AU 61 (part 2)

o A fire safety program will address protection of pressure vessels

Place in fire division away from combustible materials/ignition sources Use steam-jacketed vessels instead of fire vessels Most losses are preventable through regular maintenance and inspection

• Vandalism risk control measures that will lessen frequency and severity of vandalism losses

Premise security (alarms and window bars), exterior lighting & security cameras

INSTITUTIONAL: Plumbing How can we prevent abuse and vandalism of plumbing systems?

Preventing is difficult and requires constant monitoring and education of the institutional population Toilet and sink overflow and plugged drains result in water damage; schools susceptible to vandalism

materials other than wood can be used without changing the classification (frame)

-brick or stone veneer -metal clad - asbestos clas -stucco -concrete block walls

• Fuel load (fuel that is readily available to a fire)

1) Construction 2) Personal property 3) waste and trash 4) Dust and lint 5) Heat and power

INSTITUTIONAL: 1) Ignition Sources

1) Cooking equipment 2) Malfunctioning electrical equipment 3) Faulty wiring 4) Smoking 5) Theatrical lightning (for schools used in auditoriums)

NFPA

1) Flame spread - NFPA #255 ( Determined using a test tunnel prescribed by NFPA Standard No. 255) 2) Habitational - Ignition: Ensure that electrical wiring is maintained and inspected - should be sufficient to handle a heavy electrical load & adhere to NFPA 70 National Electrical Code 3) Institutional - Ignition: o Malfunctioning electrical equipment and faulty wiring are 2 other common sources: Investigate age, type, and condition and if it complies with NFPA 70 4) Welding - NFPA 51B 5) Fuel Load: Many mercantile occupancies contain cooking facilities - grease buildup is a frequent cause of kitchen fires: Consider whether in compliance with NFPA 96 6) Combustible dust: NFPA 654 (prevention of fire and dust explosions) 7) Flammable liquids: Should be stored in metal and conform to NFPA 30 8) Chemical Hazards: • NFPA 704 - identification of fire hazards and materials 9) Principal UW consideration (portable fire extinguishers): used and maintained correctly; NFPA 10 outlines requirements for selection, placement, inspection, and maintenance 10) NFPA 25 specifications ensure a system remains operational; should be inspected at least annually and some after each use 11) According to NFPA 30, liquids with a flash point below 100°F are Class I, flammable liquids; Class II, combustible liquids, have higher flash points

o Three primary means of predicting catastrophic wildfire losses

1) Fuel sources 2) slope of land 3) road access o Geographic Information System (GIS) used to highlight these 3 factors in a given area, indicating greatest risk for wildfires

The use of oxygen and gases, as in a hospital, is a serious hazard. All of the following statements regarding this hazard are true

1) Gases used for anesthesia constitute an explosive mixture. 2) Oxygen and cylinders containing anesthetics should be stored in a well-ventilated area. 3) The sealed atmosphere of a hospital operating room gives it all the characteristics of a bomb.

First factors to consider:

1) Geographic location 2) Susceptibility to lightning (first consideration - the ones below are considered regardless of location) o Nature of building and contents o Relative exposure o Indirect losses

To minimize static electricity:

1) Grounding/bonding electrical apparatuses (machinery) 2) use floor materials/coverings that don't conduct electricity 3) install ground wires on machinery with moving parts 4) require nonconductive clothing 5) increase humidity levels where practical

What contributes to frequency of fires in OFFICE occupancies?

1) Incendiary fires 2) fires of suspicious origin also contribute to frequency of fires in office occupancies - UW should consider moral hazard by analyzing: 1) past history of suspicious fire losses 2) business prosperity 3) length of time in operation

To minimize friction: (*equipment creating friction usually fails before causing fire)

1) Keep moving parts well oiled; 2) align moving parts properly for smooth movement 3) enforce preventative maintenance plan 4) give unusual noises or excessive vibration immediate attention

If plastic is being manufactured what construction type should the building be?

1) Noncombustible or Fire Resistive & people should be well trained

Building Codes; if properly enforced, can reduce losses. There are 2 types of codes:

1) Prescriptive Code - specific details on how building is to be constructed - size, type, and installation techniques 2) Performance Codes - more general guidelines and required level of performance of the building's structural components after constructions; established criteria that must be met.

What is the safest Heating equipment for indoor use

1) Propane- fired 2) oil 3) gas fired 4) electrical equipment • Modern kerosene heater require ample ventilation but do not present a significant hazard

How should computer systems be stored?

1) Separate room for network servers 2) other larger computer systems should be kept - clean - air conditioned - under strict supervision

Describe the primary means of protecting against excessive heat in systems distributing electric current

1) Using wire of sufficient size (gauge) for the load it will carry 2) Use appropriate beaker or fuse for the wire size 3) Containing the heat with insulation 4) Isolating distribution equipment from combustibles

o Why intensity of tropical storms making landfall is increasing:

1) Weather cycles (most attributed) 2) Complacency 3) Flood insurance 4) Climate changes

• Tetrahedron

3 sided pyramid with a base o Each side intersects with each of the other 3 planes, so the planes are dependent on each other o Fire tetrahedron/fire triangle are useful because the properties of each of the 4 components enable different suppression methods to effectively extinguish fire

Under business income coverage forms, which one of the following represents the time period after which a physical loss occurs until ordinary business income coverage commences?

72 hours

o Best way to prevent:

: good insulation and adequate ventilation under the roof

To mitigate water damage

: scuppers - built in devices that direct water out of upper floors of buildings, but aren't common in modern construction

A tool that underwriters can use to evaluate the effectiveness of building codes in general, and how vigorously they were enforced in a particular community, is

A Building Code Effectiveness Grading Schedule

Applicants for business income coverage complete which one of the following forms that becomes the basis for determining estimates of the insured's future financial performance?

A business income worksheet

Which one of the following businesses would most likely use a proprietary alarm system as its automatic fire detection system?

A business owner with multiple buildings that wants direct involvement in the monitoring system

Fire spreads horizontally until it exhausts all available fuel, runs out of oxygen, or encounters a barrier capable of containing the heat it generates. Which one of the following would act as the best barrier?

A fire wall

Fire Wall

A floor-to-roof wall made of noncombustible materials and having no open doors, windows, or other spaces through which fire can pass. - "a wall of sufficient fire resistance, durability, and stability to withstand the effects of an uncontrolled fire exposure, which may result in collapse of the structural framework on either side." Must not stop short of ceiling or floor and must not interfere with safe exit of building occupants Combustibility of building's contents determines the adequacy of fire walls In fire-resistive buildings, interior walls from floor to ceiling might be sufficient as fire walls; in masonry or frame building, fire wall must extend beyond roof line to be effective

Geographic information system (GIS) maps sometimes indicate defensible space areas. Which one of the following describes an area that would most likely be considered a defensible space?

A grassy lawn with sprinklers

Which one of the following statements is true regarding the cost-benefit analysis of a risk control program?

A project can be economically feasible only if the benefits exceed the costs.

Pre-fire planning surveys

A public fire protection service in which fire service personnel complete walk-through inspections and training runs of commercial property; fire personnel become familiar with locations of major buildings and equipment, fire hydrants, standpipes, and sprinkler system connections.

Wholesale clubs rely on high sales volume and low overhead to maintain their profit margins. Mitchell's, a membership wholesale club in the southeast, carries merchandise typical of stores across the United States, for both home and office. It offers membership both to individuals and businessowners. In addition to dry goods and furniture, Mitchell's maintains refrigerator and freezer cases for cold food; a butcher department; an onsite bakery; and an eatery for its customers that sells a limited selection of simple foods like pizza, cold and hot sandwiches, pretzels, and soft ice cream. A risk control representative who is assessing the property loss potential for Mitchell's is most likely to focus on its

A risk control representative who is assessing the property loss potential for Mitchell's is most likely to focus on its high-rack storage, which can aid the spread of fire and hinder firefighting efforts.

o Some chemical reactions cause Spontaneous ignition (spontaneous combustion)

An oxidation process in which the temperature of a material is increased to ignition without drawing heat from its surroundings. Occurs when combustible material (ex. coal or grain & flammable oils) ignites without heat from an external source

Spontaneous heating

An oxidation process in which the temperature of a material is increased without drawing heat from its surroundings. If the material is heated to ignition, it is called spontaneous combustion. Spontaneous combustion will result, for example, if oily mops are left in a poorly ventilated closet.

Describe the key HABITATIONAL occupancy underwriting considerations relevant to commercial property insurance.

Analysis of a habitational occupancy entails close consideration of these factors: 1) Ignition sources 2) Fuel load and the combustibility and susceptibility of contents 3) Cooking 4) Heating and air conditioning 5) Plumbing

An applicant wants to make sure that it has enough business income insurance to satisfy its policy's coinsurance requirement. However, it does not want to pay an excessive premium by having too high a coverage limit. Which one of the following endorsements or coverage forms would its underwriter most likely suggest as a way of addressing this concern of the applicant?

Business Income Premium Adjustmen

Even though it is impossible to tell when a business income loss might occur, which one of the following would be the best assumption for a business to use if its earnings fluctuate substantially from month to month?

Assume the loss will happen at the worst possible time.

Insurance Services Office (ISO) inspects and rates all buildings protected by sprinkler systems. An underwriter can obtain detailed technical information on the sprinkler system and its quality from which one of the following ISO services?

Automatic Sprinkler Grading Report

The proper way to determine how much business income coverage an insured needs is to start with a probable maximum loss expressed as

B. A dollar amount.

Which one of the following statements about the time to replace damaged property is true?

B. Risk control may be useful in minimizing the time to get an organization back into operation after a loss.

Aside from determining the value of a building, there are other underwriting considerations related to verifying commercial property values. Which one of the following statements regarding verifying property values is true?

B. Underground foundations and plumbing must be given special consideration when determining property values.

To assess the relative hazards of a particular occupancy and to accurately set pricing, underwriters consider four factors with the ISO occupancy rating system. Arnold, a property insurance underwriter with INEX Insurance Company, is evaluating a submission for property insurance on a group of hotels. Some of the hotels are located in highly populated urban areas, while others are business-type hotels located in suburban areas, and two are resort hotels at beachfront locations. Arnold must determine whether the amount of property insurance required for this risk is acceptable to INEX. Of the four ISO occupancy rating system factors, which one of the following would be most helpful to Arnold in determining whether to accept and quote this account?

Basic occupancy charge Of the four ISO occupancy rating system factors, the basic occupancy charge would be most helpful to Arnold in determining whether to accept and quote this account.

Describe the following factors used by Insurance Services Office, Inc. (ISO), in determining the hazard classification and rating of an occupancy:

Basic occupancy charge Combustibility of contents Susceptibility of contents Additional occupancy hazards

Wind speed is important to underwriters when evaluating wind as a cause of loss. An internationally recognized classification of wind velocity that assigns names and numbers to eighteen categories of wind and estimates the effects that winds will produce in each category is the

Beaufort Wind Scale.

Siamese connection

A sprinkler system connection that allows the fire department access to dry standpipes that supply water to hose stations and sprinkler systems; the connection is made through two pipes that extend from the building.

Flashover

A stage in the development of a contained fire in which all exposed surfaces reach ignition temperature at approximately the same time, causing fire to spread rapidly throughout the space.

To reduce the possibility of fire or explosion, most dry cleaning operations use

A standard solvent with a flash point comparable to that of kerosene.

Arson squad

A team of specialists used by municipalities and provided with special equipment to vigorously investigate and detect arson-for-profit cases, which are then prosecuted; coordinates efforts with police departments and district attorneys or other prosecutors.

Which one of the following statements is true?

A. Direct property losses are limited to 100 percent of the value the policy places on the insured property.

The Richter scale measures the magnitude of an earthquake by the total amount of

A. Energy released.

Factors that contribute to the water supply rating include all of the following

A. Maximum daily water consumption B. Part of the city protected by fire hydrants C. Ability of water system to deliver needed fire flow

An insured who owns a large business is comparing the different types of commercial insurance policies. The insured would likely choose a Commercial Package Policy because it will provide

A. The option to add lines of insurance for all coverages that are needed.

An electrical fire might best be extinguished with which one of the following fire extinguishers?

C. Class C

The off-site storage of computer programs and data is an example of an activity in which one of the following phases of a disaster plan designed to help minimize the period of restoration after a direct loss?

C. Pre-loss planning

The Alquan Corporation has an appropriate amount of business income insurance. Which one of the following statements describes how this will most likely affect their federal income taxes during a period of interruption?

C. The federal income taxes should be about the same.

The time necessary to repair or replace a building is important to an underwriter in determining the length of the period of restoration. Which one of the following statements in this regard is true?

C. The time needed to rebuild buildings of the same type of construction may vary by geographic area.

But, loss exposure is most severe in

California

Return air plenums using the space above suspended ceilings

Can be used to vent heat, smoke and toxic gases from a burning building.

Which one of the following hazards is perhaps the greatest single hazard in a metal-working occupancy?

Careless handling of flammable liquids

The National Fire Protection Association (NFPA) has developed five fire classifications and specifies the type of fire extinguisher to be used for each. Which one of the following fire extinguisher classifications would be most appropriate for the cooking area in a fast food restaurant?

Class K

In mining and coal processing what kind of dust is highly explosive?

Coat dust

A preaction sprinkler system

Combines elements of wet and dry sprinkler systems.

Combustibility of Contents

Combustibility - The ability of something to ignite and burn; a major determinant of the overall fire hazard. ISO's SCOPES ranks the combustibility of contents according to five classes.

Which one of the following statements is true regarding the flammable range of a mixture?

Combustion occurs most efficiently at or near the middle of the flammable range.

Commercial Fire Rating Systems

Commercial fire rating systems, such as the Specific Commercial Property Evaluation Schedule (SCOPES) used by Insurance Services Office, Inc. (ISO), are systems that indicate the degree of hazard that an occupancy presents in a particular classification. The SCOPES assigns each occupancy a Commercial Statistical Plan (CSP) code, which, for specifically rated risks, becomes part of the rating information that ISO supplies.

Analysis of the physical hazards associated with a structure is a crucial step for commercial property underwriters. Physical hazards, presented by any occupancy, can be most thoroughly analyzed if they are divided into three groups:

Common hazards Special hazards of the class Special hazards of the risk

According to the National Fire Protection Association (NFPA), cooking-related incidents are the leading cause of structure fires in stores or other mercantile occupancies. Which one of the following hazards causes nearly as much direct property damage as cooking equipment in mercantile occupancies?

According to the National Fire Protection Association (NFPA), incendiary fires cause nearly as much direct property damage as cooking equipment in mercantile occupancies.

The rate at which a business suffers financially due to a business income loss is known as the:

Actual loss sustained.

The Hinchman Corporation has its primary location in an older building. The municipality where the building is located recently revised its building codes to require that any building suffering more than minor damage will need to be brought up to current building code standards when it is rebuilt. The corporation's management is concerned that this will prolong the time it will take them to return to normal operations and increase any business income loss and extra expenses. What, if anything, should the management do to address this concern?

Add the Ordinance or Law—Increased Period of Restoration endorsement to their business income policy.

Valley Paints, a commercial painting contractor, maintains a dual purpose building. One side of the building houses its office and customer samples and meeting area. The other side, separated by a steel door, houses an on-site inventory of standard paints, solvents, sprayers, ladders, and other supplies. Under which one of the following ISO occupancy rating system factors is Valley Paints most likely to be charged a premium surcharge by its property insurer?

Additional occupancy hazards An underwriter may determine that an account has additional hazards for which surcharges can be imposed, depending on its additional occupancy hazards.

Collapse: Age influences UW desirability

Age influences the underwriting desirability of an account regarding collapse because buildings weaken through fatigue; misuse; or exposure to weather, such as the weight of ice, sleet, and snow. A building that is heavily loaded with contents will begin to show its age or wear through such symptoms as depressed wooden floors, spalled concrete (concrete with cracked or broken edges), or scaled concrete (concrete with surface deterioration, such as flaking and peeling).

More earthquakes strike ________ than any other state & highest magnitude

Alaska

Which one of the following statements regarding oxygen is true?

Almost all fires get their oxygen supply from the atmosphere, which is about 21 percent oxygen.

Self-service operations such as laundries and gas stations represent a significant percentage of service industry occupancies. Although self-service equipment is designed for easy operation, an underwriter might find such a business unacceptable if a trained attendant is not on hand, due to the risk of

Although self-service equipment is designed for easy operation, an underwriter might find such a business unacceptable if a trained attendant is not on hand, due to the risk of vandalism.

Static electricity

An electrical charge that is generated when two surfaces rub together in a clear, dry atmosphere. esp dangerous in grinding, milling, or crushing operations UW Factors: 1) detection equipment should be installed 2) electrical equipment should be well grounded to permit static electricity to discharge harmlessly into the ground 3) another way to reduce is to raise humidity levels

with respect to combustion and pressure explosion loss exposures MOST SERIOUS THREAT

ELECTRICITY open flames rarely pose a problem because it's so easy to recognize the hazard they create

Carworks, an automobile manufacturing plant, uses an assembly line to install components on the basic frames of its vehicles. The plant is well-kept and the equipment is well-maintained. Line supervisors are diligent about following all safety and fire protection protocols. Each automobile frame is placed on the assembly line and clamped to a conveyor to prevent shifting as it moves down the line. The conveyor is powered by an internal combustion engine fueled by natural gas from a tank fastened to the engine, with its exhaust system channeled through the plant's exterior wall to the outside. The automobile frame moves through component assembly areas where complete front and rear suspensions, gas tanks, rear axles and driver shafts, gear boxes, steering box components, wheel drums, and braking systems are sequentially installed. The engine and transmission are then installed inside the engine compartment. The floor pan, exterior panels and door, and roof are bolted and welded in place. Much of the work is done by robots instead of humans, because of robots' ability to lift significant weight, withstand exposure to excessive heat, stop and start assembly as needed without tiring, and achieve a much higher degree of speed and accuracy than humans can achieve. The robots are powered by electric motors that are the proper size and type for the intended use. Which one of the following areas is likely to be the greatest focus of a risk control inspection related to Carworks' fire loss exposure?

Exhaust and ventilation systems of the combustion engine used to power the conveyor The area likely to be the greatest focus of a risk control inspection related to Carworks' fire loss exposure is the exhaust and ventilation systems of the combustion engine used to power the conveyor, because this represents the highest risk of the hazards described for Carworks.

Which one of the four COPE elements commonly evaluated by property underwriters is most difficult to analyze?

External exposure

property owners can take these steps to protect themselves from flood damage:

FEMA provides information on preparing for flooding and actions that should be taken after flooding has occurred. - Erecting external walls and dikes prevents floodwaters from reaching exposed property. - Building strong walls and anchoring structures firmly to their foundations prevent floods from sweeping structures away. - Tying down fuel tanks keeps them from floating away. - Elevating mechanical equipment for heating, ventilation, and air conditioning located in basements or below ground level protects against water damage. - Applying waterproofing treatments to walls and surfaces in basements or below ground level also helps to mitigate flood damage.

leading causes of pressure vessel explosions are these failures:

Failure of controls Failure of safety devices Failures related to the structure of the vessel

The most recent scoring system used to evaluate public fire protection is called the

Fire Suppression Rating Schedule (FSRS).

Fire doors are usually rated according to their

Fire-resistive hourly rating.

Explain how the following characteristics of fuel materials can influence the extent and intensity of fires:

Flammability and combustibility Vaporization rate Fuel load

What is the most significant fuel load component?

Flammable plactic dust

Regarding flame spread due to flashover, which one of the following statements is true?

Flashover can occur only if all of the combustibles in a room absorb heat at approximately the same rate and have approximately the same self-ignition point.

has greatest occurrence of sinkholes during drought years and in late-spring dry season when groundwater levels are at their lowest

Florida

The point on the fault line at which movement of the earthen plates begins is an earthquake's

Focus ( EQ FOCUS)

o Presence of combustible and susceptible contents also contribute to fire severity

For example, mattress fires caused by careless smoking in bed have resulted in extremely serious and often fatal apartment, hotel, and nursing home fires. Many hotels/motels have carpentry workshops in which furniture is repaid, refinished, or reupholstered which present great hazards • Storage of paint and volatile solvents; combustible stuffing materials and fabrics o Should have enclosed metal storage closets for storing these; and ventilated to carry off fumes Storage areas for surplus furniture, mattresses, and other items • These rooms should have sprinklers and be separated by fire walls in properly enclosed noncombustible rooms Storage areas available to tenants (like in apartments, condos, etc.) present several hazards • Personal property, that can be flammable and damageable, are found in these areas and have questionable housekeeping • Difficult to control

What are the primary ignition sources associated with heat treatment?

Furnaces oil quench tanks molten salt baths

Common Hazards

Hazards existing in almost every class of business occupancy, usually referring t: 1) housekeeping 2) heating equipment 3) Electrical equipment 4) Smoking - Common hazards are those conditions or features that are typical of any structure, regardless of its use, and that can cause or aggravate a loss.

A small fire occurred in a local neighborhood damaging half of Gretta's Grocery Store. Smoke damage occurred throughout the store. Health authorities are likely to do which one of the following with the food items in the store?

Health authorities will likely destroy the food items.

Which one of the following statements regarding heat damage is true?

Heat expands all matter at different rates and softens metals.

Of the following types of property, which one would be of the most concern to an underwriter as it relates to potential hail damage?

Historic buildings with copper or tin roofing

Fires spread faster in an oxygen-rich atmosphere. Which one of the following is most likely to have an oxygen-rich atmosphere?

Hospital

When an insurer's risk control representative is on the premises of a company, which one of the following is often considered a true indication of management's commitment to the risk control program?

Housekeeping practices

What can also contribute significantly to the frequency of fires in habitational occupancies?

Intentionally set fires also contribute significantly to the frequency of fires in habitational occupancies (although not all of these necessarily are related to moral hazard). - Therefore, the financial stability of the owner is an important underwriting consideration for the habitational class.

Describe the key MANUFACTURING occupancy underwriting considerations relevant to commercial property insurance.

Ignition Sources Fuel Load and the Combustibility and Susceptibility of Contents Industrial Materials Handling Equipment

Describe the key OFFICE occupancy underwriting considerations relevant to commercial property insurance.

Ignition sources Fuel loads Special hazards of the class or risk

Describe the key SERVICE occupancy underwriting considerations relevant to commercial property insurance - businesses that perform an activity for the consumer, rather than create or sell a product - hazard is usually specific to the service being performed

Ignition sources o Electrical equipment and wiring o Heating processes o Welding and cutting operations o Smoking Fuel load and the combustibility of contents o Service occupancies o Solvents, oils, paints, grease Self-service businesses

The regular cleaning of special hazards such as spray booths and exhaust ducts is critical to private fire prevention because they are

Ignition sources.

Under business income coverage forms, which one of the following represents when extra expense coverage commences following a physical loss?

Immediately

When an underwriter is considering providing flood coverage they must determine the extent of coverage they are willing to provide and the price at which they will offer it. Which one of the following is true regarding the coverage or price an underwriter will provide for flood coverage?

Insurers can use NFIP rates as a starting point to price flood insurance for their own coverage.

Underwriters can estimate the probable maximum loss (PML) for business income coverage by using all of the following steps, EXCEPT:

Convert the worst foreseeable loss to a dollar value.

Automatic fire suppression systems that use wet chemical extinguishing methods are designed to protect against fire losses that originate in

Cooking equipment.

MERCANTILE: Ignition sources What is the leading cause of structure fires?

Cooking related incidents are leading cause of structure fires in stores or other mercantile occupancies EX: in supermarkets, retail store restaurants, shopping mall eateries

When working with a valuation guidebook or computer software, underwriters use several factors to determine a property's value. Which one of the following is a factor evaluated by underwriters to determine property value?

D. Construction materials used

Which one of the following statements about important considerations to underwriters of business income insurance is true?

D. What constitutes continuing expenses varies by account.

Anaka, a risk control representative, has been asked to conduct a site inspection and provide recommendations to Larson Company, a pulp and paper mill. Larson's mill produces a wide variety of specialty packaging and publishing papers. Its pulp processing operations primarily use biomass energy sources rather than fossil fuels or purchased electrical energy to fuel its processing equipment. Both mechanical and chemical methods are used to manufacture pulp, and then the finished pulp is dried and used to produce cardboard and paper products. In speaking with plant personnel, Anaka finds that the plant's equipment is well-maintained. Which one of the following is likely to be a key consideration for Anaka to advise her underwriter with respect to Larson's risk?

Danger of static electricity from Larson's processing operations igniting dust particles and causing a fire or explosion

Underwriters should consider whether the insured's operation might be subject to the explosion loss exposure. A combustion explosion that proceeds at a speed that generates a shock wave would be which one of the following types of explosions?

Detonation

All of the following are common watch service systems, :

Merchant police Tour Clock and tape

What should metal hoods be equipped with?

Metal hoods should be equipped with 1) noncombustible hood filters 2) explosion-proof lights

Insureds sometimes purchase package policies to meet their insurance needs. The underwriting approach can be affected by the type of package policies offered. Which one of the following types of package policies is used to reduce adverse selection and often results in a premium discount for the insured?

Minimum combination requirement

Fire

Modern technology has increased the use of noncombustible materials noncombustible materials 1) introduced high-capacity electrical systems 2) improved heating and cooling systems 3) changed the predominant fuels used on premises

Often, the damage in fires arises not from the fire itself, but through secondary damage from the suppression efforts. Which one of the following is a common secondary damage resulting from fire suppression efforts?

Mold

Which one of the following types of watch service detection systems is most effective?

Monitoring service system

Collapse

Most commercial property policies that cover broad named causes of loss provide coverage for collapse caused by certain perils.

Where do most electrical fires start?

Most electrical fires start in the wiring that distributes the current.

Manufacturing is an occupancy class that has inherent hazards due to the flammable and combustible materials used during the manufacturing process or as a result of the nature of the finished goods. Which one of the following statements is true regarding the property risks associated with manufacturing occupancies?

Most manufacturing occupancy property fires originate in the occupancy's process or manufacturing area or workroom and involve shop tools or industrial equipment.

Which one of the following statements about factors that affect the amount of business income losses is true?

Most organizations greatly underestimate the time needed for a complex construction project.

What provides guidance that an underwriter may use to ensure that the dust hazard is reasonably controlled

NFPA 654, Standard for the Prevention of Fire and Dust Explosions When operations produce a large amount of dust in the air, the dust must be removed. 1) Suction fans 2) hoods 3) forced ventilation should be installed to prevent a cloud of the dust from forming. Electrical motors and other electrical equipment should be dustproof and well grounded to prevent static electricity. Electric lights should have explosion-proof fixtures. If metal grinding is involved, magnets can be used to keep the particles from escaping into the air.

Which one of the following poses a severe danger of fire from spontaneous ignition?

Oily rags

Ice dams form

On the edge of roofs and can cause water to penetrate roofs.

A book of fire business is usually balanced regarding protection, with the proportion of unprotected and poorly protected business kept within limits set by top underwriting management. Which one of the following books of business would have the most loss variability and be less desirable?

One that is heavy in unprotected properties

• SAFEST PORTABLE HEATER

PROPANE-FIRED

Which one of the following statements regarding accumulations of ice and snow on a flat roof is true?

Packed snow and ice block roof drains keeping melted snow from running off.

Which one of the following public protection services provided by some municipalities is particularly important for businesses that use hazardous materials?

Pre-fire planning surveys

When estimating future business income losses,

Predicting which assets will have the strongest effect on the insured's earnings is often not possible.

The most common types of explosion are combustion explosions and

Pressure explosions.

From an underwriting perspective, which one of the following is the key to controlling water damage losses?

Preventive maintenance

One primary method of achieving early suppression is

Private suppression equipment.

From the perspective of the insured, one of the benefits of obtaining a package policy is that package policies

Reduce gaps and overlaps in coverage.

Manufacturing: Fuel Load and the Combustibility and Susceptibility of Contents Inventory... UW must evaluate:

Regardless of the commodity, underwriters must evaluate the physical arrangement of the inventory and housekeeping. A congested layout contributes to loss severity.

Which one of the following housekeeping efforts would help reduce the fuel loading?

Removal of overgrown weeds and brush outdoors

What is more important for fire suppression?

Removing obstructions

Which one of the following major objectives of effective housekeeping is more important for fire suppression than fire prevention?

Removing obstructions

Seismologists use the

Richter scale to measure the magnitude by total amount of ENERGGY released; the energy released by an earthquake at its epicenter - point on earth's surface directly above the earthquake focus

Explain how an underwriter can use the following tools to manage riot, civil commotion, and terrorism exposures:

Risk control measures Pricing Monitoring the book of business

Robert, an underwriter, is reviewing a property insurance submission for Lincoln Apartments. The Lincoln Apartments complex is a cluster of six-story buildings of fire-resistive construction, with interior access to its units. The buildings were built three years ago, and meet current fire protection code requirements. The apartment units are fully sprinklered. The buildings are connected by breezeways, and a seventh building houses two levels of storage units for use by its residents. The buildings are maintained by Lincoln Apartments' own employees. Janitorial supplies, and paints and solvents for touching up and repainting units as needed, are kept in a separate ventilated metal storage shed. Which one of the following hazards is most likely to be of concern to Robert in underwriting the property insurance for this risk, and prompt him to recommend strict enforcement of security measures?

Risk of fire in the tenant storage areas is the most likely to be of concern in underwriting property insurance for this risk, and the most critical hazard for strict enforcement of security measures.

Marty's Crab Shack is an owner-operated small casual restaurant on the bay shore in Maryland that is best known for its seafood platters and sandwiches. Its deep-fried crab cakes are said to be the best in the area. The building was built in 1987 of frame construction. Marty, the Crab Shack's owner, lives in a second-story apartment above the restaurant. Business has been slow for the past couple of years due to a sluggish economy, but Marty is optimistic that recently completed extensive building and cosmetic renovations and increased advertising will strengthen sales. So far it seems to be working, as sales have been showing a steady improvement. Marty enforces strict housekeeping procedures to make sure that equipment is kept clean and trash is properly disposed. In particular, he requires that the hood and duct above the deep fryer be thoroughly cleaned by his employees each evening before closing to help prevent grease build-up, and he has a service contract in place for quarterly cleaning of the system by professionals. Malik, an underwriter, is evaluating Marty's Crab Shack for property insurance. Which one of the following is Malik most likely to find of concern with respect to this particular risk?

Risk of severe loss to Marty's Crab Shack's contents in the event of a fire.

Underwriters should look for techniques an account may have in place to minimize damage from explosions that may occur. Which one of the following is an example of one of these techniques?

Separating operations

The fire department connection that allows the fire department access to dry standpipes that supply water to hose stations and sprinkler systems is known as the

Siamese connection.

INSTITUTIONAL How to underwrite and mitigate risk for Malfunctioning electrical equipment and faulty wiring for institutional occupancies?

Investigate: 1) age 2) type 3) condition 4) and if it complies with NFPA 70 * Should be listed with Nationally Recognized Testing Lab (NRTL): 1) Be properly grounded 2) Have double-insulated wiring

Both hurricanes and tornadoes can be classified based on wind speed and the destruction they cause. Which one of the following correctly describes the Enhanced Fujita Tornado Damage Scale as one of these classification methods?

It classifies tornadoes on a scale of 0 through 5 based on twenty-eight damage indicators.

Restaurants are a frequently encountered class of business, either as an insured occupancy, or as a tenant in buildings that an underwriter is asked to insure. Restaurants may be housed in a variety of structures that can present unique underwriting problems. Which one of the following statements is true regarding the underwriting considerations for restaurants?

It is difficult to standardize property underwriting of restaurants, because each particular type of cuisine in which a restaurant specializes presents different hazards.

External exposure is much more difficult to analyze than construction, occupancy, and protection, primarily due to

Lack of information.

Determining whether the insured and the fire service conduct pre-fire planning surveys at the property under consideration is particularly important with

Large commercial risks.

MERCANTILE: Fuel Load Substantial Space What characterizes a warehouse?

Large undivided areas and high ceilings characterize a warehouse

The amount of extra expense insurance that an insured will need is

Largely a matter of speculation.

Sharon Petty has given her sister, Ellen, the right to use a property during Ellen's lifetime. Upon Ellen's death, this right terminates and cannot be passed to her estate. At Ellen's death, Sharon, if living, will retain outright ownership of the property. If Sharon dies before Ellen, the property will pass to Sharon's brother, Patrick.

Life tenant.

Underwriters should be concerned that the potential for a combustion explosion be controlled, and the damage it can cause be mitigated. Maintaining a lean air-fuel mixture for potentially explosive equipment is one effective protection in this area. Maintaining this lean air-fuel mixture is which one of the following strategies for controlling combustion explosions?

Limiting the supply of fuel

How can accountability for meeting risk control goals best be achieved?

Link to job performance and appraisal system and active participation can be gained by linking it to the company's job performance and appraisal system.

Which one of the following types of automatic fire detection systems is only effective during working hours when the building is occupied?

Local fire alarm system

Physical hazards increase the probable frequency or severity of a loss. Which one of the following descriptions demonstrates special hazards of the class?

Maintenance garage at a school bus depot

National Fire Protection Association (NFPA) standards establish minimum requirements that should be met for fire safety. NFPA standards are particularly relevant for which one of the following types of business?

Manufacturing

Interior finish

Materials used to form the exposed interior surfaces of walls and ceilings; includes carpets, ceiling tiles, wallboard, insulating materials, and decorative materials.

Which one of the following statements about the rate at which business income losses tend to occur is true?

Standard business income forms express this as actual loss sustained, and it includes lost income as well as continuing operating expenses when a business is closed.

When evaluating a submission for a building more than 20 years old, some underwriters request a risk control inspection to verify the condition of the key elements of the building. Which one of the following is most likely what an underwriter wants to verify, even with an older building that has been adequately maintained?

That the roof shingles and surfaces have been replaced within the last twenty to thirty years -Even an older building that is adequately maintained will show its age in its exterior surfaces, particularly the roof. Losses can be expected from hail or wind if the roof shingles and surfaces are not replaced every twenty to thirty years.

Suny, a property insurance underwriter, is concerned about balancing the values at risk for his book of business. He must pay careful attention to concentration and susceptibility of contents values, and has been instructed by his management to avoid accepting institutional accounts that represent highly susceptible contents, in order to achieve a better level of profitability on the book. Which one of the following new business submissions is Suny most likely to decline?

Suny is most likely to decline the urban pediatric hospital, because some institutional contents like those in hospitals are highly susceptible to damage, and also represent high values.

Susceptibility of Contents

Susceptibility - The extent to which fire and its effects will cause damage to materials. o Even contents that don't burn can be damaged from fire, smoke, and water Ex. a furniture store

In mercantile occupancies, the combustibility of the contents varies, depending primarily on the

The combustibility of contents varies depending primarily on the merchandise being sold.

Automatic sprinklers provide the most effective protection against loss by fire, however underwriters should not overlook the sprinkler leakage loss exposure. Underwriting considerations for evaluating an account for sprinkler leakage exposures include which one of the following?

Susceptibility of contents to water damage

Jade, an underwriter, is reviewing a property insurance submission for Miller's Furniture, a 70,000 square-foot area, privately-owned retail furniture store. Miller's offers a large selection of area rugs; metal, wood, and upholstered furniture; and decorative items for the home such as artwork, lamps, small sculptures, artificial flower arrangements, and tapestry wall hangings. Much of the upholstered furniture is made with flame-retardant fabric. Some of the wood items are solid oak, cherry, or mahogany, while other, more modern pieces, are of painted and varnished wood. Of the four ISO occupancy rating system factors, Jade's greatest concern with regard to underwriting Miller's account is likely to be the

Susceptibility of contents.

Describe Tempering Vats and how to UW

Tempering vats containing oil are usually used for quenching or rapid cooling of metal objects. Those vats should have: 1) temperature controls 2) self-closing covers 3) overflow pits with drains 4) Hoods should cover the vats to prevent water from getting into the vats.

Which one of the following types of property ownership is available only to a husband and wife?

Tenancy by the entirety

Which one of the following is measured by the Modified Mercalli scale?

The damage that an earthquake causes to people, property, and the surface of the earth

The building's conditions might have deteriorated for numerous reasons, including normal wear and tear, hard use, or lack of maintenance

The degree of obsolescence or deterioration is directly related to the: 1) type of construction 2) the occupancy 3) the physical abuse of the building 4) quality of the owner's maintenance. A frame building normally shows its age more quickly than a joisted masonry building.

OFFICE: • Special hazards of the class or risk o Assess an office's exposure to chemicals

o Assess an office's exposure to chemicals solvents used for cleaning office machinery and should be contained in locked cabinets Employees should keep only a one-day supply of combustible liquids in self-closing metal cans. Bulk supplies of flammable liquids in manufacturers' cans should be stored in accordance with NFPA standards. A separately vented fire-resistant cabinet is preferable.

• Office

o Buildings that are at least partially dedicated to professional or service-type transactions o Ex. architects, attorneys, banks, etc.

True time element losses can be thought of as having all of the following components,

The rate at which loss occurs during that period A length of time over which the loss occurs The specific period of time in which the loss occurs

Which one of the following would be most difficult to quantify when performing a cost-benefit analysis of the installation of an automatic sprinkler system?

The reduction in risk of injury

The risk control program for a large commercial organization is typically coordinated by

The risk control program for a large commercial organization is typically coordinated by a full-time risk manager.

• Service industry

o Businesses that perform an activity for the consumer, rather than create or sell a product o Hazard is usually specific to the service being performed

• Special hazards of the class

o Characteristic typical of all occupancies in a given class; can cause or aggravate a loss For example, cooking is a special hazard of the restaurant class. It is common to restaurants, but not to other occupancies, such as clothing stores. Hazards that increase the probable frequency or severity of loss but that are typical for the type of occupancy are called special hazards of the class.

What demands special UW attention?

o Chemical hazards & involve many materials, processes, & products • Ex. paint manufacturers and pharmaceuticals

• Special hazards of the risk

o Condition that can cause a loss but is not typical of an occupancy When businesses engage in activities that are not typical of other businesses in their class A maintenance garage for a large fleet of trucks or taxicabs, for example, might contain a small body shop with welding equipment. The garage creates special hazards of the class, but the auto body work, typically performed by an auto body shop, creates special hazards of the risk. o Neither contemplated by the UW nor considered in standard rates for that class o Identified by physical inspections of the insured's business

o Explains rapid spread of fire in high-rack storage

o Convention

• Manufacturing

o Convert raw stock into finished products, and hazards vary by the product being manufactured

• Fire resistant components

o Decrease change that building will burn in wildfire Ex. shake shingles are readily combustible; composition shingles have high fire rating; decks can be constructed of fire resistant material

OFFICE: • Fuel loads What does fuel loads depend on?

o Depend on size and scope of insured's operation o Many office still use documents, books, files, packaging materials, and other paper based materials that create heavy fuel loads

UW should request insured's

o Disaster planning can also be effective - UW should request insured's disaster recovery plan (can include sandbagging, moving contents to a higher floor, etc.)

OFFICE: • Special hazards of the class or risk What is the primary source of OFFICE fires?

o Eating facilities for employees cooking equipment presents additional ignition source Employee cafeterias often have the characteristics of a full scale restaurant However, relatively small percentage of overall property damage caused by office fires; but still primary source of office fires Automatic flame failure relays should protect gas-fired domestic ranges

SERVICE: Ignition sources

o Electrical equipment and wiring Faulty or inadequate wiring systems and malfunctioning equipment Pay attention to any source that generates electrical sparks - especially in occupancies with gasoline or highly flammable materials Comply with NFPA 70 and that electrical equipment is properly grounded Wiring should be routinely inspected and maintained; number, age, and condition of equipment Another potential ignition source is overheated electrical equipment

• Indirect consequences of volcanic eruption are NOT covered

o Ex. cost of cleanup

SERVICE: Fuel load and combustibility of contents

o Ex. gas station fuel load = petroleum based liquids such as gasoline, diesel fuel, motor oil, and kerosene o Service occupancies (ex. repair shop) that use flammable paints, refinished fluids, and cleaning solvents should use them carefully in a well-ventilated area Should be stored in metal, enclosed lockers Spray paint - kept in clean and ventilated shops and done only in an approved spray booth o Solvents, oils, paints, grease - dry cleaning operations should be done in a separate area that is well ventilated, grounded equipment, and lighting and other switches should be explosion proof Most cleaners use standard solvent with a flash point comparable to that of kerosene o Lint might settle on equipment which presents fire and explosion hazards Housekeeping is a prime UW consideration - timely cleaning of lint traps and regular removal of lint; proper ventilation

• Institutional

o Ex. schools, churches, hospitals, and property owned by governmental entities o Often operate habitational properties such as public housing and nursing homes o Also include special-purpose facilities, like prisons and police/fire stations o To insure, commonly use: 1) risk retention groups 2) municipal pools 3) alternative risk transfer o Most likely category to cause a property UW to question the possibility of adverse selection

SERVICE: • Self-service business

o Ex. self-service laundries or gas stations - pose significant fire hazards o Verify that a trained attendant will be on hand, despite the fact that the equipment is designed for easy operation Ready to react in an emergency if equipment is misused or defect develops o Subject to vandalism (especially if open 24 hours)

Plumbing

o Extensive - kitchens and bathrooms w/ networks of cold and hot water pipes and sanitation pipes throughout the building to service them Water overflow can damage contents & warp wooden floor o A building heated by steam or hot water systems also requires a network of pipes If building has sprinklers or standpipes, leakage hazard is increased Should be insulated to avoid freezing o Panel heating or radiant heating systems with hot-water pipes embedded in walls, ceilings, or floors are subject to several hazards Can freeze and break; wind damage; costly repairs

• Fires without atmospheric oxygen

o Few fuels burn readily without atmospheric oxygen by obtaining their oxygen supply from other substances

• Fire protection and defensible areas

o Fire protection/services for combating wildfire are available from local fire districts, state natural resource districts, and federal agencies

What is the leading cause of fire for INSTITUTIONAL occupancies?

o For many institutional occupancies (hospitals, medical facilities, and educational facilities) cooking equipment is the leading cause of fire

What has the greatest fuel load

o Frame construction has greatest fuel load because almost entire building is combustible

• Wildfire UW considerations

o Fuel sources in the area, slope of the land, road access of fire suppression equipment and personnel; availability of fire protection services & equipment, defensible space around the properties, weather conditions, building codes, zoning laws

How to control loss for cooking in a habitational occupany?

o Full restaurants should be separated from rest of structure by firewalls and doors, and all cooking equipment should be installed and maintained properly

Where should Gas, anesthetics, oxygen, and acetylene be stored?

o Gas, anesthetics, oxygen, and acetylene must be stored in metal cylinders in a fire division separate from the main building and chained upright to prevent accidental upset; well ventilated area

INSTITUTIONAL": Oxygen and gas hazards Describe the risk associated with gases used for anesthesia

o Gases used for anesthesia are explosive Sealed atmosphere of a hospital give it essentially the same characteristics as a bomb

• Mechanical heat source

o Generates heat and ignites fire through 1) friction 2) sparks 3) pressure in an enclosed space, such as in an engine

• Heating and air conditioning

o Heating systems vary and may provide heat by way of a hot air duct system, steam radiators, hot water pipes, or electrical or gas space heaters o Most hotels/motels/apartments/etc. are built with AC, so ducts run through the entire building

• Insurance advisory organizations

o Help insurers develop property rates by providing some of the info needed to do so

• Weather conditions

o High temps (above 92°) and arid conditions in late summer and autumn are ideal conditions for a wildfire to ignite and spread o Strong winds - promote spread of fire

• Factors to consider when analyzing occupancy hazards:

o Ignition sources - item/substance/event capable of causing a fire or explosion, such as open flames, sparks, or static electricity o Fuel load (aka fire load) o Combustibility and susceptibility of contents, furniture, and fixtures o Interior finish of the structure o Efficiency of management (housekeeping, employee training, risk control programs)

MERCANTILE: Ignition sources Incendiary fired and fires of suspicion

o Incendiary fires and fires of suspicious origins also contribute to frequency Cause nearly as much damage as cooking equipment Moral hazard is an important UW decision - look at: - credit standing of owner - existence of labor problems - history of suspicious fires - length of time in business - prosperity of business - market/technological change effects

• Habitational

o Include buildings that contain units for shelter and sleeping accommodations o Often supervised residential environments o Ex. apartments, hotels, motels, and nursing homes o Leading cause of fire is cooking equipment

• Mercantile

o Includes buildings, or a portion thereof, which are accessible to the public and used for the display and sales of merchandise o Combustibility varies by type of stock sold

INSTITUTIONAL: • Heating systems How can we prevent such hazard for heating systems?

o Institutional heating unit should be in separate, enclosed room isolated from the rest of the building by firewalls due to its size; furnace room should NEVER be used for storage

• Incendiary heat source

o Intentional, as in arson Arsonists generally ensure incendiary fires are severe by using highly flammable liquids or combustible material to spread the fire

MANUFACTURING: • Fuel load and combustibility and susceptibility of contents

o Inventory o Materials and supplies o Plastics o Combustible dust o Painting and finishing processes o Spontaneous heating o Flammable liquids o Chemical hazards

• Risk assessment and pricing tools (EQ)

o Key UW consideration: areas of earthquake activity o Use predictive models for per risk and portfolio analysis Tools assist insurers with purchasing affordable reinsurance programs Key component: quality of data on which model is based

Cantilevered walls

o Latticework reduces wind force on both sides o Adding lateral support to top can add strength

SERVICE: Fuel load and combustibility of contents

o Lint might settle on equipment which presents fire and explosion hazards Housekeeping is a prime UW consideration - timely cleaning of lint traps and regular removal of lint; proper ventilation

• Other causes of loss arise from exposure to forces of nature

o Little can be done to prevent property losses from nature made losses; hard to predict

• Extent and nature of damage from wildfires

o Loss of natural resources o Some wildfires have resulted in gov't mandated evacuations o Property that is exposed or may be exposed can be treated with water o With technology's fast spread of info and warning systems, people are generally informed in sufficient time to evacuate areas threatened by wildfires

INSTITUTIONAL": 2) Fuel load and combustibility and susceptibility of contents Describe the hazard included with maintenance shops and storage rooms in schools, hospitals, etc.

o Maintenance shops and storage rooms in schools, hospitals, etc. can contain high hazard wood and metal working operations; craft shops in schools Most effective risk control measure: storing hazardous supplies in metal enclosed receptacles and dispensing only a limited amount at one time Adequate ventilation for rooms with flammables Bunsen burners on metal base and connected to gas source with rubber tubing

MERCANTILE: Fuel Load Describe a frequent cause of kitchen fires with respect to mercantile occupancies?

o Many mercantile occupancies contain cooking facilities - GREASE BUILDUP is a frequent cause of kitchen fires Consider whether in compliance with NFPA 96 standard for ventilation control and fire protection of commercial cooking operations Fire suppression system where stoves/deep fryers are located

MERCANTILE: Combustibility and susceptibility of contents - Inventory/operating supply

o Many mercantile operations carry highly combustible items as inventory or operating supply Sporting goods store stocking ammunition and fuel for camping stoves/portable lanterns Furniture store having refinishing chemicals and polishes Hardware stores stocking paints, varnishes, solvents, etc. Clothing stores - clothes but also large amount of associated paper and plastic wrappings

Premium discount is provided

o Minimum requirement combination policies

o Most common cause of ignition of wildfires

o Most common cause of ignition of wildfires Have also been caused by downed electrical lines sparks from train wheels people's careless abandonment of campfires/cigarettes arson

Risk control measures for air conditioning for a habitational occupany?

o Most hotels/motels/apartments/etc. are built with AC, so ducts run through the entire building Unless properly protected, they will transmit flames and smoke Automatic dampers (act as fire doors to prevent spread of smoke or fire) effectively control this hazard

MERCANTILE: Fuel Load

o Most maintain substantial space for storing their inventory; the back of a retail store may resemble a warehouse

What movable object in office fuel loads also present a potential hazard?

o Movable partitions and wall modules also present potential hazards - usually lower than ceiling height and the result is an open area that is one fire division & a single draft area

• Nuclear heat source

o Nuclear energy generates heat when atomic particles collide in a process called FISSION Can be significant ignition source

INSTITUTIONAL": 2) Fuel load and combustibility and susceptibility of contents

o Often consists of highly combustible supplies and contents, which vary by occupancy Ex. chemicals for science programs, cleaning solvents, hospital lab contents, textbooks, furniture, in prisons and college dorms - mattresses

MERCANTILE: Fuel Load What are other contributors to fuel load?

o Other contributors to fuel load include: - office furniture - display items - discarded paper and trash - cleaning materials - packing materials

• Physical risk control measures

o Perimeter safeguard for premises to protect against burglary (fences, lighting, guards, alarms, etc.) o Minimize amount or value of property that invites vandals o Keep videotape records and maintain logs of all visitors

• Sprinkler leakage UW considerations

o Physical condition, maintenance, and design of system o Susceptibility of contents to water damage

o Leading causes of pressure vessel explosions: Failure of controls

o Primary controls - within design limits and are sensitive to temp or pressure; will shut down when tolerances are exceeded; designed to restart equipment o Secondary controls - shut down equipment as soon as an unsafe situation begins to develop; good ones require manual intervention to reset the equipment

MERCANTILE: Ignition sources

o Primary ignition sources involve faulty or malfunctioning wiring and electrical equipment

OFFICE: Ignition Sources What are the primary sources for fires?

o Primary sources for fires: faulty or malfunctioning wiring and electrical and lighting equipment - Electrical distribution and lighting equipment fires and intentionally set fires caused more property damage than those caused by other ignition sources, such as heating equipment and smoking materials.

Basic Occupancy Charge

o Rating system factor that reflects the relative hazard of an occupancy for pricing purposes and is expressed as a % of the base rate (ranges from 10%-1000%) o Helps UW reference how an occupancy's degree of hazard compares with that of other occupancies o Also consider this when analyzing the composition of all policies written - For example, a book of property business made up entirely of sawmills would produce an attractive premium per unit; however, it would represent a high level of exposure to loss that is likely to be unacceptable to reinsurers. o Hazards also provide insight into the importance of additional hazards that might be present in a particular risk (ex. poor housekeeping can increase the charge)

MERCANTILE: Combustibility and susceptibility of contents

o Relatively significant because of display & sale of large quantities of combustible goods Combustibility depends on merchandise being sold; but inventory is also susceptible to fire, smoke, and water damage

• Special managerial risk control measures

o Remain alert to, and try to defuse, signs of hostility from community o Maintain good relationships with employees, their families, suppliers, customers, and others who could potentially seek vengeance o Communicate specific concerns about possible vandalism to police/public fire officials o Check on ability to replace items that have been previously vandalized, or likely targets

• Locations prone to wildfires

o Remote areas with 1) heavy fuels 2) subject to arid conditions/high winds are more prone to wildfires o In US, most states are subject to wildfires in forests & grasslands Most costly reported in: CA, NM, & AZ (highest in CA)

MERCANTILE: Combustibility and susceptibility of contents - merchandise stock is subject to water and smoke damage - RESIDUAL DAMAGE

o Residual damage, such as smoke and water, can turn a small fire into a large loss Damage to clothing; hardware store's stock rusting from water; health authorities destroying food in neighboring store/supermarket damaged by fire or smoke

Risk Control Surveys and Reports

o Risk control report - record that contains account info gathered as a result of a physical inspection by an insurer's risk control rep at the UW's request Info includes general background/financial info and loss history Also more detailed info specific to loss exposures premium rating data, construction, occupancy, adjacent exposures, heating/AC, fire protection, etc. Essential UW skill is to properly interpret a diagram • Includes info about structure and fire protection and internal processes Usually expensive - follow guidelines to order selectively • Risk control survey might not be feasible for reasons such as low premium, location of account, or time constraints

• Procedural risk control measures

o Search those entering premises fore weapons or other means of causing damage o Escort visits at all times while on premises o Remove keys, passes, passwords, ID cards, and other authorization forms from any employee who retires, becomes disabled, is discharged, or given disciplinary leave

How to control Storage of paint and volatile solvents; combustible stuffing materials and fabrics

o Should have enclosed metal storage closets for storing these; and ventilated to carry off fumes

What can cause accidental fires

o Smoking materials and matches Health codes to restrict smoking and smoke-free establishments or at least have designated areas/ashtrays for those that permit smoking

INSTITUTIONAL Ignition sources: SMOKING how can we mitigate this risk?

o Smoking remains a prime ignition source - ensure that: 1) "no smoking" signs are posted in areas near flammable materials 2) safe receptacles for cigarette ashes

•Habitational: Cooking

o Special hazard of the class Every apartment dwelling has a kitchen or kitchenette with a domestic type of gas or electric stove Hotels/motels can have range from kitchenettes to full restaurant facilities Nursing homes have kitchens, which along with clothes dryers, pose greatest fire threats o Full restaurants should be separated from rest of structure by firewalls and doors, and all cooking equipment should be installed and maintained properly

INSTITUTIONAL: Plumbing

o Systems are extensive because of requirements of sanitation, cooking, etc. o Piping is frequently installed throughout the building to supply water for private fire protection consisting of sprinklers, standpipes, pumps, and gravity tanks

Whats the difference between fire and other forms of oxidation

o The difference between fire and other forms of oxidation is the speed at which the chemical reaction occurs (fire develops rapidly) Fires are self-sustaining until some outside force interrupts it • Until an external act suppresses it or until it exhausts its fuel load Temperature required for combustion decreases as atmospheric pressure increases

o The chances of damaging seismic activity throughout the US are assessed by the

US Geological Survey

INSTITUTIONAL What should the UW determine for cooking equipment?

UW should determine - age - type - condition of insured's cooking equipment and note if electric is used instead of gas

Electrical testing facilities

UWs Laboratories (UL)- approve products installed and used according to the requirements of NFPA 70

On a wildfire map showing fuel type classifications, which one of the following would describe a heavy fuel area?

Underbrush and shrubs

An underwriter should be familiar with different types of occupancies and the risks they present to properly evaluate them for property insurance. In particular, underwriters should be familiar with the wide variety of occupancies in the largest and fastest growing segment of most Western economies, which is

Underwriters should be familiar with the wide variety of occupancies in the largest and fastest growing segment of most Western economies, which is service industry occupancies.

Fire detection

Using fire-sensing devices, guard services, and communications systems that transmit fire alarms

Fire suppression

Using firefighters, automatic sprinkler systems, fire extinguishers, and fire brigades

Mitsuki, an underwriter, is evaluating a property insurance submission for Machineworks Limited, a metalworking shop that fabricates precision tools, stamping dies and molds, and grinding equipment. Its process is highly automated. Both hard and soft metals are used, sometimes in combination, and include aluminum, carbon steel, titanium, tungsten carbide, and even polycrystalline diamond for tools used in the construction, mining, and agricultural industries. Manufactured items are cleaned, degreased, and painted by immersion in metal dip tanks. The application states that chemical extinguishers are mounted in various locations throughout the plant. However, Mitsuki notes that Machineworks' fabricating processes pose several particularly hazardous risks, and asks her risk control representative to obtain more detailed information by conducting a site inspection. Which one of the following hazards is likely to be Mitsuki's greatest concern as a potential source of loss for Machineworks?

Volatility of its flammable liquids and their vapors Volatility of its flammable liquids and their vapors is likely to be Mitsuki's greatest concern as a potential source of loss for Machineworks, because careless handling of flammable liquids is perhaps the greatest single hazard in a metalworking occupancy.

What is the leading cause of electrical wiring fires?

WORN OUT EQUIPMENT

Which one of the following construction features of the insured building would increase the required separation distance from the exposing building?

Windows

Fire doors can protect building openings that can compromise the integrity of a fire division. They are classified by the National Fire Protection Association (NFPA) based on their ability to resist fire. To be most effective, a fire door in a fire wall must be capable of

Withstanding the same fire as the wall itself.

To receive a PPC of Class 9

a community must have the minimum facilities and practices to earn a PPC rating - score at least 70 credit points when evaluated on items from the FSRS, and have these additional minimum facilities: 1) At least one piece of firefighting equipment with a pump capacity of at least 50 gpm rated at 150 psi 2) A water tank with a capacity of at least 300 gallons

a fire walls fire rating is the same as

a fire door installed in it

To deter spread:

air tankers that dump water or fire retardants over an area, helicopters with water-scooping buckets, and bulldozers and mowers for clearing firebreak areas to help deter the spread of wildfire.

Fires spread horizontally until

all available fuel is exhausted runs out of oxygen or encounters a barrier capable of containing the heat it generates

o Defensible space

an area around a structure or wildfire prone location that is cleared of fuels (trees/brushes/pine needles) to help prevent spread of wildfire Well maintained lawn with sprinklers can be effective defensible area Some governments require creation of defensible areas to reduce risk • Without regulations, property owners who build WUI are not required to create defensible space around their properties

"Stack effect"

as heated gases escape, fresh air rushes into the lower regions, creating a draft results in total destruction of the floor the fire originated on

FEMA designates zones A & V

as special flood hazard areas (SFHA) where potential for flooding is high

Most common roof covering

asphalt shingles

• Straight through processing (STP)

automated processing of the UW transaction from initial application to policy processing

so a foundation resting on ______________ subjects a building to lower earthquake forces than one on loose soil

bedrock • Loose soil will magnify wave intensity

• According to NFPA 30, liquids with a flash point

below 100°F are Class I, flammable liquids; Class II, combustible liquids, have higher flash points

excluded due to catastrophic nature

building construction &occupancy

Burning materials release heat at different rates, measured by their

calorific value (calorie = heat required to raise the temp of one gram of water by 1°C)

building shape

can affect wind dispersion

o Man-made topographic changes

can cause floods

What is the Greatest single hazard in a metal-working occupancy

careless handling of flammable liquids • Oily metal parts are commonly washed in solvents that are highly volatile and flammable Should be stored in metal and conform to NFPA 30 flammable and combustible liquids code; kept safe distance from other ignition sources

• To reduce battery-related fire

charge them using recommended chargers in a 1) fixed 2) remote 3) well-ventilated area away from combustibles; 4) use recommended grounding and connection sequencing 5) install self-closing fire doors and auto sprinklers

the ease at which a material gives off flammable vapors when heated depends on

chemical composition, physical size, and shape

• Enhanced Fujita tornado damage scale

classifies tornado damage o Tornadoes can also be classified by wind speed & destruction they cause o More localized nature of damage from tornadoes

• Beaufort wind scale

classifies wind according to velocity Widely used as basis for maritime wind advisories Classifies winds over 73mph as hurricane force, but Saffir-Simpson is more appropriate classification for hurricanes

o Some incendiary fire losses result from the insured's decision to

collect insurance proceeds

Fire is a product of

combustion and is a form of oxidation - a chemical reaction that occurs when oxygen is combined with another substance

MERCANTILE: Ignition sources What things should we consider when analyzing a mercantile occupancy for malfunctioning wiring and electrical equipment?

consider: - age - type - condition - sufficient for the occupancy's electrical needs - how frequently it's inspected by a licensed electrician - whether wiring is compliant with NFPA 70

Ignition sources - habitational

cooking equipment overheated machinery and equipment electrical wiring should be maintained and inspected - sufficient to handle a heavy electrical load and adhere to NFPA 70

Gases produced by fires can be

corrosive, toxic, and abrasive • Abrasive - can be compared to sandblasting • Corrosive - can be compared to an acid bath

This combustion produces

dense smoke high levels of carbon monoxide sometimes other toxic gases

• Insurance Advisory Organizations: Property: Specific rate

developed by ISO field reps through a physical visit to a property and development of an individual advisory loss cause o Based on fire rate inspection during which the structural features are identified & graded according to published standards o Accessed through ISO's Specific Property Info (SPI Plus) Provides web access to a variety of reports UW can obtain a number of pieces of objective information regarding the building at that location o Relevant information from SPI Plus Loss cost quote report - RCP codes, ELA factors, BGII ISO's rating survey detail report - how ISO calculated specific loss cost Sprinklered property report - design, condition, & operation

o Airflow in fires Firestorm

develops when solids vaporize almost instantaneously, and an airflow is created that accelerates to become a powerful wind

Employees and contractors, including electricians and plumbers, can

disturb existing insulation or ductwork - so ensure all workers restore or replace all insulation disturbed after their work is done

liquids & solids generally

do not burn unless they are heated enough to convert part of the fuel into vapors.

Noncombustible, modified, and fire-restrictive building

don't burn readily, but fuel load includes combustible interior partitions & wall and floor coverings

Because of the combustibility of solvents, dry cleaning operations should be

done in a separate area that is - well ventilated - all equipment should be grounded - and lighting and other switches should be explosion proof To reduce the possibility of fire or explosion, most cleaners use a standard solvent with a flash point comparable to that of kerosene.

• To help prevent leakage

dry pipe system antifreeze solution

This point is called the

earthquake focus - where fault line movement of plates begins

o Filters can limit but do not

eliminate grease buildup

What is the most important UW consideration

establishment and implementation of strict fire codes • NFPA 704 - identification of fire hazards and materials • Other considerations: stored in isolated building, proper construction of building, vented storage area, etc.

Damage caused by flood is typically

excluded due to catastrophic nature

noncombustible

exterior walls of metal and gypsum usually made of metal which are NOT Fire resistive not close to fire resistive rating risk of collapse

o Modified fire-restrictive

exterior walls, floors, and roofs of masonry or other fire resistant materials with fire resistant rating of 1-2 hours Commonly uses reinforced concrete and protected steel for framing, load bearing walls, & curtain walls

Modified Fire Resistive

exterior walls, floors, roofs of masonry rating of 1-2 hours - commonly uses reinforced concrete - protected steel for framing - load bearing walls - curtain walls

o Earthquakes occur along

fault lines, where plates of earth's surface adjoin one another

The age of a building can affect its underwriting acceptability. Many underwriting considerations need to be taken into account when deciding whether to insure older buildings. Older buildings are more vulnerable to damage than newer buildings when faced with causes of loss such as fire, windstorm and hail, and collapse.

fire windstorm and hail collapse.

o Higher ceilings and larger openings tend to make

fire develop more slowly

• Additional occupancy hazards

o There are other hazards in which surcharges can be imposed Ex. surcharges for cooking (restaurant occupancy charge is 100%) o Additional hazards Chemicals, flammable liquid storing, highly combustible materials, dust collection, heat producing or utilizing devices, high piled stock, smoking control, cooking equipment, electrical equipment defects, housekeeping, etc.

string of volcanoes in the WESTERN PACIFIC that touches AL, HI, OR, WA

o This region is known as the Ring of Fire - only area in US significantly exposed to volcanic action

MERCANTILE: Ignition sources Smoking

o Though predominately smoke free, some permit limited smoking in designated areas Significant ignition source - access smoking policy and ensure preventative measures are in place

However, what has increased fire hazards in OFFICE occupancies?

increased use of PLASTICS in office machines, decor, and interior finishes has increased fire hazards because plastic burns easily and emits noxious gases and thick smoke when ignited

The propensity (natural tendency) of a substance to emit flammable vapors

increases with surface area of chemically identical materials of a given weight

o UW volcanic action is difficult from its

infrequency of loss & catastrophic nature

Firestop

inserted in a concealed space that prevents the passage of flame from one point to another • Used to help contain fires and increase the chance of extinguishing the flames before it spreads; used to restore the entire building via each individually penetrated partition, to its original fire-rated integrity.

o Flat roofs

insulation and ventilation can help, but water can soak through and accumulate in low areas, called ponding

o Evaluating these loss exposures (mine subsidence)

is difficult because abandoned mine shafts and tunnels are not always easy to locate - many sites weren't accurately mapped

most significant problem with pitched roofs

is formation of ice dams - melting snow/ice run down the roof and freeze near the edge which can prevent the flow of melting snow from occurring as intended

The most effective method of controlling flood losses is

is not building in a flood plain

Most common cause of unprotected openings:

is oversight during building renovations

• If fire obtains new oxygen supply

it will roar explosively to life o Ex. when opening a door to enable fresh air to get to fire o Firefighters combat by venting from above

Fee simple estate

lest complex full ownership interest in property with unconditional right to dispose of it person who owns has right to use during his/her lifetime; right passes when owner dies

Building Codes

local ordinances or state statutes that regulate the construction of buildings within a municipality, county, or state o Important to ensure contractors build to specific standards o UWs can use ISO's Best Code Effectiveness Grading Schedule (BCEGS) to evaluate effectiveness of building codes Grades from 1-10 (1 being the best aka exemplary commitment to enforcement)

o Liquids emit flammable vapors at

low temperatures

Flash point

lowest temperature at which a combustible liquid releases vapors that can be ignited by spark or flame • Determines point at which it combusts (lower= more hazardous)

o Fire doors

made of fire resistant material that can be closed to prevent spread of fire Can be used to protect building openings Classified based on their ability to resist fire To be effective, a fire door in a fire wall must be capable of withstanding the same fire as the wall itself Approved when they meet NFPA design specifications • Ranges from doors that withstand fire for 3 hours to 1/3 of an hour • Rating seal is placed on doors edge if approved • Can't be effective if it is propped open or blocked; each door must be automatically self-closing and unobstructed

Tornados: underwriters should:

manage exposure on basis of overall book of business, use predictive models, and publically available gov't data to study frequency & locations with recurring activity

o UW considerations for hurricanes Another important consideration:

managing and monitoring overall values on a book of business

• Saffir-Simpson hurricane wind scale

measures hurricane force winds o Information on past storm research regarding severity of storms

Modified Mercalli Intensity Scale

measures intensity • Intensity damage caused to people, property, and the surface of the earth - rather than magnitude • Scale is based on human observation, which is subjective and could make results imprecise - however, is a good tool for UWs to evaluate loss exposures by looking past earthquake activity

• Greatest potential resistance to seismic stress

monolithic structures of reinforced poured concrete o But, "tilt up" structures & ones made of precast concrete don't have same resistance

• Fires in larger areas generate

more fire and more heat, causing more damage than fire in smaller areas

Building Codes Performance Codes

more general guidelines and the required level of performance of the buildings local ordinance that establishes criteria that a building's structural compents must meet (after constructions)

3 hazards are NOT:

mutually exclusive The analysis of occupancy hazards is a full-time task for commercial property underwriters because building materials and industrial processes do not remain static.

o Gases burn in their

natural state

• Most of these causes of loss arise from the

nature of the operations that the business conducts

Those that burn only at extremely high temperatures (ex. aluminum) are

noncombustible - they burn only in extreme conditions

Applications

o ACORD 140, Property Section in conjunction with ACORD 125, Commercial insurance application - applicant information o Name of insured often includes generic phrase indicating the occupancy of the structure o Provide address and age of building and possible additional data regarding construction type, age/type of plumbing and heating systems, and presence or absence of sprinklers o Typically provides sufficient data only for smaller, less sophisticated property accounts

MERCANTILE: Combustibility and susceptibility of contents - ADEQUATE SPACE

o Adequate space needed for shelving, showcases, displays, and storage facilities If not, will become congested Housekeeping is important because unpacking of merchandise can generate high volume of combustible trash - trash should be promptly removed Public should be prohibited from entering storage/service areas

• Appropriate measures should be adopted to mitigate lightning loss potential

o Alarms, detection systems, emergency preparedness plans o installation of lightning protection system o interior surge protectors

Flammability and combustibility

o Almost any substance will burn if heated sufficiently to its self-ignition point

• Commercial package policy

o Also contains a "common declarations form" for the entire policy & common policy conditions

• Potential underlying causes of vandalism:

o Anger o Revenge o Envy

What is an essential component of an insurer's overall risk assessment and pricing strategies

o Applications are available that enable insurers to examine portfolio locations in relation to potential terrorist target locations and perform analyses ranging from single building deterministic scenarios to portfolio-level probabilistic loss analyses

Life tenant (life estate)

person entitled to exclusive possession of real property and all income the land produces for the duration of that person's or someone else's life terminates on death of life tenant and does not pass to his/her estate • Can be sold • Problem with life estate is the existence of 2 independent insurable interests; insurer has obligation to compensate both the life tenant and the Remainderman as though no other insurance covered the loss

Most of the fuel load in a structure consists of

personal property contained within buildings*** (ex. curtains/blinds, furnishings, business supplies)

Sprinkler leakage is difficult to UW without

physical inspection

Interior and Exterior Decoration: Underwriters must be aware of features such as

pictures, draperies, and wall hangings in a building - Unless care is taken, an underwriter might easily underestimate the fuel load of such offices -Such items add not only significant value but also potential hazards. -Foyers of some high-rise office buildings have murals, fountains, pools, sculptures, and friezes. These decorations might obscure architectural faults or engineering features such as ductwork, and they could constitute collapse or breakage hazards as well as attract vandals.

play a role in leakage

poor installation and faulty maintenance

o One cause of sinkholes is

population growth

• Pricing • Pricing

premium to be adjusted for factors the standard rate does not fully reflect

Controlling losses requires

proper design and good maintenance

• Businessowners policy

property and liability needs for small and medium-size businesses o Resemble homeowners policies in 2 ways: Way they package standard coverages Simplified rating procedures broad-basic public appeal highly competitive product that is highly automated with streamlined underwriting

o But, when estimating loss potential, most UWs should consider

prospect of total loss in masonry and frame structures

Building Code Effectiveness Grading Schedule (BCEGS

rating classification based on quality of community's building codes & level of enforcement

• First step in analyzing nature of business causes of loss

recognize their source o Understand concepts of prevention and control o For UW to have easier time establishing equitable rates, risk control measures must be applied to loss exposures

Redlining

refusing coverage in areas where civil unrest seems unlikely redlining is now prohibited as a discriminatory practice

• Higher calorific value

releases more heat and creates fires difficult to extinguish

• Remainder estate

right granted to an individual to HOLD an estate following the death of the life tenant

When examining a submission on a building more than twenty years old, some underwriters request

risk control inspections to verify the condition of key elements of the building, such as the electrical, heating, air conditioning, and plumbing systems. Risk control reports provide valuable information regarding the desirability of an account.

Failure of safety devices to prevent pressures from going beyond those anticipated what can be used?

safety relief valves are used - better solution is RUPTURE DISKS o Prevent explosions by venting excessive pressure o Should remain closed during normal operations • Because a slight variation from normal operating conditions quickly creates the possibility of an explosion, safety demands faster action than safety valves can provide o Better solution: rupture disks (disadvantage is high cost & must be repaired/replaced after use)

Where should chemical solvents for offices be stored?

should be contained in locked cabinets - for bulk supplies it should be in a separate vented fire-resistant cabinet - Employees should keep only a one-day supply of combustible liquids in self-closing metal cans. Bulk supplies of flammable liquids in manufacturers' cans should be stored in accordance with NFPA standards. A separately vented fire-resistant cabinet is preferable.

Where should the supply of combustible materials such as paper and recording media be kept?

should be enclosed in metal file cases or cabinets

Joint tenancy

similar to fee simple estate, but 2 or more people hold title to property concurrently owned and undivided interest in an estate that transfers to a surviving joint tenant upon the death of the other • Determine insurable interest of each joint tenant • Doesn't present special problems for UWs

INSTITUTIONAL": 2) Fuel load and combustibility and susceptibility of contents

similar to habitational occupancies, have fuel loads comprised of: - furniture - clothing - equipment $ appliances - bed linens - flammable liquids - gases - grease build up - trash

when water is drawn out

sinkhole forms Also generally caused by underground rivers & streams

• The rate at which an object absorbs heat depends on the

size and intensity of the original source - size, shape, and color; and distance between source and object o Darker materials absorb more heat

• General rule

solids conduct heat more efficiently than gases

Evaluating this loss exposures requires

sound knowledge of local topography demographic trends

o Presence of chemicals and flammable liquids/metals demand what?

special attention to the fire suppression systems used

Tenancy by the entirety

special type of joint tenancy available only to husband and wife; through rights of survivorship, upon the death of either, the other takes title to the whole • Only recognized in some states; minimal UW impact

What affords best protection for high rack storage?

sprinklers

o The conditions that create friction also produce

static electricity

• Large expanses of glass require

storm shutters or even all areas exposed by glass for effective protection

MANUFACTURING - Ignition Sources To help prevent power heat source losses

strict adherence to fire safety codes employee training to follow maintenance schedules vigilance in recognizing situations that could cause a fire

Floor openings for electricity, plumbing, and HVAC need

tight firestops

Roofs with large, open spans are more likely

to collapse under a snow load

o An earthquake subjects structures to

to horizontal stress not planned for in their design.

o Pitched roofs can help resolve the problem by allowing the structure

to shed some of the load

Most common effect of tornados:

total destruction of property lying directly in their path

• Combustion explosions

type of violent gas expansion that occurs when a flammable cloud (dust, vapor, or mist) reaches an ignition source

Fire can be classified base on what?

types of fuel sources *- proper classes of fire extinguishers and suppression systems should be used

Combustible materials burn at

typical fire-condition temperatures but do not ignite readily

____________ can mostly resist an earthquake

• Properly built frame structures of up to 2 stories o Strong propensity to flex and absorb shock o Load- bearing vertical members of foundation must be tied; walls need firm bracing with diagonal bracing

Mill construction

uses heavy timber for columns, beams, supports, and absence of floor joists (so no hidden spaces for fire to spread) • Characteristics: o Minimum of 2 hour fire resistance rating on bearing walls o Wood columns that are at least 8 inches thick on every side o Wood beams, supports & ties at least 6 ins wide or 10 ins deep o Floors that are tongue and groove planks and at least 3 inches thick with a 1 inch overlay and roof decks that are on heave timbers with at least 2 inch thickness • Important underwriting perspective: o Heavy floors without concealed spaces constitute a fire stop to slow the spread of flames o Heavy timbers of the beams and columns give the building great structural strength; reducing possibility of collapse • Very expensive and rarely used today; but construction would survive a severe fire • Primarily found in Northeast or occasionally western states

What is an important indicator of business success?

vacancy rate For example, because the lodging industry relies on seasonal, cyclical business that may vary greatly from year to year, moral hazard may be associated with hotel and motel owners who are unable to maintain a consistent, profitable occupancy rate.

stray particles that evade the system must

vacuumed (sweeping is NOT more effective)

What is an alternative to the above?

venting/insulation/isolation is alternative

Most structures are designed to carry a

vertical load (weight & contents)

Inept fire suppression can result in heavy or total losses from

water damage

Dust is hazardous and potentially explosive when

when airborne (ex. metal dusts)

Compactors located outside building are beneficial

• Quick, easy means of disposal in a closed, fire restrictive receptacle • Removes air pockets, which limit supply of oxygen available to a fire • Better to operate on regular schedule o Daily compacting is a minimum requirement for standard risk • Loose trash will burn more easily than compacted trash

Ways to increase strength of building envelope:

• Roof anchors that can withstand specified wind speeds • Tying entire structure together to increase strength • Windows, doors, and other planned openings need adequate protection • Cladding (the material that makes up roofs & walls) that resists wind damage

NFPA 70 National Electrical Code

• Specifies wire sizes and installation procedures

Describe the threat of high-rise office buildings

• Subject to hazards related to the occupancies with which they share their quarters, such as apartments, restaurants, and hotels • Upper floors are beyond reach of fire department's aerial equipment

How to control Storage areas for surplus furniture, mattresses, and other items

• These rooms should have sprinklers and be separated by fire walls in properly enclosed noncombustible rooms

Some industrial equipment generates enough heat to cause sprinkler heads to activate & inadvertently discharge

• To prevent: high-temperature heads with heat sensing elements that actuate at 180°F or more

Underwriting Considerations for Lightning Loss Exposures

• Trained observers cannot always distinguish between damage caused by fire and damage initiated by lightning

have little resistance

• Unreinforced masonry structures o Walls carry vertical load without additional support

o Is a covered cause of loss in most commercial property forms

• Volcanic action

UW considerations for cause of collapse

• Weight of ice, snow, or sleet o Covered cause of loss on both Broad Form & Special Form

most damage comes from this hurricane damage

• Wind

o Horizontal spread Openings that can spread fire horizontally:

• Windows and doors • Ducts - that penetrate walls (heating, ventilation, AC are designed to spread air and therefore can help spread fire) • Conduits - electrical equipment and lines, especially metal • Partition walls - fire can spread above and below them • Plenums - suspended ceiling in which concealed spaces above the ceiling are used to bring air back to the heating or AC system; facilitates the spread of heat, smoke, and hot gases when a fire occurs

MANUFACTURING - Ignition Sources o Heat treatment processes

"combination of heating and cooling operations applied to a metal or alloy in the solid state to obtain desired conditions or properties" Furnaces, oil quench tanks, molten salt baths as primary ignition sources Area should be kept free of combustible materials; tempering vats containing oil to quench/rapid cooling of metal objects • Vats should be hooded, have temp controls, self-closing covers, and overflow pits with drain

o 2 ways pressure vessel can explode if fire reaches it:

(1) the vessel's contents, already under pressure, will expand as heat from the fire drive the temp up (2) heat will cause noncombustible materials to weaken; as internal pressure increases, ability to contain it diminishes

INSTITUTIONAL": How is the arrangement displayed?

Arrangement is also vertically along walls

Fuel Load and the Combustibility and Susceptibility of Contents

Arrangement of fuel load is unique and presents problems in fighting fires Mercantile and industrial occupancies distribute fuel load horizontally which helps slow to spread of fire Heated gases tend to move away from fuel load as they rise - in dwellings large open areas are important - As a result, major portions of fuel load are arranged vertically along the walls; tall furniture, windows, curtains, and drapes all contribute to vertical fuel load - This allows fire to travel upward more rapidly. Distributing the fire horizontally

How can we mitigate heavy fuel loads in OFFICE occupancies?

Asses housekeeping measures, or offsite storage to mitigate risk

o Others are crimes directed against the property owner

Automatic fire sprinklers can offer effective protection; security

What can be used to protect gas-fired domestic ranges?

Automatic flame failure relays should protect gas-fired domestic ranges Those relays will prevent an explosion if an office employee carelessly permits the water to boil over, thereby extinguishing the flame in a gas burner. Employee cafeterias often have the characteristics of a full-scale restaurant, and the underwriter must evaluate them as such.

o Contributing factors to spread of wildfire:

Availability of fuel to burn Weather conditions at time of ignition (high temps and lack of humidity) Wind velocity (high winds can fan flames and send burning embers long distances) Slope of land (steep slopes = more rapid spread) Availability of access roads

What is a concern pertaining to buildings with an OFFICE occupancy?

Buildings with substantial remodeling are a concern - increased electrical loads placed on old wiring & modifications are often given little attention by officials - UW should be familiar with: 1) age 2) type 3) condition of an office's wiring and electrical equipment **particularly computer systems***

• Flame spread o Rapid fire spread

Can spread flames almost instantaneously over a large horizontal area

How to mitigate incendiary fire losses

Careful analysis of insured's 1) financial condition 2) business history might disclose a potential moral hazard

MANUFACTURING - Ignition Sources o Welding and cutting operations

Cause fires from sparks and hot slag deposited on combustibles Control - part of production process and performed at fixed location • Severe hazard lies in mobile exposures • Comply with NFPA 51B for welding/cutting/other hot work

SERVICE Smoking

Cigarette smoking - even if patrons are forbidden from smoking, employee still may do so Be aware of policy and no smoking signs and safe receptacles for ashes

o Oxygen-rich atmospheres

Common in hospitals but also found in gas welding/brazing/cutting work Elevated levels of atmospheric oxygen LOWER the self-ignition points of all substances and increase the rates of heat release in any fire (spreads faster)

Contents arranged _______________ will burn more readily

Contents arranged VERTICALLY will burn more readily than those spread out horizontally because fluids RISE when heated

• Water damage UW considerations

Covered losses: accidental discharge, overflow, leakage of water/steam as a direct result from breaking apart or cracking of plumbing, heating, AC, etc. Damage caused by flood is typically excluded due to catastrophic nature

What has effectively reduced the number of electrical fires in recent years

Development and enforcement of fire safety codes

o Determining extent of damage by an earthquake

Distance from epicenter Soil composition Building design and construction

What is the key to analyzing air supply?

Draft areas define the boundaries of space from which a fire can draw atmospheric oxygen • Similar to a fire division - sealing the airflow through vertical openings (ex. stairs) effectively creates a separate draft area

o 2 factors that influence amount of heat damage a building and its contents will sustain:

Duration of fire Size and shape of area

What is the biggest concern for heating and air conditioning for a habitational occupancy?

Electric forced heat - biggest concern is overflow of water from sinks, toilets, and bathtubs

o Radiation

Electromagnetic phenomenon that transfers heat by moving particles equally in all directions from the source

• Risk control surveys and reports Essential UW skill is to

Essential UW skill is to *properly interpret a diagram* • Includes info about: 1) structure 2) fire protection 3) internal processes

SERVICEo Welding and cutting operations

Ex. auto repair shops or self-service stations that might have acetylene tanks to provide gas for welding and cutting Best control - limit welding and cutting to an area isolated from gas & vapors

SERVICE: o Heating processes

Ex. dry cleaners and laundries which require a stabilized boiler that should be in a separate room fully isolated from the premises by firewalls • Also, hand irons, dryers, mangles, presses Equipment should have: - "on-off" warning lights - be properly grounded - have master cutoff switches Also watch for steam pipes - should be insulated

MANUFACTURING - Ignition Sources Power Heat Sources

Ex. electric motors, steam pressure vessels, and turbines Can be direct drive electric motors, steam powered engines, turbines with belts and shafts, or internal combustion engines • Electric motors - be proper size and type for their intended use; clean, well lubricated, and routinely inspected • Steam power - controlled pressure so boiler doesn't explode; safety pressure release valve; insulated pipes, lubricated bearings • Internal combustion - clearance between exhaust stack and combustibles; free from weeds/trash because they commonly run underground; fuel tank secured; properly vented area

OFFICE: • Special hazards of the class or risk o Computer systems are another special hazard UW consideration

Fire will result in heavy loss Separate room for network servers and other larger computer systems should be kept clean, air conditioned, and under strict supervision Supply of combustible materials (paper and recording media) should be enclosed in metal file cases or cabinets Threat of high-rise office buildings • Subject to hazards related to the occupancies with which they share their quarters, such as apartments, restaurants, and hotels • Upper floors are beyond reach of fire department's aerial equipment

• Atmospheric oxygen

For substance to burn, flammable vapors must mix with oxygen in a proportion that will support combustion

most common cause of sprinkler system leak

Freezing usually as the result of heating system failure

o Waste and trash

Good housekeeping is a means to control this exposure; includes: • Adequate receptacles (container) • Safe storage on premises • Orderly procedures for collection • Frequent removal of trash

MERCANTILE: Fuel Load What is a vital source to mitigate fuel load?

Good housekeeping is vital - with emphasis on: 1) timely trash removal 2) safe organization of stock areas

o Vertical spread

Heated gases rise so vertical spread of fire from one floor to another occurs more readily than horizontal spread

o Analyzing air supply

Helps determine potential severity of fire losses

MERCANTILE: Fuel Load Substantial Space What can aid the spread of fire and hinder firefighting efforts?

High rack storage can aid the spread of fire and hinder firefighting efforts

What provides effective protection against fire losses in cooking equipment?

Hood & duct fire suppression systems use wet chemical extinguishing methods to provide effective protection against fire losses in cooking equipment • Ansul systems (automatic systems) disperse an extinguishing agent suited to class K fires

When is leakage hazard increased?

If building has sprinklers or standpipes, leakage hazard is increased

o 3 standards to evaluate wind exposures:

In US, wind speed averages are measured over a 2 min period (international standard is 10 min average) Weather services measure wind at standard height of 10 meters (30ft) Anemometers, record wind speed, must be positioned on a flat area

o UW considerations for hurricanes

Key: building code enforcement Airborne debris can smash glass (large expanses of glass) Cantilevered walls - free standing walls that have no lateral support at the top Building Code Effectiveness Grading Schedule (BCEGS) managing and monitoring overall values on a book of business

• Volcanic eruptions Cause 3 types of insured losses

Lava flow Volcanic ash Volcanic blast/airborne shock waves

How to protect multistory, fire-resistive buildings

Life and property protection require self-closing fire doors fire walls in stairwells and elevator shafts • Escalators - no firewalls for aesthetic reasons, but auto sprinklers

o Convention

Mass movement of heat within a fluid (liquid or gas) caused by the expansion of heated material - heated fluid becomes lighter and rises

another leading cause of leakage

Mechanical damage

What poses the most serious and obvious danger?

Molten metals but many industries handle fluids at temperatures high enough to support combustion

What is a common source of dangerous friction

Moving machinery parts proper maintenance and lubrication is necessary

What can mitigate its force

Nothing can mitigate the force Only practical way to avoid is to refrain from writing insurance in those states or adjoining states to avoid collateral damage Alternative - coverage with sublimit; surplus lines using DIC form

What is the greatest fire threat for a nursing home?

Nursing homes have kitchens, which along with clothes dryers, pose greatest fire threats

o Even when ISO assigns a single PPC rather than split, a property may still have a PPC worse than the whole community for one of these reasons:

Property might be exposed to fires that are more challenging than fire service is equipped to handle, such as those involving flammable metals Fire service might lack adequate year-round access to the property, especially when the property owner maintains private access roads

What often does greater damage than direct action of wind

Rain

What provides insight in preparing for future storms

Reviewing damage from previous hurricanes

Fire Suppression Rating Schedule (FSRS) 2 major sections

Section I: Public Fire Suppression • Establishes a town class rating; applies to all class-rated properties and schedule-rated properties that require a water flow of 3,500 gallons per minute (gpm) or less for fire suppression Section II: Individual Property Fire Suppression • Develops a public protection classification that applies to individual properties that require a water flow of more than 3,500 gpm

How can we avoid freezing of plumbing?

Should be insulated to avoid freezing

Risk control measures for heating and air conditioning for a habitational occupany?

Should be properly installed and maintained

Where should flammable paints, refinished fluids, and cleaning solvents be stored?

Should be stored in metal, enclosed lockers Spray paint - kept in clean and ventilated shops and done only in an approved spray booth

Temperature required for combustion

Temperature required for combustion decreases as atmospheric pressure increases

INSTITUTIONAL: Plumbing How can we maintain and protect the plumbing systems?

Trained personnel should perform routine flow and pressure tests Equipment should be protected from freezing in unheated areas

o Conduction

Transfer of heat from one mass to another by physical contact Fire on one side of an object will transmit heat by conduction to the other side and to any other object in contact with the heated material Also enables fire to pass through solid objects like walls and break out on opposite side

o Cooking equipment

USFA cites cooking as the leading cause of accidental, nonresidential fires in recent years

• Wind speed o Factors that affect wind

Velocity increases with height Topography - wind moves over open water and flat terrain at a uniform speed;

• Direct damage by this is covered by commercial property forms

Volcanic blast/airborne shock waves

Lighter solids are

more combustible than heavier materials with same chemical composition

The National Flood Insurance Program (NFIP) provides up to what maximum amount of insurance to property owners in special flood hazard areas?

$1,000,000

o In more fire resistant structure,

, estimate time required for fire to destroy the structure

• Insurance Advisory Organizations: Property: Class rate

(specifically scheduled) - rate that applies to all insureds in the same rating category or class; applies to an entire category of similar accounts and doesn't vary based on specialized features o Each class is categorized based on construction type and occupancy o Found in insurer's manuals

Explain how underwriters can use the following sources of construction information to help them make more informed underwriting decisions on commercial property accounts:

- Applications - Insurance advisory organizations - Risk control surveys and reports - Building codes

Regarding the combustibility and susceptibility of contents in habitational occupancies, all of the following statements are true

- Because hot gases concentrate just below the ceiling, losses develop more quickly, and flashover becomes a more serious concern. - Tall furniture, window curtains, and drapes all contribute to the vertical fuel load. - Fire service response time and automatic suppression systems might be more important in habitational occupancies than in other types of occupancies.

MANUFACTURING - Ignition Sources

- Electrical equipment and wiring - Friction and static electricity - Power Heat Sources - Welding and cutting operations - Heat treatment processes

Describe the key MERCANTILE occupancy underwriting considerations relevant to commercial property insurance. - includes buildings, or a portion thereof, which are accessible to the public and used for the display and sales of merchandise - combustibility varies by the type of stock sold

- Ignition sources - Combustibility and susceptibility of contents - Fuel load

Describe the key INSTITUTIONAL occupancy underwriting considerations relevant to commercial property insurance. schools, churches, hospitals, and property owned governmental entities, public housing, nursing homes, prisons, police/fire stations

- Ignition sources - Fuel load and the combustibility and susceptibility of contents - Oxygen and gas hazards - Plumbing - Heating systems

Key elements for fire protection planning

- Schedule for regular inspection of all fire protection equipment - Evacuation plan - Training

o Heat and power - Protocols

- Store and refill tanks outdoors - maintain aggressively - immediately replace

What effectively protects against Spontaneous ignition (spontaneous combustion)

- Storing organic materials in low piles - limiting supply of oxygen effectively protects against this

To qualify for a PPC of Class 8 or better

- a community must meet certain minimum facilities and practices to earn a PPC rating - score at least 20 credit points when evaluated on items 1) A water system capable of delivering a minimum water supply of 250 gallons per minute (gpm) at a fire site for two hours 1) At least one piece of firefighting equipment with a pump capacity of at least 250 gpm rated at 150 pounds per square inch (psi)

Risk control measures

- assess account's risk control measures - look for signs that premises are resistant to these causes of loss - o Fire is significant component of riot/civil commotion so automatic fire sprinklers can be important during a civil disturbance o Premises security, locks, fences, gates can control losses

Ignition sources

- cooking equipment is the leading cause of habitational fires - other common sources include overheated machinery and equipment (clothes dryers, lint accumulation, malfunctioning appliances, faulty wiring) o Ensure that electrical wiring is maintained and inspected - should be sufficient to handle a heavy electrical load & adhere to NFPA 70 National Electrical Code o New construction usually conforms to current building codes, but converted buildings might include renovations that do not (older buildings require closer analysis) o Smoking materials (cigarettes, cigars, etc.) Management can never sufficiently control the incidence of smoking and other hazardous behavior UW must therefore focus on structural characteristics that limit damage; assess smoking policy; preventative measures in place; smoke detectors and sprinklers o Intentionally set fires (not all are necessarily related to moral hazard) Financial stability of owner is important; vacancy rate

What can an UW do in terms of smoking materials for ignition sources?

- management can never sufficiently control the incidence of smoking and other hazardour behavious - UW must therefore focus on structual characteristics that limit damage 1) assess smoking policy 2) preventative measures in place 3) smoke detectors and sprinklers

MANUFACTURING - Ignition Sources UW factors with electrical, heating, and cooling equipment

- number - type - age - condition - ongoing inspection - maintenance

MANUFACTURING - Ignition Sources What can generate excess heat or friction?

- overheated - inadequately lubricated - poorly maintained machinery

What can be introduced to help reduce loss of property and lives by wildfire?

1) building codes 2) zoning laws 3) other governmental actions

In regards to chemical hazards, UW should be trained to identify:

1) chemical hazards 2) determine adequacy of storage 3) handling 4) processing operations

All of the following are major elements of private fire prevention

1) control of housekeeping 2) adherence to building codes and standards 3) fire protection planning

Burning plastics:

1) emit poisonous gases 2) generate intense heat 3) produce heavy black smoke

To prevent accidental ignition

1) ensure it is properly installed 2) used, 3) maintained 4) proper insulation 5) adequate clearance from combustible materials 6) space for air circulation around and ducts and flues

Factors considered in evaluating the fire service rating include all of the following

1) equipment of the fire engine companies 2) fire personnel training 3) geographic distribution of fire engine companies

Measures taken that can reduce fire losses:

1) improving housekeeping 2) enforcing rules for handling hazardous substances 3) controlling ignition sources 4) conduct frequent inspections

• Ways to control molten metal combustion?

1) insulation 2) containment 3) clearance between equipment containing hot fluids and combustibles

What can help reduce damage and destruction from wildfire hazards?

1) insurer programs 2) loss mitigation efforts

Hot work is typically confined at a fixed location FIRE SAFTEY..

1) isolate combustibles 2) provide safe place for completed work to cool

Risk control survery might not be feasible for reasons such as:

1) low premium 2) location of account 3) time constraints

Four basic compents of a fire tetrahedron

1) oxygen 2) fuel 3) heat 4) uninterrupted chain reaction

Office - Ignition Sources

1) primary sources of fire: faulty or malfunctioning wiring 2) and electrical and lighting equipment 3) incendiary fires and fires of suspicious origin - consider moral hazard

To insure, institutional occupancies what are commonly used:

1) risk retention groups 2) municipal pools 3) alternative risk transfer

IF gas is stored in underground tank, tank should be

1) tight fitting to prevent leakage 2) should have vents for discharging vapors during filling

Certain institutional occupancies present unique property risks due to the nature of their operations. Which one of the following is most likely to be a unique property loss exposure with respect to a church?

A church's heating system is most likely to present a unique property loss exposure, due to infrequent use. For example, a church's thermostat is often turned down or off between services and is then raised before the church service, and this forcing of an excessive amount of heat could result in a boiler explosion or fire.

Village Manor is a one-story 70-bed long-term care nursing and personal care facility, with a rehabilitation wing for ill and injured residents of all ages. The building is of fire-resistive construction, fully sprinklered, and meets all current code requirements. Many of its residents are on oxygen. Although Village Manor has a strict non-smoking policy, the staff has occasionally discovered both residents and visitors smoking. Village Manor permits visiting family members to join ambulatory residents for meals in its dining room, and it also offers full laundry service to its residents. A property underwriter is likely to find the greatest fire threat for Village Manor to be

A kitchen fire presents the greatest fire threat for Village Manor, because cooking facilities are the primary cause of fires in nursing homes.

Municipalities often update building codes but usually exempt current buildings from having to comply with these changes because of a grandfather clause. However, if such a building is damaged beyond a certain percentage, the building must be brought up to current code standards when it is repaired. Underwriters refer to this type of building as which one of the following?

A nonconforming occupancy

Specific construction information is available from a number of sources, which enables underwriters to make informed decisions on commercial property accounts. From which one of the following sources will an underwriter most likely learn the construction type of the building for a mid-size commercial account?

Application

Underwriters can use the Beaufort Wind Scale for reference purposes and to assess strong windstorms. Which one of the following is the most widely used basis for the Beaufort Wind Scale?

As a basis for maritime wind advisories

Fire prevention

Conducting frequent inspections and controlling ignition sources

The keynote speaker at a public safety seminar, Aaron Sanders explains that heat spread is often mysteriously misunderstood and is based on a variety of factors. As an example, Aaron lights a candle and notes that it burns from the top down. Which one of the following terms best describes this transfer of heat?

Conduction

Which one of the following forms of heat transfer requires physical contact?

Conduction

Workplace smoking policies and equipment cleaning schedules help achieve which one of the following major objectives of effective housekeeping?

Controlling ignition sources

Effective housekeeping accomplishes three major objectives:

Controlling ignition sources Eliminating unwanted fuel loads Removing obstructions

BabyLearn Corporation manufactures toys for infants and toddlers. Its two main product lines are nondestructible plastic toys, and wood products such as puzzles, blocks, and shapes that fit together. Its operations are housed in fully sprinklered fire-resistive buildings. The raw plastic components are manufactured in one area, wood components in another, and final assembly is completed in yet another. Each area is separated from the others by fire divisions. The plastics operations include cast-molding, cutting, and melting of raw materials to form the finished toy components. The wood operations include cutting, treating, assembly, and painting. While all of the following risk characteristics are important to consider, which one is likely to be of most concern to a property insurance underwriter that is evaluating BabyLearn Corporation's account?

Fire and explosion risk related to flammable plastic dust particles generated by the processing operations

A fire call box system is an example of which one of the following?

Fire detection

Sometimes called disaster planning

Fire protection planning

Insurance Services Office (ISO) uses which one of the following items to evaluate the fire protection services of communities?

Fire suppression system quality

most common source of a boiling liquid-expanding vapor explosion?

Fire that reaches a tank containing flammable liquid or gas

In manufacturing occupancies, a heat treatment process is a combination of heating and cooling operations applied to a metal or alloy in the solid state to obtain desired conditions or properties. Which one of the following represents a significant ignition source associated with heat treatment processes?

Furnaces represent a significant ignition source associated with heat treatment processes.

o Heat and power: MOST SERIOUS HAZARD

GASES THAT ARE BURNED AS FUEL (NATURAL GAS) • Natural gas is colorless and odorless - difficult to detect leaks

are enough to eliminate almost all instances of leakage caused by freezing

Good management & prompt attention to

Identify the following major categories of occupancies and the key factors underwriters should consider when analyzing occupancy hazards:

Habitational Office Institutional Mercantile Service industry Manufacturing

Hamilton Gallery is a retail store that sells furnishings and fixtures, and many decorative items, for both home and office. Much of its stock is of modern design, with lots of metal and glass. Restocking of its displays is done after hours, when customers are not in the store. Hamilton Gallery is located in a one-story masonry noncombustible structure specifically designed for retail occupancy. There are separate areas for offices, an employee break room, and storage of inventory, which are separated from the customer-accessible store space by fire walls. The store area has customer restrooms, a seating area for salespeople who are awaiting customers, a play area for children including game tables and two video game modules, and a cafe with several small tables and chairs where customers are served beverages and light refreshments. Which one of the following is likely to be a key consideration of a property underwriter who is evaluating Hamilton Gallery's hazards?

Housekeeping practices is likely to be a key consideration of a property underwriter evaluating Hamilton Gallery's hazards, because good housekeeping is the most vital deterrent to fires related to the hazards described.

Windstorm and hail are difficult causes of loss to underwrite. To limit the consequences of losses that might occur as a result of these perils, the underwriter must first

Identify susceptible geographic areas with this exposure.

Tobias, an underwriter, is evaluating a property insurance submission for Harbinger Corporation, a textbook printing company. Tobias notes from Harbinger's description of operations that it seems to have a well-run operation. It uses heavy-duty equipment and machinery for printing, drying, cutting, assembling, and binding textbooks. Chemicals and solvents are used in its printing processes. Raw stock printing paper is stored in a separate fire division, with a large supply transferred to pallets in the printing area each morning for that day's production needs. Unfortunately, it nevertheless sustained a severe fire loss last year, which was caused by an electrical short in its processing equipment. The fire quickly burned out of control and caused substantial loss to stock and equipment, as well as the structure's interior. Significant smoke and water damage increased the total damages. Fortunately, employees were safely evacuated, and no one was injured. Tobias has reservations about quoting Harbinger's account because of the loss, but agrees to provide a quotation subject to Harbinger's compliance with a risk control recommendation, which is most likely to be

Implementation of a planned inspection and preventive maintenance program for all wiring.

Which one of the following statements is true regarding external exposure evaluation?

In evaluating external exposures, an underwriter should consider construction deficiencies of the insured building.

Regarding airflow in fires, which one of the following statements is true?

Inadequate airflow produces a rich mixture containing too little oxygen, eventually smothering the fire.

Underestimating a business income loss exposure can have serious consequences for an insured. Which one of the following methods is often used by underwriters to safeguard against underestimates?

Increase the business income probable maximum loss by a selected percentage

Which is the most likely category to cause a property underwriter to question the possibility of adverse selection?

Institutional Occupancies

Building codes can provide an underwriter with information regarding the construction of buildings erected under the provisions of those codes. Well-designed and properly enforced building codes can reduce insured losses. A local ordinance that establishes criteria that a building's structural components must meet is a

Performance code

Which one of the following types of detectors responds to the presence of smoke particles in the air and sounds an alarm when smoke in the air scatters light onto a light-sensitive element?

Photoelectric cell smoke detector

In order to deter arson for profit, the work of an arson squad must be coordinated with

Police department and district attorneys.

Most serious exposures arise from these

Portable heaters can cause accidental fires - portability makes controlling this exposure difficult • Critical to maintain 1) adequate clearance 2) safe design 3) limiting use to unheated spaces free of combustibles • Safe design - ex. low profile and safety device that shuts off if it leans too far from a vertical position

The Ralok Corporation recently suffered a direct fire loss to its property and will be out of operation for several months. The business wants to reduce as many of its expenses as possible during this period. Which one of the following expenses would be most difficult to reduce immediately?

Property taxes Payroll, utilities, and postage all present opportunities for immediate expense reductions. However, it takes time to obtain property tax reductions, if they can be obtained at all.

UWs can use ___ to ensure maintained sprinkler protection

Protective Safeguards endorsement • Endorsement specifies that a property is protected by an automatic sprinkler system and states fire coverage is automatically suspended if insured knows sprinklers aren't operation and fails to notify insurer

Which one of the following statements is true regarding the peril of collapse?

Some buildings have collapsed from the cumulative effect of vibration.

In which one of the following ways is a fire able to burn without atmospheric oxygen?

Some fuels obtain their oxygen supply from other substances, including most common firefighting materials.

exothermic reactions

Some industrial processes require combinations of chemicals that react by releasing energy, usually in the form of heat. Heat from these exothermic reactions, as they are called, is not absorbed by its surroundings. Although these exothermic reactions are essential to the industrial process, they become self-sustaining and potentially uncontrollable, creating a fire hazard.

If a building floor is damaged by the weight of people, but the damage does not meet the definition of collapse, which coverage form would cover the loss?

Special form

Miller's Furniture stores a large selection of furniture in a local warehouse, separate from its retail store, so that it can deliver on its promise of next day delivery to its customers. There is a shop with tools and equipment in the back of the warehouse, where its employed craftsmen can repair, refinish, or re-upholster damaged furniture for sale in its outlet store. These warehouse employees mend broken wood furniture; fix scratches and apply stain, paint and varnish to wood furniture; replace cushions and mend torn upholstered furniture; and weld broken or bent metal furniture. The physical hazards presented by Miller's furniture warehouse are best described as

Special hazards of the risk.

Salvage team

Specialized fire service personnel who are trained to minimize property damage caused by water used to suppress a fire.

Which one of the following processes occurs when combustible material ignites without heat from an external source?

Spontaneous combustion

What is the most hazardous finishing process?

Spray Painting • Should be done in well ventilated area or in an approved booth; electrical fixtures should be explosion-proof; booth kept clean • Dip tanks made of metal and secured to prevent overturn • Chemical extinguishers kept close to dip tank or spray booth • Store paints/oils/solvents in metal lockers with tightly fitting covers

In the event of a fire, what will evacuate smoke-laden air from the building and replace it with fresh air from outside?

State-of-the-art ventilating systems will, in the event of fire, evacuate smoke-laden air from the building and replace it with fresh air from outside. Those systems assist firefighting in several ways. They enhance human life safety because residents will not become disoriented or overcome by fumes and can therefore evacuate the premises in a swift and orderly fashion. That evacuation relieves fire service personnel of the need to mount a massive rescue effort and allows them to attack the blaze as soon as they arrive. In addition to removing smoke, ventilating systems also vent heat and products of combustion, helping to reduce the intensity of the fire. This venting more than offsets the effects of the fresh supply of oxygen that it introduces to the fire. Lower temperatures and clearer air aid the efforts of firefighters, as they reduce the need to rely on protective gear and self-contained breathing apparatuses.

What is the most effective control for chemicals that may ignite a fire?

Storing & using reactants in different locations is most effective control, but is not always feasible so venting/insulation/isolation is alternative

While not all heat sources are ignition sources, many of the heat sources present in manufacturing occupancies, such as electric motors, steam pressure vessels and turbines, pose significant potential ignition sources. The potential for fire due to the use of heat sources and the presence of flammables requires

Strict adherence to fire safety codes.

Which areas of the United States suffer the most tornado damage?

The Great Plains and the Southeast

The ISO Public Fire Suppression town class rating applies to all class-rated properties and to schedule rated properties that require a water flow of

The ISO Public Fire Suppression town class rating applies to all class-rated properties and to schedule rated properties that require a water flow of 3,500 gallons per minute (gpm) or less.

Underwriters should read reports of a storm's destructive power carefully. Information on past storm research regarding the severity of storms uses which one of the following wind measurement scales?

The Saffir-Simpson Hurricane Wind Scale

Heat Spread

The amount of fuel in the proximity of the heat determines the outer boundaries of a blaze. As a fire spreads, it transfers heat from burning fuel to nearby combustibles via 1) conduction 2) convection 3) radiation.

Windstorm and Hail

The design of roof surfaces in the past did not include such features as self-sealing shingle tabs, which are commonplace today

Which one of the following best describes the potential effect of catastrophic exposures on business income PML?

The effects of catastrophic exposures can be significant even if there is a relatively minor direct loss.

The fire service component of the ISO Fire Suppression Rating Schedule considers

The equipment of the engine companies.

Friction

The heat and static electricity generated when two surfaces rub together.

If the city of Newburgh had a public protection class of 5, what is the best public protection class that could be received by an individual property in Newburgh?

The highest public protection class that could be received is 5.

Which one of the following would be considered by an underwriter to increase the likelihood of fire?

The insured's inexperienced maintenance staff performs the annual maintenance work on the heating equipment.

Which one of the following is the most important consideration in estimating how much damage a fire will cause?

The length of time it burns

The approach to measuring tornadoes is by evaluating the damage they cause. The Enhanced Fujita Tornado Damage Scale was developed in the mid-2000s and reflects

The more localized nature of damage from tornadoes.

Regarding fire service ratings, which one of the following statements is true?

The number of credits needed to achieve any specified classification varies with the resources devoted to the water system, fire service, and fire alarms.

Which one of the following statements about the business income coverage of Businessowners Policies with an actual loss sustained coverage feature is true?

They usually contain a time limit, but no coverage dollar limit.

Many institutional occupancies present unique occupancy hazards, as well as obstacles to fighting fires and controlling losses. Another prime underwriting concern is that older buildings are common among institutional occupancies. When analyzing the hazards associated with institutional occupancies, an underwriter should evaluate whether operations conform to the requirements established by the National Fire Protection Association's NFPA 51B with respect to

When analyzing the hazards associated with institutional occupancies, an underwriter should evaluate whether operations conform to the requirements established by the National Fire Protection Association's NFPA 51B with respect to WELDING.

Mia is underwriting insurance for Weyville High School. The application shows that the high school facility is a two-story structure with a large cafeteria that uses electrical cooking appliances; a gymnasium; an auditorium for school plays, student assemblies and parent meetings; an art room; and fully equipped science laboratories. The school offers a number of extra-curricular activities and clubs, including art; the sports of basketball, football, lacrosse, baseball and soccer; drama and performing arts; photography; culinary arts; band and choir. Mia requests a risk control site visit in order to properly assess the account risk. Which one of the following areas of Weyville High School is Mia most likely to specifically remind her risk control representative to address?

While these are all typical risks for a large high school, a particular ignition source that an underwriter should note is the theatrical lighting used in many school auditoriums. Weyville High School offers drama, band and choir and presents school plays in its auditorium, so careful attention should be paid to its auditorium and the use of theatrical lights.

Wildfires differ from fires in heavily populated areas in which one of the following ways?

Wildfires can ignite and develop into significant fires long before they are detected.

• Longer duration allows a fire to attach

firestops and involve adjacent fire divisions

To develop an effective pln:

first step is becoming familiar with applicable codes

wet-cell batteries produce

flammable gases while recharging which can ignite from the heat of a stray spark

the principal way hurricanes cause damage

flooding

MERCANTILE: Ignition sources What should the UW focus on in mercantile occupancies in supermarkets, retail store restaurants and shopping mall eateries?

focus on: - age - type - condition of all food preparation equipment - cooking appliances - refrigeration systems - regular maintenance is critical - UW should note whether electrical or gas appliances are used

Rapid fire spread occurs when

fresh supply of oxygen is suddenly introduced; when atmospheric combustible are present or when flashover occurs

• Florida Building Code 2002

from Andrew; standards for building & roof construction to reduce potential structural damage

Losses occur when heat escaping from the building melts snow

from the bottom, forcing water to flow under built up snow and ice on the roof - but having insulation above top floor ceiling limits amount of heat escaping & ventilation disperses the heat before it can cause melting • Can only be implemented when roof is being built or replaced

• Vaporization rate

gases liquids solids

o Depends more on evaluating

geographic location characteristics of contents structure housing the contents Spread of risk Risk control measures

One of the most effective fire prevention techniques is

good housekeeping

Combustible dust What is a particulary volatile dust?

grain for flour dust bakeries - accumulation of floor dust

o Welding, brazing, soldering, and cutting processes • Gas powered welders pose...

greater fire hazards because they require 1) high temperatures 2) fuel is flammable 3) require independent supply of oxygen

Which one of the following statements regarding sprinklers is true?

he movement of ladders and materials for repairs, like lumber and piping, can damage sprinkler heads in passing.

Describe the damage to property that can be caused by fire, including heat, products of combustion, and fire suppression efforts.

heat products of combustion fire suppression efforts.

Solvents, oils, paints, and grease are

highly combustible

damage done by vandalism

incidental

• Fire suppression efforts

o UWs generally expect some secondary damage caused by fire suppression

• Hail

o Unpredictable, but damage is usually much less severe than that of a tornado Can devastate crops but rarely causes catastrophic damage to structures or personal property left in the open Little can be done to prevent hail storm damage, but UWs can be aware of areas where hail storms are common

INSTITUTIONAL: • Heating systems

o Usually substantial - large boiler and furnace systems might require a full time engineer o Another hazard can stem from infrequent use (ex. church thermostat turned off between services and raised before services) Forcing of an excessive amount of heat could result in boiler explosion or fire

INSTITUTIONAL": Oxygen and gas hazards Describe the risk associated with welding in school craft shops or prison workshops

o Welding in school craft shops or prison workshops involves acetylene gas Procedures produce sparks which can fly several feet and act as ignition source Welding should be done in well ventilated areas or separate rooms Fire extinguisher on hand Should comply with NFPA 51B

• Ability of a material to conduct heat is a function

of its cross-sectional area (larger area = greater ability of a solid to conduct heat)

How have materials used in office furnishings/decorations changed ?

old wooden desks and filing cabinets have changed to steel equipment; which has reduced fire load However, increased use of plastics in office machines, décor, and interior finishes has increased fire hazards because plastic burns easily and emits noxious gases and thick smoke when ignited

Radiation Stops only when it encounters an

opaque object, which absorbs some radiation

What has the SECOND greatest fuel load

ordinary masonry construction because of large amounts of wood in joists and floors

When vapor concentration is near the upper limit of flammability

oxygen is low and combustion is imperfect

Some materials have greater resistance to the spread of heat than others because of

superior insulating properties

is difficult because abandoned mine shafts and tunnels are not always easy to locate - many sites weren't accurately mapped

the earth movement exclusion

o Airflow in fires Combustion occurs most efficiently at/near

the middle of the flammable range • Fire is hottest there and flames are brighter • Vapor mix near upper or lower limits of flammability slows rate of combustion & produces a cooler fire with little to no visible flame • Lean mixture near lower limit produces smoldering, slow, cool fire that releases heat and flammable vapors

What define a solid's combustibility

the self-ignition points of solids define their combustibility

o Heating equipment creates 3 sources of accidental ignition:

• (1) heat generated during normal operation of the unit • (2) malfunction that accidentally ignites fuel outside the unit's combustion chamber • (3) flues that vent products of combustion

• Limiting combustion explosion damage o Venting 2 ways it minimizes damage:

• (1) relieves pressure on the structure itself, allowing to survive the blast • (2) directs the force of the explosion away from other property susceptible to damage, limiting values exposed to a potentially catastrophic loss Explosion vents are common for protecting the structure in which an explosion occurs - sealed openings in the walls or roof designed to fail and blow outward

story buildings are at greatest risk of damage because of seismic wave action

• 4-6 story buildings are at greatest risk of damage because of seismic wave action; buildings with lower levels used for parking (soft stories) can collapse during earthquakes unless properly designed & constructed

o Controlling hurricane damage 2 most important factors to control:

• Adequate building codes • Strict enforcement of them building codes that are properly written and enforced are most effective means of ensuring building envelope can endure severe wind conditions

What creates this "Stack effect"

• Any architectural design that allows heated air to escape upward and cooler air to replace it at the bottom

Discretionary rating plans require additional attention to detail by UWs

• Because this plans modifies rates for essentially similar risks, which could be perceived as unfair price discrimination • Application of debits and credits can keep plans from being unfair

• Businesses that combine reactive chemicals should do what to prevent loss?

• Businesses that combine reactive chemicals must establish controls and systems to prevent accidental mixing or contact

To control this hazard:

• Collecting dust 1) as it is generated 2) remove it from the atmosphere 3) prevent it from collecting on surfaces • Dust collection systems must be cleaned, and stray particles that evade the system must be vacuumed (sweeping is NOT more effective)

unfired vessels

• Commercial property covers explosion

Size and shape of area

• Controls supply of oxygen available for fire and amount of heat radiated back onto combustibles in the fire's path

Failures related to the structure of the vessel

• Corrosion, erosion, wear and tear can gradually thin the vessel's surface • Thermal expansion and contraction or excessive vibration might introduce cracks that weaken the vessel shell o Any of these causes can make vessel explode even under normal operating pressure • Only protection: good maintenance and timely replacement of obsolete equipment

fired vessels

• Equipment breakdown covers damage

Pressure vessel devices are fired vessels

• Equipment breakdown covers damage to/caused by fired vessels • Commercial property covers explosion of unfired vessels

Insurance Advisory Organizations: Advisory Organization Reports

• ISO's property details report and building underwriting report (BUR) o Include photos, often a diagram, and info/rating of a building's construction, occupancy, fire protection, and exposure • Help UW answer questions such as: o How does the building compare to similar buildings? o What materials were used in construction of building? o What hazards exist at this property? o What fire protection is in place?

Risks for industrial matericals handling equipment

• Internal combustion engine vehicles create exhaust fumes that have potential for leaking or spilling fuel & fuel must be stored for their operation careless operation is a risk as well as impaired vision of operator from size of load being carried

_______________ will stand up better than unconsolidated, loose soil (ex. sand, gravel, silt)

• Long standing stiff soil (ex. limestone and some clay)

Storage areas available to tenants (like in apartments, condos, etc.) present several hazards

• Personal property, that can be flammable and damageable, are found in these areas and have questionable housekeeping • Difficult to control

o Indivisible combination policies

Broad range of coverages on an all or nothing basis for a single indivisible premium Permit little coverage selection by the policyholder, which further reduces adverse selection Little underwriting flexibility regarding pricing and alternative coverages UW must identify unusual loss exposures for which a "class rate" doesn't develop sufficient premiums

o Electrically powered equipment

Ex. forklifts Creates special hazard because the batteries require periodic recharging, often daily; wet-cell batteries produce flammable gases while recharging which can ignite from the heat of a stray spark

o Types of ownership

Fee simple estate Joint tenancy Tenancy by the entirety Life tenant (life estate) - • Remainder estate • Remainderman

o Nonstandard combination policies

Manuscript contracts written to insured's and UW's specifications Maximum flexibility obtained by eliminating minimum coverages Pricing tends to be on an individual risk basis Limited to large policyholders

o Simple combination policies

No package discount underwriting is same as if separate coverages were requested Provides maximum flexibility for UW and doesn't affect UW considerations Each coverage is priced on stand alone basis

ABC, Inc. has property insurance on its factory with a limit of $180,000. ABC suffers a loss for $100,000 and at the time of the loss, the factory has an actual cash value (ACV) of $250,000. Assuming an 80% coinsurance penalty and a $1,000 deductible, which one of the following represents the amount ABC's insurer will pay?

$89,000 $89,000. First calculate the 80% coinsurance (0.8 * 250,000) = 200,000. Since the limit was less than that, then take $180,000 limit / $200,000 required = 0.9. Multiply 0.9 by $100,000 loss and then subtract the $1,000 deductible. (0.9*100,000) - 1,000 = $89,000

The construction design characteristics that can affect the underwriting desirability of a commercial property account include these:

- A building's height and shape, which affect the ability of a fire service to fight a fire from outside a building - The fire divisions of a building, which are used to prevent the spread of fire - Openings in a building that pierce fire walls or firestops, which can increase a fire's loss potential

mill construction

- MIN 2 hour fire resistance rating columns 8 inches thick tongue and groove plants (floor) at least 3 inches thick wood beams 6 inches wide heavy floors with concealed spaces require fire stop great structural strength - reducing possibility of collapse would survive a severe fire

• Package policy rationale

- Resource realignment - greater premium size - automated UW process - lower accounting/billing expenses - competitive advantage Insurer can focus more on investigating nature of risk, insured character, and risk control recs

An underwriter who is concerned about fire spreading due to the combustibility of interior finish materials, as well as the risk of toxic smoke, is most likely to find which one of the following design features favorable?

- Small, narrow windows spaced well apart Increased vertical spacing and reduced window size can limit both the escape of heat from the fire scene and the amount of heat radiated back through the windows of floors above the fire.

joisted masonry

- at least 1 hour fire resistance rating - horizontal and vertical spread - less desirable in EQ areas - but of in hurricane winds

o Noncombustible

- exterior walls, floor, and roof are constructed of and supported by metal, gypsum, or other noncombustible materials Buildings are usually made of metal which not fire resistant NOT a close equivalent to fire-resistant construction • Unprotected metal columns, beams, and joists rapidly lose tensile strength and buckle/warp, increasing risk of collapse

Fender Wall

- fire walls that extend through combustible exterior walls In buildings of frame construction, fire walls must also extend through combustible exterior walls to have full effect. Those extensions, called fender walls, act as a horizontal parapet that would prevent the spread of fire through the outside wall and around the fire wall. Builders of apartment houses and hotels use them to provide balconies and enhance privacy.

• Remainderman

- individual who ACQUIRES an estate following death of a life tenant and who acquires a fee simple estate in the property • Can be sold

Insulation

- insulation can add to combustibility - common form is fiberglass - Insulation material includes combustible substances such as recycled paper and wood chips formed into fiberboard - Insulation is used not only for heat conservation, but also as a sound barrier. Combustible insulation can be found in the interior walls of highly fire-resistive buildings.

Materials used in the construction of a building can make a significant difference in the building's combustibility and, therefore, its desirability as an account. Primary aspects of building construction materials that underwriters often assess include

- interior finish - insulation - roofing - interior and exterior decoration.

Noncombustible interior finishes include

- plaster - gypsum - wallboard

Combustible interior finishes include

- wood - plywood - fiber ceiling tiles - plastic wall coverings *certain paints, varnishes, wallpapers, and other surface coatings, when added to other combustible finishes, can contribute significantly to a building's fuel load

Underwriting Considerations for Older Buildings

1) a different building code might hav ebeen in effect when it was constructed 2) complying with current building codes might increase cost of making repairs after a loss 3) heating, cooling, electrical, and fire protection systems might be obsolete 4) building might have been intended for a different occupancy and might not be suitable for its current use 5) conversion and remodeling might have created concealing spaces in which fire could burn undetected and spread rapidly 6) alterations and repairs made over the years have left unprotected openings in vertical and horizontal firestops 7) the building's conditions might have deteriorated for numerous reasons, including normal wear and tear, hard use, or lack of maintenance 8) the value of an older building might be difficult to determine, especially if the builder use construction techniques and materials that are no longer available.

In terms of insulation, what should the underwriter try to determine?

1) flame spread 2) fuel contribution 3) smoke contribution *should be available from insulation manufacturer* - should also direct risk control representatives to determine whether additional insulation has been added to a building

Roofs are subject to fire from two sides:

1) heat, sparks, and falling embers from outside fires 2) heat from inside fires

Underwriters must consider several interior finish characteristics, including

1) including their ability to spread fire 2) contribute fuel to the fire 3) emit (produce) smoke and noxious gases when burning each affects the building's overall property loss potential and the occupants' safety.

High Rise: Underwriters should pay particular attention to

1) the high-rise building's fire-resistive characteristics 2) to the presence or absence of approved horizontal and vertical barriers that confine the fire to its area of origin 3) also evaluate the internal protection, such as sprinklers, standpipes, and hoses 4) life safety For example, in a high-rise, heating and air-conditioning ducts often penetrate vertical and horizontal barriers. This can contribute to the spread of fire unless the ducts are equipped with automatic shutoffs and dampers. Elevator shafts and stairwells, unless properly constructed, can also spread fire and smoke. A 100-story building might have as many as 25,000 occupants. If a severe fire occurs on the fiftieth floor, more than 12,000 people (on average) would be located above the fire and subject to potential injury from flames, smoke, and gas. The occupants of fire-resistive buildings are often instructed to go to a certain area and wait for further instructions. Again, evaluating the integrity of the building is important because occupants might not be able to pass through the fire area unless the building is equipped with specialized evacuation facilities. Property underwriters must realize that the fire department's first priority is the safety of a building's occupants. When lives are endangered, firefighters concentrate on human safety before fighting the fire.

Roofing: The exterior surface of a roof is used for two basic purposes:

1) weather seal 2) barrier against fires outside the building to which the building is exposed * should be as noncombustible as possible*

Resistive coverings are classified as

A (safest) - Concrete, tile, and slate B C (some fire resistance) Treated cedar shingles and zinc sheets over asphalt-saturated organic felt are C

An insurance policy's valuation method will determine the value of the insured's property in the event of a covered loss. Which one of the following valuation methods factors in depreciation when determining the value of insured property?

Actual cash value (ACV)

Firestop

An element of construction inserted in a concealed space (wall or roof area) that prevents the passage of flame from one point to another; used to help contain fires and increase the chance of extinguishing the flames.

Most common roof covering for residential buildings

Asphalt shingles Although they are somewhat combustible, they are excellent barriers to severe fire exposures when properly constructed and installed

Parapets

Because fire can spread via the roof in such buildings, those fire wall extensions, or parapets, extend above the normal roof line. - vertical extension of a fire wall that extends above a roofline o Should be 18-26 inches high, depending on occupancy o Necessary for frame or masonry buildings

A tool that underwriters can use to evaluate the effectiveness of building codes in general, and how vigorously they were enforced in a particular community,

Building Code Effectiveness Grading Schedule.

Personal property values are easier to determine than real property values. However, when the values of personal property are difficult to resolve, which one of the following is almost always required?

C. An outside appraisal

Martin is underwriting a commercial restaurant building that is located a block from the beach in New Jersey, in an area known for high wind gusts. There are other buildings immediately adjacent on either side of the restaurant. Martin is evaluating the roof's construction materials with respect to their effectiveness both as a weather seal for the building, and as a fire protective barrier. Which one of the following roofing materials is he likely to find most desirable?

Concrete - Concrete, tile and slate roofing materials are rated A (safest) with respect to fire resistance; however, tile and slate are subject to wind damage.

Concrete, tile and slate roofing materials are rated A (safest) with respect to fire resistance; however, tile and slate are subject to wind damage.

Concrete, tile and slate roofing materials are rated A (safest)

Verifying the values of property exposed to a loss is an essential part of commercial property underwriting. For example, if the property values shown on a commercial property submission are higher than the property's actual value, then

D. The insured will pay for unnecessary coverage.

Which one of the following statements is true regarding fire walls?

Fire walls must not stop short of the ceiling or floor.

Key construction design characteristics of a building can affect its underwriting desirability. The building's height and shape, the number of fire divisions, and building openings influence the ease with which fire can be controlled and extinguished. Which one of the following is the most serious challenge firefighters face in fighting a fire in a 20-story high-rise building that has adequate risk control protection?

Gaining access to the building to fight a fire from the inside

The risk manager of a midsize manufacturing company would like several coverage enhancements and a seamless approach to insurance for their Building and Business Personal Property, Inland Marine and Crime insurance. What type of policy format would best suit the risk manager's needs?

Output policy

When underwriting package policies, underwriters may need to make special considerations. Which one of the following best describes the main problem that arises when underwriting package policies?

Some coverage parts of the package policy may contain unacceptable risks.

Denver Dental School was awarded a Leadership in Energy and Environmental Design (LEED®) certification following its recent building renovations to achieve energy reduction, lighting and water efficiency, and use of environmentally preferable materials and green housekeeping programs. Ciara is underwriting this five-story building of highly fire-resistive construction, and asks her risk control engineer to conduct a site inspection. She specifically asks the engineer to investigate the insulation type added during the renovation, and to make sure it was properly installed. If Ciara is most concerned about toxic fumes harming the school's occupants in the event of a serious fire, which one of the following types of insulation will she least prefer that the engineer find?

Sprayed-on cellular plastic foam - Both rigid foamboard and sprayed-on cellular plastic foam insulation produce high volumes of toxic smoke when burned; however, the fire-resistive barrier applied to the rigid foamboard makes the sprayed-on cellular plastic the least desirable choice.

Which one of the following statements is true regarding measures of potential loss severity for property loss exposures?

The amount subject for a location, as estimated by any two underwriters with a common employer, should be consistent.

Which one of the following statements regarding package policy underwriting is true?

The disadvantage of package underwriting is that underwriters cannot be selective in the coverage offered to the applicant.

Fuel load (fire load)

The expected maximum amount of combustible material in a given area of a building, including both structural elements and contents, commonly expressed in terms of weight of combustibles per *square foot.*

Large horizontal structures present a different type of problem than that present in a high-rise building. The solution to large horizontal area fire problems is

The use of fire divisions.

Underwriters can use a valuation guidebook or computer software supplied by an appraisal company to make their own property value estimates. Which one of the following is true regarding the valuation guidebooks or computer software?

They can also be used for valuing building contents or equipment.

Which one of the following is true regarding underwriting indivisible combination policies?

Underwriters have little flexibility regarding pricing and coverage.

Fire Divisions

a section of a structure so well protected that fire cannot spread from that section to another, or vice versa. It restricts the spread of fire. Must meet specific requirements: 1) the buildings must be separated by 2 independent walls or one continuous, common masonry wall that divides two adjoining properties *while vertical integrity is the solution to many fire problems in high-rise building, fire divisions are the (comparable) solution for fires in buildings with large horizontal areas* additional construction design characteristics to consider

• Output policy

all or most of the commercial property coverages that the insured organization needs, and uses a flexible rating plan - o Seamless approach; provides property coverage enhancements not contained in standard forms o Eligibility = most commercial organizations o Generally used for midsize and larger businesses

Amount subject

amount subject is almost always the value of all insured property exposes within a single fire divison "within four walls"

o Minimum requirement combination policies

and insured must purchase minimum required coverages (ex. of this is ISO CPP) Used to minimize adverse selection Premium discount is provided

Interior and Exterior Decoration: Vermiculite and marble veneer panels are often present on the exterior of the lower floors of office buildings. Those veneers cover protected steel components or hide the residual form markings in poured concrete structures. They are subject to

breakage and cracking from the effects of ice in loose joints.

o Mixed construction

buildings that don't fit into a single construction classification

Masonry noncombustible

fire resistance rating of NOT less than 1 hr exterior walls are masonry and noncombustible Class A roof and floor - low initial cost - low maintenance - ability to withstand major windstorms and EQ **has potential to collapse from the heat a fire generates**

o Fire-resistive

fire resistance rating of at least 2 hours (usually 2-4) Exterior walls/structural components: • Solid masonry including reinforced concrete; hollow masonry block at least 12 inches thick; hollow masonry between 8-12 inches thick Floors and roofs components: • Monolithic floors and roof of reinforced concrete with slabs at least 4 inches thick; "joist systems" with slabs supported by concrete joists spaced no more than 36 inches apart and at least 2¾ inches thick Structural metal supports: • Horizontal and vertical load bearing protected metal supports Best construction - walls/floors/columns/roofs constructed of a noncombustible material that do not buckle or collapse as readily as other types • Superior to other types of construction, but is not "fireproof" • Is also best type of construction to prevent damage from most causes of loss (earthquake, windstorm, flood)

o Frame

has load bearing components made of wood or other combustible materials such as brick or stone veneer Might require firestop devices - inserted into a concealed space (wall or roof) that prevents the passage of flame from one point to another • Used to help contain fires and increase the chance of extinguishing the flames Materials other than wood can be used without changing the classification • Brick or stone veneer - give appearance of standard brick/stone construction but not equivalent to it • Metal-clad or asbestos-clad - the covering can prevent ignition of wood by minor fires, but little protection is provided against external exposure • Stucco - cement plaster; adds slight degree of resistance to fire depending on type of lath and thickness of plaster • Concrete block walls -unknown fire resistance Less desirable than other more fire-restrictive construction classifications • Acceptable for some occupancies, like offices

o Joisted masonry

has load bearing exterior walls of brick, adobe, concrete, gypsum block, stone, tile, or similar material with combustible floors and roofs Ordinary construction - exterior load bearing walls of noncombustible materials with at least a 1 hour fire resistance rating • Brick, wood joisted, or brick joisted • Has many inherent hazards of frame construction because of the possibility of horizontal and vertical fire spread (firestops are important) • Usually found in major metro areas in the northern states; buildings are usually <6 stories high because exterior bearing walls can't support taller structures o Many constructed before WWII o Age and deterioration are potential problems; so is proper insurance to value amounts • Less desirable in earthquake areas; adequate in hurricane-force winds

o Masonry noncombustible

includes exterior walls of fire-restrictive construction with a fire resistance rating of not less than 1 hour Building exterior walls are masonry and noncombustible or slow burning floors and roofs • Slow burning floor/roof has same spread rating as Class A (0-25) Typically has a masonry nonbearing wall surface, a concrete floor, some type of metal deck roof, and unprotected steel webbing supported by unprotected columns Popular - low initial cost, low maintenance, and ability to withstand major windstorms and earthquakes with little to no damage ***has potential to collapse from the heat a fire generates

Used to minimize adverse selection

o Minimum requirement combination policies o Indivisible combination policies

• Building openings

o Openings that pierce fire walls or firestops increase fire loss potential Most common cause of unprotected openings is oversight during building renovations o In addition to ducts and passageways, buildings contain many openings that can compromise the integrity of a fire division (ex. openings for stairs between floors, elevators, etc.) Vertical opening such as an elevator or stairwell is only protected when it is completely segregated into a separate fire division

UW considerations for determining acceptable fire divisions

o UW must consider building *occupancy and its fuel load when determining acceptable fire divisions - suggest physical inspection of occupancies to prevent losses Curtain boards - partial fire wall that, when installed in conjunction with roof vents, help contain hot smoke and gases and aids exterior venting to simplify fire suppression Firestop - inserted in a concealed space that prevents the passage of flame from one point to another • Used to help contain fires and increase the change of extinguishing the flames; used to restore the entire building

Curtain boards

partial fire wall that, when installed in conjunction with roof vents, help contain hot smoke and gases and aids exterior venting to simplify fire suppression 1) help contain the hot smoke and gases in the area of origin 2) aid the exterior venting of the property 3) simplify the task of fire suppression

Fire resistive

rating of 2 hrs (usually 2-4) Walls: - solid masonry with reinforced concrete - hollow masonry block at least 12 in think floors roofs: - monolithic floors slabs of at least 4 inches thick - horizontal and vertical load bearing protected metal supports *Best Construction* noncombustible material that do not buckle or collapse "is not fireproof" best type of construction to prevent damage from most causes of loss

Building Codes Prescriptive Codes

specific details on how building is to be constructed size, type, and installation techniques

o High-rise buildings

structure taller than 75 ft, or a building taller than the tallest ladder available to the fire service; these buildings restrict the capability of local fire services Tallest aerial ladders can reach 120 ft, but many fire services aren't capable of fighting a fire from the exterior of a building that exceeds 100 feet (8 or 9 floors) Fire department will typically have to fight fire from inside, if possible • Ability to gain access to the building to fight from the inside is the most serious challenge firefighters face in high-rise buildings UW should pay attention to fire-restrictive characteristics and presence or absence of approved horizontal & vertical barriers as well as internal protection (sprinklers, standpipes, hoses) Require control of heavy fuel loads - often are offices with relatively few combustibles • Sometimes have restaurants or bars located on upper floors - significant fire hazard UW should also be concerned with life safety

When does the hazard created by an interior finish arise?

when the finish is installed interior finish can serve as additional fuel, once finish is installed, a small fire can ignite and quickly engulf the entire room - a process referred to as FLASHOVER