks to break off and fall, or when melting, can cause water to seep into the building through the roof system. Depending on the amount of snowfall or other winter conditions, put preventive measures in place. These can include pre-arranged snow removal for heavy accumulations, and rakes on sloped roofs to reduce the likelihood of snow/ice from falling off and damaging property or injuring personnel. Block off access under areas where potentially dangerous situations exist.

Backup the backup power. A generator will only work if it has been maintained properly. Make sure you store the appropriate amount of fuel required for backup power to function as needed.

As we recently witnessed with the tragic deadly fire in the Bronx, portable heaters create a huge risk in the winter months; it’s vital to practice proper safety measures. The National Fire Protection Association (NFPA) reports that space heaters — whether portable or stationary — account for as much as a third of heating fires each year. Have a conversation about proper placement and care for the heater in the office and provide material to tenants on these safety measures in lease agreements and also throughout the building.

Have an official winter advisory plan that specifies when early dismissal or office closure is appropriate and, should the need arise, who will make the call and how the information will be disseminated to staff.

Understand Your Insurance Coverage
Commercial property and casualty insurance policies almost always include “direct loss” insurance. In insurance policy language, “direct losses” refer to any damage immediately inflicted by a winter disaster, accident or other event, known in insurance language as “perils.” If a blizzard damages a roof, a direct loss will include damage to the structure, as well as to equipment, furniture, inventory or other items inside that could have been damaged as a result. Fire and smoke damage would count as a direct loss. However, oftentimes, “indirect losses” can be more damaging to a company, such as losing several months’ worth of income as a result of physical damage caused by a weather-related event.

This is why it’s critical to review insurance policies to under- stand whether they include indirect loss insurance and, if not, to secure business interruption and additional types of necessary insurance coverage for your business. These include following contingent business income coverage, which can help bridge gaps if a supplier is impacted by a storm; flood coverage and cyber liability coverage, as cyberattacks are known to increase after a storm.

Frank DeLucia
Senior Vice President
Hub International Northeast
frank.delucia@hubinternational.com
(212)338-2395