Hello, and welcome to today's webinar titled Mitigating Risk in Wood-Famed Construction. I'm Lillian Coulson, and I'm pleased to introduce today's webinar. Please be aware of the IMUA statement. I'm happy to introduce today's presenters. Art Cedar is part of the product management team and is the divisional vice president of the property and inland marine division at Great American Insurance Company. Art is a graduate of Xavier University with a bachelor of science degree in finance, and he holds several professional designations, including chartered property casualty underwriter, associate in marine insurance management, associate in reinsurance, and associate in insurance data analytics. And he began his insurance career at Great American in inland and property underwriting. He is also a member of IMUA's board of directors. In his spare time, Art enjoys golfing, playing soccer, and spending time with his wife and three sons. Joseph Kelly is owner of Mass Construction Consultants, Incorporated. He is a former building inspector, as well as a chief building inspector in the city of Boston. These days, Joe is a podcaster, educator, and code consultant for construction and real estate companies. He specializes in practical education to help firms be more productive and eliminate painful project mistakes. He also enjoys assisting firms with marketing and branding of their businesses. We are thrilled to have both Art and Joe with us today. Gentlemen, the floor is all yours. Good afternoon, everybody. This is Art Seder. I appreciate the introduction, Lillian. I want to welcome everybody. On behalf of Joe, myself, IMUA, I appreciate your time and interest in our subject matter today that hopefully you'll find to be helpful in your underwriting for this challenging class of business, wood frame builders' risk. The agenda that is in front of you now is three items. Hopefully, if we do a really good job on part one and part two, there won't be a need for part three. But we certainly are open for questions at the end. Part one is I'll focus on the overview and underwriting perspective. I'm just going to present a higher level view of this class, the construction type, and some of the risk characteristics that field underwriters should consider as your underwriting. You know, there's a good attendance here. My part will be about 10 or 15 minutes. So, for the $59 participation, Joe's is worth $59. Mine is free and probably going to be worth every piece of that. The second part, Joe will be a bigger part of this presentation with his expertise and a bit more of the detail and the technical aspects of this class. I think things that I think we'll find as underwriters, loss prevention specialists, we should expect or look for our clients to do the same. I guess the first poll question would be just to kind of get the sense as to who our audience is. It's a pretty big number from what I can tell. So, just one question, I'm not going to go into too much detail but just to get the sense as to who our audience is. It's a pretty big number from what I can tell. So, just one, you know, are you with the carrier, reinsurer, broker, other, and then your role within those companies? It'll take a few minutes. So it looks like we'll close the polls here, and it looks like we're primarily underwriters with the insurance carriers. We've got a couple of brokers out there, which is great. I always like to see our brokers on the lines, and a little bit of loss prevention. So we appreciate that, and this will close the polls. If there weren't any claims people, I was going to make the joke, and I certainly respect the claims folks, but I was going to give the old I'll talk slower joke, but I won't do that, not to make fun of our friends in claims. As much as we as underwriters and insurers want to avoid losses, particularly large losses, owners, developers, contractors, want to avoid large losses even more. Aside from the financial loss, the property loss, oftentimes the large fires that accompany a big wood frame construction project sadly often involve a loss of life, whether a firefighter, construction worker, that. So a lot of reasons to want to avoid the large loss. So with that, with all the exposure to the large loss, fire, and now why do owners, builders, use this construction method? A few reasons here that I've scribbled out is economical. It's the lower cost, relatively inexpensive way to build. The materials are readily available. They're easy to deliver. They're easy to get to the job site, on the job site. Don't require additional machinery. We don't need to rent the tower crane for a wood frame. So it becomes a pretty economical construction method. It's lightweight. So kind of adding to the cost as well, it's lightweight. It doesn't require as robust a foundation as a high-rise, heavy construction building might. You don't need to go down as deep for the foundation and the support. So again, shortens the build time, shortens the economic impact on there. It's very adaptable. It's pretty easy to make changes, to fix mistakes, to make a decision in the middle of saying, hey, let's move that wall and change the configuration. Let's add a dormer where there wasn't one. So it becomes a pretty easy, soft construction type. So it makes it attractive that way as well. It's a renewable source, renewable building material. So environmentalists appreciate this. A lot of different theories on cutting down forests, but the forests grow back. So it's a renewable source. It creates a smaller carbon footprint where the steel construction, concrete, all those kind of take away and add to that footprint. And lastly, it's probably more of a regional, but it performs very well in seismic areas. So it's sort of a preferred construction method oftentimes. You see a lot of it in California, that it's got flexibility, performs well on the seismic scale. Kind of backtracking just a bit, and would assume everybody's on the same page with this, but my reference here is going to be based on traditional, any comments I'm making, is pretty traditional wood frame construction, so stick construction, versus mass timber engineered wood. While there's similar properties and there's some overlap, there's a whole school of thought. There's some good IMUA webinars as well on just mass timber. Two schools of thought on how that performs in fire versus traditional stick. So for our reference in this webinar, we'll be talking mostly on the stick construction. The overall goal, again, is to raise some awareness and hopefully develop sort of a healthy respect for the class and to large losses that this class of business can present. Ideally looking for the underwriters to maybe broaden their scope, the way they look at a risk, to maybe differentiate in their minds different risks. Every company that's represented here and others that aren't all have your own appetite, guidelines, capacity, pricing, loss ratio targets, so everybody knows how to underwrite. What we're hoping to do here is just to present some different ideas to think about it to maybe differentiate within the scale of your company's guidelines. The example that I might give is you may have two $5 million builders risk projects on your desk, it's very likely that the only thing in common between the two of them are that they're $5 million each. Hopefully later in the presentation we'll show some things to consider that maybe the risks are different enough aside from their limit that they would warrant some different terms and conditions based on a number of things we'll talk about a little bit later. As I said, with the $5 million frame builder's risk for one company, it may be a small routine risk, it may be a large risk for another, so we won't discuss all that, but just different things to think about within the parameters of your underwriting guidelines. We said why frame, why do they like it, the builders, the owners, and that? Why not wood frame? Is it for builders risk insurers that causes us heartache or can, and I'd say this is probably the one class of business that can kind of hit just about every type of loss that you can think of. It hits all the large loss perils from the wind, hail, fire, I didn't put on there, but water as well. You get all the big severity losses that can easily get you six figure, seven figure type dollar losses, but then it also, oftentimes these job sites lend themselves to a lot of the frequency losses as well, the theft, the vandalism. So you get to think about everything when you're underwriting wood frame builder's risk. As far as wind, certainly not just in the coastal and the convective areas, but any number of places. I know here in the Midwest, we're not necessarily in a convective area here in Ohio, Indiana, Kentucky, but at any given point in the springtime, sudden high winds, 60 mile an hour straight line gusts unexpectedly can take things out, so you can't ignore wind as a peril. Hail is a big peril, especially on the wood frame construction. More times than not, the buildings that are of wood frame typically have the asphalt shingle roofs, tend to be pretty big footprints, and asphalt shingles don't perform particularly well in hail events. But the big one that we're talking about here, the loss that the other perils can give you a big loss, the fire is the one that can give you a loss that can really ruin your year. In addition to the property loss, because it's very easy to get to a total type loss at whatever phase of the construction is, then it begins to trigger because of the severity of the loss, it triggers a lot of times the time element, so those limits become engaged in the loss as well to magnify the effect of a large fire loss. So fire is in the big letters because that's the big peril we'll be talking about for the next few minutes. As far as that goes, so some ISO data, I didn't put it on the slide, but ISO reported data from 2013 to 2017 showed isolated apartments, which primarily would be the wood frame construction, that that class of business performed a little bit over $500 million of premium in that period of time, about $377 million of losses, about half of those were fire losses by dollars, and ran at about, overall the class, about a 74% loss ratio. So every company has different loss ratio targets. I'm pretty sure nobody's is 74 or better. So it's a challenging class. Fire is the big peril there, so that's what we'll talk about first. So I was trying to find examples of some large fire losses just to bring it home. I'm sure everybody's aware of them. Many of you, unfortunately, probably have had a large fire loss or here, are well aware of it. I found this website, and ironically, it's presented by the Steel and Concrete Council Advocacy Group to say why we shouldn't build with wood frame, and then more times, they're considered the life safety, promoting steel and heavy construction. It's a good website. If you want to go on there, it shows this map with the little red icons. Each is a significant fire loss. The dates probably range from 2015 to 2017 or 2014, so it's a couple years. Some significant ones, each one, if you link, it gives a little description of the loss, and then a link to the news story. So again, just to show, fires aren't localized. They're on the West Coast. They're on the East Coast. All these are not, a good portion of these were new buildings under construction, although a number of them, to make their point, were occupied apartments or other wood frame buildings. Oftentimes, the story, unfortunately, ends with a loss of life. I'm going to just talk about a couple losses that caught attention. Some things in the articles that I read, I just thought were worth noting, will kind of make the point of the importance of fire loss prevention, loss mitigation. This first loss was a large apartment fire under construction in Portland in 2017. Again, little link to the article if you're so inclined to want to read that. Interesting facts. You know, five alarm fire. This was caused by an arson. This building was about half-completed. You know, 135 firefighters and one and a half million gallons of water kind of put it out to a degree, more protected the property around it, but that's a lot of water and a lot of people fighting that fire, and as you can see, the picture's not big here, but fire gets going pretty big, pretty hot, pretty quickly. Interesting quote from the fire marshal is that these buildings have no protection, so he's referencing while they're under construction, it's just bare wood and it's stacked up like kindling, said Doug Jones, Portland's fire marshal. Once they catch fire, he said, they burn too quickly to save. I think that's kind of a, I think the approach for the firefighters on a lot of these large buildings, they tend to burn quickly, they burn very hot, they are worried less about saving property as they are saving lives, they're not going to go into the fire to fight it for fear of roofs collapsing on them, putting their lives at risk, so I think, good quote there. Interesting, after this, I believe this wasn't the first big fire in Portland, the article goes on to say that they were changing some codes and requirements in Portland that might require after-hour watchmen to protect job sites like this one from that happening again, so I did not follow up to see that in fact is a code, but that's a great practice. One thing that was pretty common in not just these couple losses that I'll talk about quickly, but a number of others, a lot of these losses end up, the time of the loss is somewhere between midnight and 5 a.m., so oftentimes they're happening after hours where a watchman on hand may have been able to see the fire, get people responding sooner than later. Second loss, a fire in Raleigh, North Carolina, 2017, also on my ISO data was the worst year of the five that were reviewed there, the loss ratio that year was a little bit over 100%, a lot of these examples are from 2017, so that makes sense. This picture, the news article said that this picture was taken eight minutes after the fire began, so you can see how pretty quickly it gets from, in eight minutes, how the fire can spread pretty rapidly, whether it was actually when it started or when the fire was first noticed, so it may have started before eight minutes, but the point still being that it gets going pretty quickly. Again, a big fire, 130 firefighters were fighting that for three hours. They estimated the loss to this building at about $12 million. In addition, four other buildings surrounding had some other fire damage, and in total, from heat damage and otherwise, 10 buildings total were affected by this particular fire loss. Again, good little quote from the article, this building was last inspected Monday, completely compliant to the fire marshal, the fire chief, and construction had been inspected 50 times to that point, but was in an extremely vulnerable state before the sprinkler system was installed, so again, kind of midway through construction, same kind of comment from the fire chief, so past all the fire inspections, the different building code inspections, everything going the right way, but bad things can happen to good risks. The last one we'll talk about here is College Park, Maryland, again, April of 2017. This is a large project, so this is very common to what we're seeing more and more of these days, are these very large footprint pedestal construction, two stories of masonry non-combustible or fire-resistive base foundation, one or two stories above ground, heavy construction above that, up to five stories of additional wood frame construction. This is a very large footprint, very big building. What this kind of demonstrated, too, is the shape of the building. It's had sort of a donut shape, as the article describes, so a center courtyard that made an extra challenge to the fighting of this fire, so seven stories, podium style, central courtyard. At the end of the day, this ended up being about a $39 million fire loss, so again, I think that would have ruined most people's years. From the article, partial roof collapse in the building's donut shape with four facades surrounding a courtyard made it difficult to get water on the blaze, and fire authorities said they worried about possible collapse, and again, certainly I'd be worried more about my people than the building. At one point, a county helicopter had used a helicopter to see where the fire was to help direct and push the tamp the blaze down. There's a lot of wood in this building, and adding that empty space in the building made it easy for the fire to travel, so again, none of this is earth-shattering news. Wood burns, unprotected wood burns. Wood burns fast. A lot of wood burns faster and hotter, so there's plenty of fuel to all this. As I said, a lot of these losses, the fires began at night, and some of the challenge we'll talk about, and Joe will talk about as well, is because the fires get going hot, they're big, large buildings have more wood, the real trick is, first, is avoiding the loss. If you can't avoid it, know that it's starting to burn as soon as you can, and get some help to put it out as quickly as you can, and if any one of those, and in cases of fire on a wood construction, minutes count, so you don't really have 20 minutes to get there, so every minute counts, because the fire can get going pretty quickly, as in that Raleigh picture there, for 8 to 10 minutes, let's just say, how big the fire gets engaged. Knowing that it's happening, to be able to do something is a real key. We'll talk about, the last portion of my thing is, what do I think, what should we look at as underwriters that might differentiate one risk from another, where we may want to do something a little bit differently, or how we might look at a risk differently, I should say, or characteristics of each to help you along that way. So I mean, very intentionally, I have a small C, because we know of the construction. We know we're talking about wood frame construction, but at least to address that. So we're not focusing on the construction type itself, because we're talking about wood frame. But I think understanding the size, the footprint, is it a podium-style building? Is it that donut shape, like that one Marilyn Loss had, or the materials that they're using? So some of these, and by that, the size of it, it's 100,000 square feet. Well, then understanding that with the footprint, is it 100,000 square foot building going up five stories? So is it a small footprint, but a very vertical amount of value? Or is it spread out? Let's say a lot of nursing homes, assisted living facilities have more of a central hub, and then some wings that go off. So is the 100,000 square feet spread out more on a single story, two stories, over a more vertical area? You may argue that the opportunity for this total loss, the fire burns upward more so, that it might spread quicker vertically than across all these wings, and really taking out that whole building. So is that a difference? Both buildings, let's say they're the same value, same number of square feet. But would you look at them both the same? One, I would argue, may have an opportunity to be a total fire loss, to get to a total loss much quicker. The podium style, again, may or may not be an issue. It's quite common now, but does that help the risk? Does it make it better or not? It depends on what are they doing? How high are they going? What's the shape of it? The materials, how much copper is going into that? Is it copper piping versus the PEX, or some sort of plastic piping? The more copper, certainly you have the opportunity for the theft and that. But a lot more sweating of pipes, a lot more open flames to assemble all the copper piping makes a difference. So maybe a little increased hazard. Both buildings are the same. One is using copper pipe, one is using PEX. Perhaps a higher fire hazard on the copper. Different types of roofing materials. Some may be some sort of a heat application that may introduce a fire exposure as well. One thing I often caution, my underwriters, or on a project that normally is wood frame construction, but it's submitted, I call it the joisted masonry trap, where it's submitted as joisted masonry, because the exterior is going to be a non-combustible or a brick veneer or something. But the exterior is going to be a non-combustible, or a brick veneer or something. But the reality is, we've taken it at face value. We've underwritten it as joisted masonry, put out masonry jam terms. We send out a loss prevention representative in a couple months, and we say, hey, it's really wood frame. So I always caution, joisted masonry, not a construction method that's used as frequently anymore, but to just really get into, or when it's a non-combustible and they're four or five stories, to just maybe be a bit more diligent on really understanding what are the load-bearing walls, the construction materials, what is the flooring structure, not tile or carpet, but is it wood joists, is it poured concrete, same with the roof structure, to understand that. So I think those are all important parts of the construction, and to differentiate there. I think we may question, you may question, that only matters when the building is occupied and finished, but I would argue possibly not. Again, the example would just say 250,000 square feet foot buildings. One is one story, one is five stories. So we kind of talked about that in the construction. But again, the vertical versus the horizontal. But if one is an office building and another is apartments, well, in an office building, there's probably fewer dividing walls, as opposed to an apartment or a hotel where you've got a lot of rooms, 100 rooms in that hotel, or 150 apartments, or whatever that might be. So there's more wood, more dividing walls. So how many dividing walls? How much more wood? How much more fuel is in this building? So I think that has a difference to know, is it an apartment or is it a dance studio? So it's just bigger open spaces, mostly the walls, but the interior doesn't have as many dividing walls. With that, an apartment or a hotel is going to have a lot more plumbing, a lot more fixtures in it. So your water, but then again, if it combined that with copper, there's a lot of heat, a lot of open fire to sweat the pipes together. A 100-room hotel is going to have at least three fixtures, the shower, toilet, sink. So that's 300 fixtures, a hot-cold line. So you've got at least 500 or more hot connections just at the object, at the toilet or the sink or shower, let alone all the other pipe that's being installed in the building the rest of the way. So I think the occupancy, understanding that, and how does that look from all that? Is there a political risk with that occupancy? Nobody in the neighborhood wants this building to be built here for its size, how it's going to look, what it's going to be when it's finished. Can also lead to the vandals, the arsonists, that way. Protection, public, private, what are they doing? How is this project protected? So not just the water supply. Where's the fire department? What else? What are they doing internally? What kind of fire watch do they have protection at the site? I look at that as well. As you could be in a protection class five, the fire department is five miles away, but it's a newer open area that has just been developed. The water is just put there. Our building is the first one that's going. There's nobody around to see it. So I was thinking, the more eyes that are on this and a busy street, if somebody sees smoke early on, they're going to call somebody. If it's in the night, you're not going to know it's on fire until you see it glowing orange. So those are just different things to think about from the protection, not just, hey, there's water there. It's a protection class five, so I'm good. Think about that, the accessibility to that site from the firefighters. Who's going to know this thing's on fire and how quickly? Exposure, again, sort of the geographic. The wind, hail, wildfire, again, it kind of gets to the geographic. Is it in a remote area? Is it in a busy street? Who's going to see it when it's on fire to respond as quickly as possible? The occupancy here I'd talk about, are you given permission to occupy? Are they putting this building to use while you're still on it? Could be a different scenario that you may want to think about as well. And security, access to the site, to keep vandals out, arsonists out after hours to watch for that smoldering fire. And then lastly, as important as anything else is who's doing the work? The contractor underwriting their experience, their commitment to loss prevention and mitigating losses. The subcontractors they use, how well controlled do they use the same ones? And that temporary heat kind of gets to the exposure. And when are they building this? Is it a northern climate? Is it going to be needing temporary heat in the winter months? And again, just a little extra exposure that if they started the building six months earlier, wouldn't be there. So would you have charged less six months or used different terms depending on when it is? So things that we should think about on each risk. So quickly to give Joe the time he deserves, I'm wrapping up my piece here and saying even when we understand all these, they could all be good risks. We just need to kind of identify and make sure we're making good decisions based on your appetite, your company's guidelines, but just ways to differentiate to say, is this, are we doing the right terms for this risk and understand it? So with that, I'll turn it over to Joe. Great. Thanks, Art. Everybody listening, Art did an excellent job of laying out what the issues are, what the exposure is. And then in this half, I'd like to talk a bit about what can we do to prevent these from happening. We know what the exposure is now. What steps can we take to prevent those things? I do bother to throw up a few things. Let me just get the arrow going here. Hey, Eileen or Lillian, if you can see it, for some reason I can't get the arrow up. But if you can hold that. I think it's there now. Get it away? OK, now it's away. You want to take it down, then just click it again. Yeah, I want it up, and it's not showing up. The other day you grabbed it up for me. Perfect. Thanks, folks. OK, you're welcome. I put up some social media profiles here, website. I do that because I share a lot of content on code-related fire safety. The website in particular has more information about 241 and pre-fire plans, things like that. So those are some good resources if you want to look for more information. So what do we want to do to mitigate our risk here? I look at it with three approaches, maybe like a layered approach. Prevention, which to some degree we call planning, and then response and suppression. Response and suppression, again, those terms to some degree could be used interchangeably, but for lack of a better terminology, that's what we'll go with today. Great place to start on the prevention side is to look to code. There's a code, NFPA 241, conveniently named Standard for Safeguarding Construction, which is what we're looking to do. It really is the minimum standard for construction fire safety. It's put out by NFPA 241. It may be the law of the land in the municipality you're working in. It may not be. But in either case, it's a very useful guideline that you can turn to for reference and maybe at least to say, hey, this is the industry standard. So maybe it might not be the law of the land or code in the jurisdiction you are working in, but it definitely can be used as industry standard. And at a minimum, it could be used as a reference. But now what would be really helpful is if it is code. Because if it is code, then you can refer to that and force the ownership and force the general contractor construction manager to comply with that code. NFPA has put out a really handy website that just went into effect in January. For folks that can't read it, it is codefinder.nfpa.org. And this is fantastic. What you can do is you can go in by state, or you can go in by NFPA standard and look up to see if it applies to the jurisdiction you're working in. One thing that I will note is down the bottom, you see here where I said NFPA 1 essentially equals 241. A lot of states adopt NFPA 1 as their state fire code. And within NFPA 1, it references 241. And that's kind of the gateway. That happened in Massachusetts. Massachusetts adopted NFPA 1 for their state fire code. NFPA 1 was the gateway to make NFPA 241 an applicable code in Massachusetts as of 2015. So that's a helpful tool if you're unsure if the code applies in the jurisdiction with which you're providing coverage. So let's say 241 does apply in your area, or is the code adopted in your area. The next question is, does it apply to your specific building? This is straight code language. And it says, structures undergoing construction, alteration, or demolition operations, including those in underground locations, shall comply with 241. Undergoing construction, alteration, or demolition. That's pretty much everything. So if you're doing construction and 241 is the standard, then you need to comply with 241. When do you need an actual fire safety plan, or what's commonly referred to as a 241 plan? If you are following construction fire safety pretty closely, you'll probably often hear the term NFPA 241 plan. They're really referring to a construction fire safety plan using 241 as the guideline. So should the project that you're covering, should they have a 241 plan? And what the code says, the fire safety program plan shall be included in all construction, alteration, or demolition contracts. So I'll just stop right there. All construction, alteration, or demolition contracts. So that's a common question that comes up, do I need a plan for this? The code is pretty clear. Code can be interpreted. But in this case, all construction, alteration, or demolition contracts, that means everything. Everything needs to have a plan. And that gets confusing, because a lot of folks that, you know, they're doing a kitchen renovation, and they're saying, I need an NFPA 241 plan for my kitchen renovation. Unfortunately, the code doesn't differentiate based off of dollar value, or size, or residential versus non-residential. It's silent on that. So if 241 applies in your jurisdiction, there should be a plan on site. Now, the next piece is critical. And here in Massachusetts, it got a lot of attention, because it says, in the right of the owner to administer and enforce this program shall be established, even if the building is entirely under the jurisdiction of the contractor. Myself, I was a superintendent for eight and a half years for a large general contractor. As a building official for about the same amount of time, I did a lot of the code duties at the Association of General Contractors in Massachusetts. So I've read a fair amount of code. You don't typically see the term owner. You'll usually see responsible party, licensee, design professional, but you don't typically see owner. So when this language came into play, that got a lot of attention from not just the general contractors, but obviously the owners. And let's talk about what this sentence says. That in the right of the owner to administer and enforce this program shall be established, even if the building is entirely under the jurisdiction of the contractor. So what that means is we're not talking about, you're working in a hospital and they have EH&S and facilities management. In that condition, it would make sense that the owner could handle construction fire safety. But what this is saying, you have a general contractor, wide open site, they put a trailer, a fence, they pull the permit, it's their license, wide open site. The owner, if they choose, can run the construction fire safety on that site. That's their right. And what this really is doing is sending the message to the owner that you can no longer just defer to the general contractor and say, hey, fire safety is their issue, okay? An additional place where it mentions owner in 241 is it says an owner shall designate a fire prevention program manager for each site, okay? But I believe it says the owner shall designate an individual to act as fire prevention program manager. So what that does is that puts the owner on the hook to say, okay, who did you designate to be in charge of this? And it also does not give them the out to say I'm designating Turner Construction. It says an individual, right? So it has to be you, Mr. or Mrs. Owner. I chose Sally Smith or Ted Smith or whoever to be in charge of fire safety on this project. So if something goes wrong and Ted Smith has no ability to be and no credentials and doesn't have the knowledge base to be the fire prevention program manager and there's a problem, they're gonna look to the owner to say, why did you designate this individual who's not qualified? And the point of me saying all this is the code is different. It does not really allow the owner off the hook. The owner needs to take ownership, pardon the phrase, of construction fire safety on a project. So it's a long way to say you need a construction fire safety plan and the owner should be part of this process. Eileen, Lillian, is everyone seeing that okay? Okay, yep. You can broadcast the results whenever you're ready, Joe, just click that broadcast button. Okay, it's not popping up in front of me, Eileen, and I don't see my slides. You're not seeing the poll? Nope. It's there. Let me try and move it over here, and let me see if you see it over there, because it's there. Do you see it over here? Well, long story short, I saw them all coming in, and I saw maybe one or two people out of the 60-some-odd answers had it correct, and if you can go back to the presentation, Eileen. And people will see that most folks said heating equipment, hot work, something to that effect. But in actuality, if you look at blue, buildings under construction, excuse me, I'm trying to get our arrow back here. There we go. Thanks, Eileen. You're welcome. I think it's your Mac. We'll probably not use Macs in the future. Okay. I appreciate that. That's fine. We're going to go to the next slide. Okay. Thanks, Eileen. You're welcome. I think it's your Mac. As you'll see, surprisingly, cooking equipment, okay, cooking equipment is the number one cause of fire on, sorry folks, this is killing me a little bit, I can't toggle too well either. Cooking equipment is the highest under new construction, and now this is pretty interesting because if most folks are working in an urban environment like myself, it's not too common that you're seeing cooking equipment on site. Reason being is in urban environments, you usually have a coffee truck showing up, you have, you know, restaurants you can walk to, but what I'm assuming here is in more urban environments, I mean, excuse me, in a more suburban or rural environment, folks are looking to cook on site. So I intentionally put that out there. Most people did say hot work, heating equipment, things like that, smoking, arson, okay, those are all issues. And as you can see, we're looking at intentional fires being arson at 13%. As far as renovations go, heating equipment tends to be the issue. We'll also see hot work, right, smoking. Smoking everyone thinks to be a big one. It's decent, but it's not a huge percentage. And for folks that might not be aware, exposure fire, that is a neighboring building is on fire, and then therefore that catches your structure on fire. So now we know what the hazards are, let's get into what can we do as far as preventing those hazards. First thing we could do is we could design out the hazards, okay. We could choose to use metal framing versus wood. This conversation is really about wood construction, so that's probably not going to be an option. We could choose to do fire-treated lumber, that could certainly be an option. We could also choose as a new product on the market, M-Fire, and what that is is that is a spray-on fire treatment. So what you could do is you could use traditional lumber and frame it like you normally would, and then come after and spray the product. I don't know how great the product is or how great it isn't, but it's a new product. I have seen owners choosing to use M-Fire, so it might be something worthwhile to look into. The trouble with straight fire-treated lumber is cost and availability. Sometimes it's just not the availability of all the lumber you need when you're using fire-treated, so M-Fire could be a decent solution. Housekeeping is something important to have in your plan, and a lot of people think housekeeping, they think cleanup. This group is probably a little more sophisticated, and you understand it is where you're placing materials. It's to make sure we're not leaving pallets in hallways. We're not storing materials in stairwells. But one place where folks might not be thinking about, even this group, is it's not just inside, it's outside. Think about access to the building, access to the site. Did someone put a piece of equipment in front of the fire department connection and there's not keys there? Or did they put a piece of equipment in the fire department access to get to the back of the building? Fire hydrants are the big ones. Lots of people love to stack stuff, whether it's scaffolding or equipment, around fire hydrants, and the fire department can't get to the fire hydrant. Housekeeping is certainly a big one. All the things you normally think about with trash, materials, blocking stairways and egress, that's important to address. NFPA 241 does say that the debris needs to be removed at the end of each work shift or sooner, so that's something to consider when you're looking at these plans. Reduce combustibles. A lot of people are thinking, okay, well, that's housekeeping, isn't it? But I would say think more along lean concepts, which is just-in-time delivery. So if you have a bunch of, let's say, linear diffusers and they're coming in boxes and they're wrapped in paper, that's a lot of combustible material, much more combustible or easier to ignite than wood. So let's make sure those linear diffusers show up when they need to go in. So they show up within reason, obviously. They get installed. They're up in the ceiling grid. They're no longer a hazard. The trash gets out of the building and not an issue. That's a much better solution than have the material get here a month in advance and you have all this cardboard and paper sitting in a pile, people potentially doing hot work or throwing a cigarette butt around it, things like that, that would cause a problem. So reduce combustibles. That could also mean having material show up unpackaged on wheels, things like that, so they're easy to move and they have very little packing. So reducing combustibles is a good way to prevent issues. Site security. It's interesting. When you look at NFPA 241, they say that the site security is the responsibility of the fire prevention program manager. And a lot of people think, you know, okay, that really doesn't make sense. Why is it someone concerned with fire safety responsible for site security? There was going to be the obvious answer, which is, okay, let's prevent arson, but it's more than just that. If the fire department responds to sites, especially after hours, there's a lot of things that they need to know, things that should be in your plan, should be in a command post on site providing all the information, but it's going to be where can they hook up their hoses? Is there fuel storage in the building? Do you have BAB bars to do, as Art was talking about, you're doing temp heat in the winter, and there's gas lines run to the building. Do they know those gas lines are being run to the building? Do they know where to shut them off? Do you have temporary electric to the building? If there's a fire and they want to shut off the electricity, do they know where that is? A lot of times you'll go out to a construction site, there'll be temporary electric on site, and it's mounted on a piece of plywood in the back of the building. How will the fire department know that that is there? That might be something where if you do go with manned personnel, a watch person, that that person has a card even, let's say English is the second language of them and they're not really that confident with passing that information along, you could provide them a card that says, hey, here's where you shut off the gas, we have fuel in the building, and we have temp electric or we have permanent electric, here's where you shut it off. What are the things they need to know? We just chatted about smoking and cooking, cooking obviously being a big issue. You want to come up with some type of a policy, is it no smoking, no cooking, is it a smoking area, is cooking allowed but in certain locations, or do you want them to put a piece of dirt rock and say microwave only, whatever the issues are, you want to address that to some capacity in your plan. You probably want to put in place a rigorous hot work process, which means that the hot work permit covers everything it needs to. In a state like Massachusetts, the person performing hot work needs to be certified, and so does the fire watch. If you're in this jurisdiction, you want to make sure that you have a space for that person to put their certification number and the fire watch's certification number. What you'll see on the bottom right-hand of the slide is an infrared camera. We have a general contractor locally that part of their hot work process is they scan the space with an infrared camera prior to closing out the hot work permit, so issuing the permit, making sure the location of work is clear, make sure that people are certified if they need to be, closing out the permit, in some cases, closing it out with an infrared camera is above and beyond, but it's a great practice. Fuel storage as well, ideally, you want the fuel storage out of the building, fenced in on a concrete pad, in some cases, that's not an option, and if the fuel needs to be stored in the building for some reason, you want to have communication with the AHJ in order to get buy-in from them on how you're going to store this. Give me a half a second, Eileen, I just had to get this back to where I needed it to be. Perfect. Sorry for the delay, folks. So, prevention and planning is the first place to go. You want to put together a good plan, you want to prevent the fire from happening. The second layer is what I'm going to call response, okay, and response has a few things. It could be cameras, right, and you think cameras, is that really a response? Well, there's some really good technology out there now, there's the company being shown right here, which is ProVigil, there's a company, Castle Systems, all right, I keep getting them. Eileen, will you let me know if there's still trouble with people hearing? No, everything, yeah, no, it's good, just a little bit louder or closer to the mic if it's possible, but it's fine. Okay, so there's ProVigil, there's Castle Systems, there's varying degrees of technology, some of them take photographs every five seconds, a lot of them use some type of an eye or sensor, where in this case, this zone, if someone goes into that zone, the camera comes on, and then these cameras can get really sophisticated, which they can be smart enough to know the difference between a raccoon and a person, if someone enters the site, the camera comes on, it's monitored very much like a central system would for a fire alarm system, the person can get on a loudspeaker, they can turn on the light, they can say, we see you, we have your license plate number, we're calling the authorities, I know of a large national developer that does a lot of wood frame residential, they've used a system like this, and they were actually able to chase someone off from site that was entering site. We don't know what they were going to do, but the response is, somebody comes onto site, there's a hazard, camera comes on, you can respond in some capacity. Another method of response is sensors, okay, I will say up front, full disclosure, these right here, Pillar sensors, I do do some consulting for Pillar, full disclosure, what Pillar does is they monitor a number of things on the job site, they're a wireless system, they monitor temperature, humidity, dust particulate, VOC, sound, vibration, CO, they can operate as heat or fire detection, a big thing they do is leak detection, which becomes an important item when we're talking about livening up a sprinkler system late in the job. To the right is a company, Tattletail, for people that aren't familiar, they're doing a more traditional, you know, heat sensor, smoke detector, CO, pull station, they also do point of contact leak detection, so they've got sensors on the floor, if water hits it, it sounds an alarm, they also have flow switches, again, which operates as great leak detection. I'd say kind of the difference is Tattletail is more of a mechanical system and Pillar's more of a digital, they're both more or less doing the same thing, okay, Tattletail is really specifically on the fire and leak side, Pillar really can start getting into other things with air quality, sound, vibration, also the type of thing, so the two monitors, but either way, they're going to do something, which is they sense smoke and they sound an alarm and call a fire station. You have the capability on Pillar for them to send text to whoever you want on the project team, okay, Pillar uses kind of like a triangulation, which is where you might have false positives with a typical smoke detection on the construction site because of dust, you know, Pillar will use rate of rise, so the temperature, if it's 110, you know, is it 110 because there's temp heat in the room or there's sun shining on the window and there's no AC on, Pillar will use a combination of VOCs, dust particulate, and how quickly the temperature rises to get a good positive read on whether you really have a fire or not, you know, not to say one is better than the other at all, I think there's two different methods, Tattletail and Pillar are good solutions to look at, there are other sensors out on the market that can do similar things, and like I said, the response could be a text, the response could be call the fire department, but either way, you have an issue, there's a response that happens. The third layer, you've done great planning, okay, you're taking care of combustibles, you're minimizing, you're doing good housekeeping, you have a great fire prevention program manager, you're doing good fuel storage, great hot work, you have monitoring to prevent arson, you have sensors to pick up smoke and heat, but let's say you still have an issue, okay, the third layer is suppression. What we're looking at here in front of us is a project in Boston, the general contractor was Lee Kennedy, for some reference, and this is kind of a little bit of a tie into arts presentation, in Massachusetts here, we had in an 18-month period, going back 18 months, we've had three large loss fires, okay, substantial, one of them in particular was in the process of testing the generator, because they were going to start doing final fire department testing to turn over the building, the generator exhaust heated up, caught the building on fire, problem was the sprinkler system was turned off, it was functioning, they could have had the fire pump on and working, they chose not to, they were worried about leaks, okay, on the heels of that, the owner of this building said listen, I don't want to be the fourth large loss fire in the state of Massachusetts, we need to do something more, so Lee Kennedy came up with a system of sprinkling the building as it's being framed, so you frame a floor, you go up to the next floor, you start installing the sprinkler system, they did it as a dry system, and they had water run into the building, they've got a valve preventing the rest of the system for filling up, they turn it off during the day, and then at night they fill the system with air, they test it, no leaks, they turn the system on, so if a head opens up, drop of pressure, water flows, this is a great solution, it might not be for everybody, it could be some cost issues, but it really takes care of the temperature issue, which is what we have up in here in Massachusetts, it gives you the fire protection you're looking for, the suppression you're looking for, and the leak prevention that I'm sure everybody that's listening is concerned about, so that's kind of like the Cadillac when it comes to suppression. Another little, this is kind of more of a tip, that tool that you're seeing right here, and right here, I know a tenant fit out company that has concerns about a livened up sprinkler system, someone damaging it, whether they're hitting it with a scissor lift, or whatever the issue might be, this is a handy little tool that they have on all their job sites, it's like a pair of vice grips, it slides in the sprinkler head, you clamp it down, from what they tell me, they've used it a couple of times, it stops 90 plus percent of the water, gives them enough time to put a barrel or a hamper underneath it, shut the water off, and address it, so that's a decent tip if you are looking to put water into a building earlier. Another useful method is a standpipe, in Boston they have a requirement that if you have a high rise, which in Massachusetts is 70 feet, everywhere else in the country is 75 feet, but in Boston if you have a building 75 feet or greater, you need to install a pressurized dry standpipe. If folks want to look it up, you can look up the Deutsche Bank fire in New York, that's where this stemmed from, which is, I won't give you, I'll give you just the nickel version, they had a fire, the standpipe was compromised, it was under construction, firefighters went up, hooked up to the standpipe, water was spilling out on the lower floors because it was compromised, there was firefighter deaths, a large number of firefighter injuries, really a tragic thing, so this is a measure that Boston put in place to prevent a compromised standpipe. I bring this up because this is great to make sure you have a high quality standpipe functioning, but also it's a way to think about, you know, how do you want to pressurize your standpipe with water, valve it off and then you have water on the floor immediately when you need it. I know of one company that will fill up the main standpipe and then if they have a fire on the floor, someone can just open up the valve and put water on the sprinkler head that they need to. They actually use that to put out a fire in Worcester, that's a possibility. So those are some of the ways you can get creative if you're afraid to go to a full fire suppression system early. These are pretty handy, they call them spot fire extinguishers, and what they do is what you're looking at is that's a sprinkler head mounted to a fire extinguisher. They have cut sheets on them, they'll say that unit will cover a 10 by 10 area, you can space them out and get coverage that way. In this case you're looking at is a shack on a construction site. The concern was from the fire department which is, okay, you've put a ceiling up so you don't have sprinkler coverage. It's a shack that has a door on it. If you look in the room you've got a lot of combustibles being stored in there because a lot of subcontractors like to lock their material up because it doesn't get stolen. The downside to having a closed up room is that you have smoking a lot of times happening in there. So you can say no smoking on site, but you give a subcontractor a closed door. The concern is smoking, you put a no smoking sign there, they still smoke. The solution here was to go with the spot fire extinguisher, really made people happy. That's something to consider as a solution for suppression. Then you also have your typical fire extinguishers making sure they're placed in an appropriate manner. Then that's really up to you guys or the AHJ whether you want them fighting the fires with extinguishers or getting out and calling 911. That's really up to you guys. I mentioned a number of things in here. I mentioned some products. I think I may have mentioned some websites. If people have questions, my email is there. But this is really about a layered approach. You want to do the planning, you want to try and use some technology, and then to some degree you want to have some method of suppression if, God forbid, you do have an issue. That's our layered approach. I think we'll open the floor to questions. Thank you, Joe and Art. It was an extremely informative presentation. Our presenters are happy to take questions now. We have the Q&A pod up. You'll type your question into the text box and then click the balloon icon next to it and you'll receive it. We'll just wait a few moments for questions to come in. While we're waiting for questions, Art and Joe, is there any final thoughts that you'd like to add? Nope, this is Art. No, I think between the two, I think that the overriding idea is you want the best practices, certainly, to prevent the fire, to understand that piece of it. If not preventing, know that it's happening as quickly as possible, and then as quickly as possible, finding a means to put the fire out, I think, is the overall piece there. From my underwriting side, just as underwriters looking and recognizing, they're all insurable risks, but just are they different? Just to look at them closer and recognize the differences between them and underwrite appropriately. We have some questions that have come in now. And the first one is actually for you, Art. They have a question about the largest frame building you've insured under construction, and if you can just talk a little bit about that. Yeah, without getting into a lot of our company culture and that, we tend to approach wood frame construction pretty conservatively. So if I had to say a target number, I'd be hard-pressed. Probably something in the maybe a little bit above $10 million. The low teens, $10 million or $11 million is probably a good number. Yeah, that's a good question. I think that's a really good question. Are there any good online sources to obtain industry information such as loss ratios, causes of loss, size of market? I believe you mentioned some ISO statistics earlier. Yes, my smart aleck side of me to answer that question would be, you know, are there any good reasons? Yes, but yeah there's a number of different ones. I mean I'd be hard-pressed to spit them out here. Internally, I mean, you know, if you're an ISO reporting company or an AIS reporting company, those two vendors aggregate a lot of Inland Marine data on premiums, on causes of loss, so some pretty granular things that way. Can you speak a little bit about CLT and overall risk and combustibility compared to traditional wood frame construction? I can, Joe. Do you have anything you want to do with the engineered wood? Yeah, sure. As far as the overall risk, I don't know if that means more of what you're thinking, Art, but I'll make a general comment. I'm not an engineer, but I've read a fair amount, and it might be better. A lot of people will use the term CLT for cross-laminated timber. You might want to look at it as mass timber, because that will cover glulam, cross-laminated timber, all the different various things that fall into that mass timber umbrella. But it tends to act more like heavy timber, which is you have these large beams or glulam beams. And what you'll see is they create a char layer that actually starts to insulate and go out. So in a lot of cases, sometimes it performs even better than steel. So I would say CLT slash mass timber really don't even belong in the same category as light frame. They act much different. And there's a lot of stuff out there online. If you look up mass timber, fire, and maybe even use the term char layer in particular, you can see a lot of fire science folks and engineers give you some more information. But I would feel tremendously more comfortable with a mass timber structure than a light frame. And I guess the one last thing I'll say is think about the concept of your fireplace. If you throw kindling and small wood to get things going versus if you take a 20-inch log and try and start a fire, it's pretty difficult. So that's kind of a good analogy to go by. Thank you. And another question. OK, go ahead. Sorry, Art. Yeah, I was going to say, I agree with a lot of what Joe said there. I think IMUA, we've done some mass timber webinars. There's a lot of debate. Everybody has a different feel. I don't know that that construction method is as common in the US just yet or in Europe, so how it does really in a real fire and lab testing. And so there's still a lot of data being developed on that. So I think you could ask 10 people, and five feel it's very good and safe, and others may treat it more like traditional frame, maybe just slightly better. One thing people might be interested in, the 2020 edition of the IBC, the International Building Code, is going to allow up to 18 stories with mass timber. They have different layers to that. The maximum is 18. But either way, they're going to allow bigger and bigger mass timber buildings per the code coming up. And NFPA 241, in their next edition, is going to have a section on tall timber structures. Joe, further to that, so on frame construction, what's the max number of stories? In some style, it's tough to say stories, but you can get up to probably six stories in most municipalities. And that's with concrete fire rated construction, either the first and second floor with a three hour rating, but really four stories of...four to five stories of exposed light frames. And another question for Joe, does the NFPA code, do they address wildfire prevention for the western states? I'm not familiar with that. I do see...do you want me to back up one question that I can answer that I see there? Sure. For the security systems, the one that I didn't mention that is quite popular is Fedora. I see that as a question there, so Castle Systems, ProVigil, and Fedora are three ones that are commonly used, and they're pretty quality systems. I have a spreadsheet, Eileen, if you want me to share that with you, if you want to share it to the group of different technologies that I've seen used on construction sites. That would be great, thank you. So, going back to the cooking statistic, you know, with being a cause of fire, someone asked what kind of scenarios generate these losses? Are they formal cooking operations or informal like grills brought on site? I would only be speculating and looking at kind of my field experience, what I've seen, but how I understood it was that this wasn't, because it's new construction, I would venture to say they're talking about, it's people bringing grills and microwaves and toaster ovens on site. A frightening thing I saw one time out in Central Mass where it gets a little more suburban, rural, I saw a gas grill inside the building under construction. But that's my guess. Art, do you have any insight on that? I don't. I was surprised on that, but then I don't know if that is more by number of fires or dollars paid. So, you could see small little cooking fires happening frequently and putting out with the extinguisher as opposed to the causes that cause, you know, kind of related to if those percentages are by dollars lost or by event. So, I kind of rationalized it as being it happens frequently, but it's happening while you're cooking. So, you're putting it out with a bucket of water or a handy extinguisher as opposed to, you know, a larger event that causes the hot works. Ultimately, they don't happen as frequently, but when they do, they're severe. So, that data would be my guess at where I would see that one. Okay. We have another question. Is there a point in construction where you would consider a project that has a lot of small rooms there for passive protection to be a somewhat better risk, although it has a higher fuel load with more walls than a construction risk with substantially fewer walls? I guess I'll answer that from the underwriting standpoint, and I'll let Joe add on. I would say I don't know whether better or not. Again, I think more walls, more timber, you know, is more kindling, more fuel. So, the more walls, you know, but saying better or worse, there's more fuel, the more walls. As you start getting more finished, you have the drywall that creates a, you know, five-eighths inch, I believe, is a 30-minute barrier. So, you have it on two sides, or it's doubled. So, there becomes more fire resistance as it becomes more finished, but I don't know to say whether it's better or not. There's more fuel, and when the fire happens, you know, so that kind of depends. So, I can't say it's a better or worse risk. There's more fuel is the way I look at it. Yeah, I think ARD is spot on. The more fuel load, but then also, once you do start getting the drywall on, you have, especially if it's apartments, you have a lot of rating between units, so you can kind of control things better. But yeah, no, ARD's spot on. Thank you. How common is the use of a watchman as a loss prevention measure with frame builder's risk? You want to take that, Art? I'll try. From the underwriting standpoint, I can't. Again, I don't have data. You know, it's an added expense that most will not use. They'll try fences and security or deterrents, but not always a full-time watchman. I would hazard to guess that as the project value increases, that would probably be part of the job, depending on where. Maybe a higher crime area may be a bit more common as a requirement, in conjunction with the size, scale of the project. In that article from Portland, as they talked about the watchman as being a requirement on a particular project, the reference, I think, from the contractor developer said they would add $5,000 or more per month, I guess, at least on the project that he was talking about. So, over the course of the build, it adds another $80,000, $100,000 to the cost. So, probably not common because it's an expense not everybody wants to take on, but certainly, I think, is helpful if it's used as a loss prevention or mitigation, if nothing else. With mass timber, how realistic is it that the structural integrity of the components be confirmed safe after a fire, if you peel off the charred layers and make repairs? I would say, in most cases, whether it's a fire or a car crashes into a building, whether it's a fire or a car crashes into a building, as a building official, I'm going to want to see something from an engineer. I really don't see any reason that that repair can't be made. You could have a masonry column that was structural and gets hit by a car and you make that repair. I don't think it's any difference, but I think you would have the potential to make the repairs with mass timber versus light frame. Most of the fire services people I talk to, and I think Art kind of alluded to it with that quote, it's a non-starter. They don't go into light frame wood construction. It's really about just protecting the neighboring properties. They don't feel like, even with the quick response, it just happens too fast. They can't respond, even if they're there within minutes. In most cases, that's too late. Also, with partial fire losses, also including water damage and smoke damage, can the undamaged portion of the building be salvaged? If we're talking light frame, it's worth looking up the Dorchester fire. It was a treadmark building. It happened, I want to say, in 2017, maybe early 2018. That fire happened on the top floor. With all the water damage from putting out the fire, it was a total takedown to the ground, even though the fire happened on the top floor. A lot of times, they're using OSB, what a lot of people call particle board. In the light frame, that just doesn't hold up to water. Then you start dealing with mold issues. Light frame is pretty tough to salvage after the fact. I would say, beyond some of the claim scenario things, it really depends on the loss and the extent of it. If it's limited to one portion of the side of the building, they may be able to tear that down. There may be some smoke and other remediation for the balance of the building and some water damage. It's hard to say. I think it's a good question. I don't know if it's remediation for the balance of the building and some water damage, but it's hard to say on a broad statement to answer that, how much is used or not used or did demolish. It really depends on the loss itself. Very good point. If it's a small fire, somebody put out an extinguisher, like Art said, it's a siding or sprinkler head puts it out. Of course, I probably made too broad of a statement. We have time for one last question. Can you talk a little bit about infrared technology to detect fires early? I don't know enough about that technology, so I wouldn't comment. I have no knowledge of that technology, so no. Sorry. Maybe we'll get one more with that question we can actually answer other than no. Any thoughts on prefab modular construction being better or worse? I'll throw in my vote, and then you can let Art throw in his as well. I would say absolutely better. You reduce the potential, as Art was referring to when he was counting up the amount of, you know, fittings and everything that you have to do work on. If everything is getting prefabbed in a shop, whether it's components where it's plumbing racks coming out all prefab and you're not sweating the pipes in the field or brazing in the field. Yeah, anything that's done in a shop can be, you can definitely have much more control. So I would say there's a big vote all around. I would say prefab and modular would definitely be a better option. Yeah, I would tend to agree just from that, and then a lot of it depending on the degree that it comes to the site. But where it's drywalled, again, a little bit prevents some of the fire spread. So probably the fire and the time on risk generally is shortened. So they're just kind of putting these together and that, so that minimizes the exposed time. So that those are things that are better. I think a whole different topic, and I think there's another good webinar by IMUA, shameless plug for the association, on modular construction. But then I think the focus is, while fire is still an important piece, now the transit and the rigging of setting those modular units in place is a different type of exposure that probably should gain a little bit of focus on the underwriter from the underwriter then. So it's a little different shift in what your thought process may be. Thank you for an excellent Q&A session. Thanks also to our attendees for your participation and your interesting questions. All attendees will receive an email with a link to an electronic survey. Please take a moment to respond to the survey to provide

wood-framed construction

fire hazards

risk mitigation

NFPA 241

fire safety

building materials

occupancy

risk management

fire prevention measures

infrared cameras

mass timber construction

modular construction