Documenting Conditions

Surrounding Storms and

Catastrophic Events
 Presenters

Kris Lengieza Kristi Vick Todd Gillman Miriam Colen

Dir. of Business Managing Principal, Director, Claims Project Manager,
Development, Multivista South Preparation Practice, Suffolk
Marketplace, Florida AON
Procore

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 Kris Lengieza

+ Director of Business Development, Marketplace,

Procore

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construction.
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Kristi Vick - Multivista

+ Managing Principal – South Florida

+ Multivista, part of Hexagon, has been contracted on over
2.5 billion square feet of construction projects valued at
over $300 billion worldwide, and is trusted by the
industry’s leading companies to mitigate risk, create
efficiencies, and deliver a higher level of project insight.

+ The company offers a full suite of visual construction

documentation services with local boots-on-the-ground
support in over 75 international markets.

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Best Practices:

Visual
Documentation
for Disaster
Preparedness

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The Impact is Undeniable

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Who Should Document?
+ Active projects and facilities in the
path of an eminent storm

+ Active projects and facilities in areas

vulnerable to hurricanes, tornados,
flooding, and mudslides

+ Monthly/Quarterly as-built
progressions for active construction
projects, regardless of location

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What Should Be
Captured?

Time & Date-Stamped Before

and After Images:

+ Roof
+ Exterior Elevations
+ Building Envelope
+ Site - Materials, Equipment,
Staging
+ Interior Condition
+ Environmental Barriers

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Why Capture Your Asset Ahead of a Disaster?

ASSESS SUBSTANTIATE INVENTORY REBUILD

Compare precise Include visual Capture a digital Expedite recovery,
before and after documentation to inventory of assets, remediation, and
imagery to assess substantiate fixtures, and reconstruction efforts
damage insurance or FEMA- equipment using as-built visual
related claims records

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 The Right Tool for the Storm

Photo UAV / Drone Webcam 3D Immersive

Inspection-Grade, Aerial Perspectives Real-Time Remote Virtual Walkthrough
Date, Time, & for Roofs and 3+ Viewing, Storm and Point Cloud
Location Indexed Story Buildings Vandal Rated Accuracy
Photos Durability

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 Todd Gillman
+ Director, Claims Preparation Practice,
AON Global Risk Consulting
+ Manages a team of CPAs, engineers, loss
accountants and other claims specialists.
This team focuses on the preparation of
property damage, business interruption,
cyber, builder’s risk, extra expense,
product recall and crime claims.
+ Over 20 years of experience in the
insurance industry, specific to loss
accounting.

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 Exposure Valuation:
Tools and Methodologies to Quantify Worst-Case Loss Scenarios
 Summary
After a loss occurs is the worst time to test the adequacy of insurance
limits and sub-limits.
OR
“Everyone has a plan until they get punched in the mouth”
+ Experience shows that while construction values may be adequately understood and quantified,
potential consequential damages including delay, soft costs, extra and expediting expenses, and
indirect costs may be uninsured or underinsured.
+ Alternatively, without sound pre-loss analysis, contractors may be buying higher limits unnecessarily.
+ Quantifying worst-case exposures before placing coverage creates a more efficient and reliable
insurance program.
+ The next several slides will explore tools and methodologies available to help contractors accurately
quantify insurable builders risk values and exposures, and the invaluable returns derived from these
important analytics.

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Extensions of Coverage
+ Architects and Engineers Fees
+ Expediting Expense
+ Extra Expense
+ Debris Removal Coverage
+ Emergency Property Protection
Expense
+ Claims Preparation Costs
+ Ordinance or Law / Demolition &
Increased Cost of Construction
+ Delay In Completion

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Comparison of Expediting and Extra Expense Wording
Expediting
Any reasonable wages for overtime, night work,
and work on public holidays and extra costs of
express freight or other rapid means of
transportation which are necessary to make
temporary repairs and to expedite the
permanent repair or replacement of the Covered
Property when damaged by a peril insured, but
only to the extent such is necessary to continue
as nearly as practicable the normal operation
of the work in progress.
Source: Master Builders Risk Manuscript Policy Form
Extra Expenses
The reasonable and necessary excess costs
incurred during the period of restoration or repair of
the damaged property that are over and above the
total costs that would normally have been
incurred during the same period of time had no
loss or damage occurred for the purpose of
continuing as nearly as practicable the
scheduled progress of undamaged work. Extra
expense shall include equipment rental, emergency
expenses, temporary use of property,
demobilization and remobilization of equipment and
facilities, and other expenses necessarily
incurred to reduce loss. (Delay is excluded.)
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 Delay in Completion Wording
The Company shall indemnify the Named Insured for scheduled Loss of
RENTAL INCOME, Loss of GROSS EARNINGS, ADDITIONAL
INTEREST/FINANCING EXPENSES, and/or SOFT COSTS/ADDITIONAL
EXPENSES arising out of the resulting DELAY in completion of the project
described in the Project Certificate on an actual loss sustained basis.
The Company shall also indemnify the Named Insured for reasonable
expenditures that are necessarily incurred for the purpose of reducing any
loss amount under this extension, but only to the extent that such loss
amount otherwise payable under this coverage is actually reduced.

Available coverage seems comprehensive and potentially duplicative.

One strategy would be to avoid disputes by purchasing at least some amount
of each offering.

Source: Master Builders Risk Manuscript Policy Form

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Definition of Soft Costs/Additional Expenses
+ Legal/Accounting Fees: Additional legal work incurred to revise contracts or other
documents; additional accounting work to renew or restructure financing;
+ Design Professionals Fees: Services provided by Architects, Engineers and other
Design Professionals;
+ Realty Taxes/Ground Rents: Additional realty taxes, ground rents or other assessments
actually incurred;
+ Insurance Premiums: Additional insurance premiums for extending or renewing
coverage;
+ Project Administration Expense / General Overhead: Additional project administration
expense such as temporary office space, additional clerical expense and other similar
expenses;
+ Advertising/Marketing Expense: Additional advertising and promotional expenses;
+ Leasing/Commission Expense: Additional costs of renegotiating and pre-leasing of the
project, including costs of additional commissions incurred upon renegotiating leases;
+ Other Expenses, as accepted by the Company and specifically described

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 Common Variables for Pre-Loss Exposure
Quantification
Time Period
+ Tied to scope and impact of potential damage
> Could include lead times for critical components or materials
+ Maximum foreseeable delay
+ Probable maximum delay
> Takes into account mitigation
+ Net expected delay
> Most likely outcome given probability of occurrence
Rate of Daily Loss – Project-Wide
+ Project specific elements
+ Ongoing overhead/general conditions including sub-contractors
+ Financing and insurance costs
+ Profit upon completion (or corresponding LD’s)
True Extra Costs – Expediting and Above Normal
Claims Costs

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 Estimating Maximum Foreseeable Delay
Maximum Foreseeable Delay - Project XYZ
Fire Including Destruction of Mechanicals in Place
Division Start End Days Apr May Jun Jul Aug Sep
Cleanup and Debris Removal 4/10 4/30 20
Concrete 5/1 5/31 30
Masonry 5/15 6/15 31
Metals 5/1 6/15 45
Wood and Plastics 4/10 6/30 81
Waterproofing 5/31 7/31 61
Doors Frames & Hardware 4/10 6/30 81
Drywall & Ceilings 4/10 6/30 81
Specialties 5/1 6/30 60
Elevators & Escalators 4/10 8/31 143
Mechanical and Plumbing 4/10 6/30 81
Electrical 4/10 9/15 158
Notes: Each project requires unique analysis and approach due to design and other factors.
Objective is to identify the worst case from a time perspective.

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Maximum Foreseeable Financial Exposure
Maximum Foreseeable Financial Exposure Given 180-Day Delay
Days Cost Soft Claims
Delay per Day Total Expediting Extra Costs Costs Delay
Premiums to Reduce Equipment
Lead Time n/a Fixed $5,000,000 $5,000,000
Overtime 180 $15,000 $2,700,000 $2,700,000
Equipment Rental 180 $25,000 $4,500,000 $4,500,000
General Conditions 180 $10,000 $1,800,000 $1,800,000
Sub-Contractor General
Conditions 180 $8,000 $1,440,000 $1,440,000
Program and Construction
Management 180 $5,000 $900,000 $900,000
Monitoring Costs 180 $4,000 $720,000 $720,000
Security Costs 180 $4,000 $720,000 $720,000
Engineering Support 180 $6,000 $1,080,000 $1,080,000
Temporary Utilities - Electric,
Heat, Water 180 $2,000 $360,000 $360,000
Financing 180 $7,500 $1,350,000 $1,350,000
Insurance 180 $12,500 $2,250,000 $2,250,000
Claims Preparation 180 $2,000 $360,000 $360,000
Damages Assessment 180 $4,000 $720,000 $720,000
Liquidated Damages 180 $10,000 $1,800,000 $1,800,000
Total $25,700,000 $7,700,000 $11,520,000 $3,600,000 $1,080,000 $1,800,000
Notes:
Use actual or contracted expenditures as guideposts; actual costs should be somewhat less due to learning curve.
Objective is to identify the worst financial case. Based on direct repair costs of $50,000,000, total consequential
loss exceeds 50% -- material 31
 Building an Exposure Value Map
Based on Period of Delay

$25 $3. $1.

.7M 45 15
Tot M M
al Tot Tot
al al

Based on risk appetite and other factors, limits could be established as follows:

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$33.5M Total
 Employee Safety During the Storm
Remind employees to budget extra time for tasks
• Rushing on wet roadways can result in car accidents
• Working in wet/muddy conditions can take longer and increase risk of slips/falls
Avoid electrical shock
• Use power tools that are rated for outdoor use
• Check electrical cords/equipment daily to remove faulty equipment
• Use GFCIs
• Avoid cords laying in standing water
• Use approved spider boxes for temporary power
Working and walking surfaces can be wet/muddy
• Muck out areas of high travel
• Wear appropriate footwear
• Use gravel, sand, fabric, etc. in high traffic areas/entry routes
• Ladders, stairs, and ramps should be regularly cleaned off to prevent overly slippery surfaces
Visibility
• Don’t allow jackets, sweatshirts, etc. to obscure high visibility clothing
• Employ adequate lighting for employees to see work areas and egress routes
• Insure employees have appropriate eye protection
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 Preparing your Jobsite
Store materials in appropriate areas to avoid
exposure to the elements
• Protect your laydown area against
oversaturation
• Move materials inside where feasible
Ensure that SWPP protocols are set up correctly
and being maintained
• Prepare cover for fuel storage, waste
containment, and spoils
• Designated personnel are involved
Identify openings (roof, window, elevator shafts,
etc.)
• Emplace and secure covers to prevent
elemental intrusion
Emplace appropriate dewatering, wash stations,
and road cleaning resources
Soil becomes saturated
• Consider soil amendments
• Excavating, and associated underground work
is delayed/stopped
• Slurry to allow for quicker demucking
• Be aware of weather patterns to identify times
for excavating
Production will be delayed
• Rain days may be exceed contract allotment
Costs will increase
• Pumping water offsite
• Delays
• Harder to accomplish outdoor work
• More sick days

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 Dealing with the Elements
Make a checklist for pre and post weather events that identifies areas of potential loss
• Do this before the event, when you have time to be thorough

Be aware of weather conditions

• Error on the side of caution

Do a walkthrough
Before the storm event
• Correct deficiencies
After storm event
• Initiate and document corrective actions
• Quickly alert specialty contractors (if needed)

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Builder’s Risk Claims Tips
Key Concerns and
Needs Following Loss
+ Make sure that claims-related accounting
systems are in place and functioning
+ Prepare a preliminary estimate of loss for
planning, reserve, and advance purposes
+ Prepare comprehensive reports of claimed
losses including:
+ Schedules summarizing hard and soft
cost losses
+ Detailed analysis of loss elements
including delay
+ Supporting documentation including
invoices, financial documents, etc.
+ Closely monitor and manage adjustment
activities including claim audit
+ Encourage team performance including internal
and external participants
+ Continuous attention until final settlement is
achieved
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Issues Associated with Builder’s Risk Claims
Insurers View
Scope Insurers focus heavily on historical
or pre-loss documentation regarding
project status, cost overages, timing,
known issues, etc.
Parties Involved Insurers and consultants will want
“unfettered access” with as many
“touch points” as possible including
engineers, schedulers, contractors,
sub-contractors, project managers,
accountants, etc.
Documentation Insurers and their consultants prefer
to obtain their data from the source
but historically do not share among
themselves
Issues
Historical data may not tell entire story as
straight line trending or averages may not
represent reality. Documentation should be
supplemented with narrative, updates or other
information to arrive at actual projections.
One individual or organization may not have
the entire set of data and their statements may
lead to flawed analysis by insurers who rely on
“unofficial” comments.
Insurers and their consultants often ask for the
same information multiple times, causing
confusion and inefficiencies.
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Issues Associated with Builder’s Risk Claims
Insurers View
Request for No issue is too small because
Information they do not know the dollar
magnitude of the issue until they
investigate.
Asked and Various parties ask the same
Answered question in different ways
according to their perspective.
Time on the Claim Insurers view of a claim is
or with Insurers is documentation and information
Time Away from intensive that needs to be
the Project completed to facilitate payment.
Issues
Significant amount of time and effort can
be expended on relatively small issues.
Not every request is reasonable, and not
every request requires a response.
Accountants request information for
accounting purposes. Engineers ask for
same information from an engineering
standpoint. Multiple bites on the same
apple.
Insurers are not focused on the Project as
much as they are on their portion (the loss)
of the project. Different goals lead to
different agendas.
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 Communication Overload
Architect/ Restoration
Coordination with Roofing Engineerin Contractor Industrial
Hygienist
multiple parties: Consultant g
Building
+ Can be confusing Contractor
+ Set protocols Loss
Adjusters
Owner/Risk Insurance

Staff Manager Company

Normal
CEO/Board
Operations

Other 3rd
Parties
Media
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Value of Aon Claim
Preparation
and Valuation Services
+ Our fees are usually covered by your insurance policy
+ Minimize the length of time between initial claim and
final settlement
+ Keep effective communication open between all
parties
+ Provide a well organized and complete claim the first
time
+ Provide a narrative describing the damages, the
causes of the damages and when the damages
occurred
+ Show each element of the claim with appropriate
tables and all supporting documentation
+ Include all elements of the claim, but do not overstate
the claim
+ Provide all necessary schedule analyses to support a
claim for delay damages

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Miriam Colen

+ Project Manager, LEED AP BD+C

+ Suffolk Construction is a general building contracting

company that provides pre-construction, construction
management, general contracting and design-build
services nationwide.

+ Construction projects include both new construction and

renovations in the hospitality, education, residential,
healthcare, assisted living, public works, entertainment,
retail and commercial market sectors.

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Best Practices for Project Safety Initiatives
 Hurricane Preparedness Plan

Notification Execution Documentation

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Lessons Learned
+ MAKE YOUR PLAN SPECIFIC

+ PROTECT EQUIPMENT – Consider these

questions:
○ Where is the equipment stored?
○ Where is your staging area?
○ At any one time, how much equipment
will be on that staging area ,and what
is the value of that equipment?
○ Are you protecting the equipment as
well as you can?

+ KNOW WHERE TO SET UP PROJECT

TRAILERS

+ RETURNING TO THE WORK SITE

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Q+A
THANK YOU!