For over 50 years the Allianz Risk Consultants and Engineers have been focused on providing risk protection advice for our clients. The primary aim to ensure our clients are protected by minimising risk and preventing property damage, business interruption and reputational losses. Their expertise is built on industry knowledge and a pool of claims experience.

OF ALL PROPERTY LOSSES CAN BE ATTRIBUTED TO HUMAN ELEMENT FAILURES

64%

ALLIANZ GLOBAL CORPORATE & SPECIALTY

The world has evolved and with it the dependency on technology has changed the risk landscape. These changes include the development of new products, complex risk simulations, risk culture, big data, enterprise risk management, resilience, quantitative risk management, emerging markets and corporate governance etc.

Despite these changes our experience indicates there are 12 human elements that are simple to introduce, and low cost, that will help clients protect their business and reputation.

Our Risk Consultants have created the following ‘Allianz Property Risk Management Charter’. The charter uses the experience and lessons learnt to provide suggestions on the way to enhance a clients risk profile and embedding it into the local culture.

ALLIANZ PROPERTY RISK MANAGEMENT CHARTER

agcs.allianz.com

The templates provided can therefore be tailored to meet your individual business and risk requirements. Our field engineers have also shared their experience on how to embed the best practice principles and procedures into your business, and as an example you may wish to choose a mixture of the following implementation initiatives to reach every location and also perhaps extend the initiatives for your key suppliers?

a) Roll out to all locations using your internal company communication channels with re-enforcement from the Chairman or senior figurehead.

b) Post on your company risk management / risk and insurance intranet site.c) I nsert into your company risk register to validate compliance.d) I nclude in your own company risk management manual and procedures.e) Present to your plant / site managers at quarterly off-site meetings etc.f) P resent to plant / site managers when appointed and at budget time.g) I nclude within plant / site managers annual performance metrics.h) I nclude in your internal audit procedures.i) I nclude within your ‘Health & Safety‘ responsibilities for compliance.

The following are the simple 12 proven Risk Management Principals which together with example documents can be tailored to suit your business risks as applicable. If you require any further details or advice, please do not hesitate to contact your Allianz Account Engineer.

1. MONTHLY LOSS PREVENTION SELF INSPECTIONS

Implement a monthly self-inspection program to verify the following:

a) Sprinkler control valves are locked ormonitored in the open position, easilyaccessible, and they appear to be in goodoperating condition.

b) Fire hydrants are easily accessible by the firedepartment, caps are in place, and theyappear to be in good operating condition.

c) Fire department connections are easilyaccessible by the fire department, caps are inplace, couplings are free to rotate, and theyappear to be in good operating condition.

d) Fire extinguishers are adequately charged,easily accessible, appear to be in goodoperating condition, and have been servicedby a contractor within the past 12 months.

e) Fire extinguishing systems are in automaticoperation with no trouble indications and thesystems have been serviced by contractorwithin the past 6 months.

f) Fire doors appear to be in good operatingcondition and emergency escape routes areunobstructed.

g) Flammable and combustible liquids storedand handled safely.

h) Overall plant housekeeping is adequateincluding a clear desk policy and removal ofrubbish, at the end of each day.

i) Battery charging areas, plant rooms, andcomputer rooms etc. remain clear of allcombustibles.

j) Building roof coverings, flashing and drainsare in good condition.

k) Storage rack aisles remain clear of storage atall times.

l) Horizontal and vertical rack storage fluespaces of 150 mm are maintained at alltimes.

m) A minimum clearance of (0.5 /1 m) ismaintained between the top of storage andthe sprinkler deflectors.

n) Idle pallet storage location and quantity issatisfactory.

Inspection results should be recorded and retained for review by Allianz Risk Consulting and any deficiencies noted should be promptly corrected.

Please See Appendix 1 for an example - Self Inspection Check Sheet

2. PLANT EMERGENCY PLAN

Implement an emergency response procedure by designating a trained employee plus an alternate for each shift for the following responsibilities in event of a fire or other emergency:

a) Person-In-Charge – coordinates andmanages all emergency efforts, includingensuring all other positions are assigned andproper training is provided at least annually.

b) Notifier – notifies the fire department as abackup to the fire alarm service and makessure the fire department is directed to thescene of a fire.

c) Fire Pump Operator – reports to the firepump house to verify the pump has startedand continues to operate until instructed bythe fire department.

d) Sprinkler Valve Operator – verifies thevalves controlling sprinklers in the areasaffected by a fire are open and remain openuntil ordered shut by the Person-In-Chargeor fire department. This person should alsobe responsible for reopening any closedvalves after any operated sprinklers havebeen replaced.

e) Fire Fighting Salvage Crew – performsincipient stage fire fighting and cleanupprocedures. Members of this crew should befamiliar with the location and operation of allfire fighting equipment.

f) Electrician – familiar with the location of allelectrical power disconnects to ensure poweris shut off to areas affected by a fire or otheremergency. This person should also providetemporary lighting if necessary.

g) Utility Operator – familiar with the locationof all shutoffs for natural gas, ammonia,propane, oxygen, flammable gases, air,domestic water, etc. to ensure these systemsare shut off during a fire or other emergency.

h) Salvage Crew – promptly performs cleanupand salvage operations to restore productionas quickly as possible.

Training should be provided annually, coordinated with the local fire department and should also include natural hazards such as snow, hurrican, flood and earthquake etc.

3. NO SMOKING

Develop and implement an effective written policy that prohibits anyone from smoking inside the facility. If smoking is allowed outside the facility, establish designated areas with approved receptacles for proper disposal of all smoking materials.

http://www.agcs.allianz.com/insights/ white-papers-and-case-studies/fire-protection-impairment-manag

4. IMPAIRMENT PROCEDURE

For fire protection system impairments expected to exceed 10 continuous hours in duration, notify Allianz Risk Consulting 48 hours in advance of a planned impairment and as soon as possible for an emergency impairment by emailing the Fire Protection System Impairment Notification & Restoration Form to impairments@allianz.com.

The impairment form and guidance document can be downloaded at www.agcs.allianz.com/insights/white-papers-and-case-studies/fire-protection-impairment-management.

Fire protection systems include sprinkler systems, standpipe/hose systems, fire protection water supplies, fire pumps, fire mains, fire extinguishing systems, fire detection/alarm systems, etc. Work should be planned so as to minimise the time and area involved in the impairment of fire protection.

5. HOT WORK PERMIT

Develop and implement an effective hot work permit program in accordance with Allianz Risk Consulting’s Hot Work Management guidance document. The program should include written procedures for issuing a permit for any hot work conducted by employees or contractors outside designated fire safe areas (e.g., detached outdoor areas, maintenance shops, etc.). Before approving any hot work permit, the permit issuer should inspect the work area and complete a checklist to confirm all applicable precautions have been taken, including the following:

a) Automatic sprinklers remain in service forsprinklered buildings.

b) Cutting and welding equipment is in goodoperating condition.

c) All combustible materials within an 11 mradius of the work site are relocated orprotected by approved welding blankets.

d) Hot work is not performed near walls,ceilings or roofs of combustible constructionunless protected by approved weldingblankets.

e) A fire watch is provided during and at least30 minutes after completion of hot work. Thefire watch individual should have fireextinguishing equipment available andtrained in its use.

Upon completion of the fire watch, the permit issuer should complete a final recorded inspection of the work area to ensure it is safe. Completed hot work permits should be retained for review by Allianz Risk Consulting.Please see the attached link for hot work documents and permits in various languages:http://www.agcs.allianz.com/insights/white-papers-and-case-studies/hot-work-management/

http://www.agcs.allianz.com/insights/white-papers-and-case-studies/fire-protection-impairment-managementhttp://www.agcs.allianz.com/insights/white-papers-and-case-studies/fire-protection-impairment-managementhttp://www.agcs.allianz.com/insights/white-papers-and-case-studies/fire-protection-impairment-managementhttp://www.agcs.allianz.com/insights/white-papers-and-case-studies/hot-work-management/http://www.agcs.allianz.com/insights/white-papers-and-case-studies/hot-work-management/http://www.agcs.allianz.com/insights/white-papers-and-case-studies/hot-work-management/

6. MANAGING CONTRACTORS

Develop and implement a formal program for training and managing contractors prior to working on site. The training should include complying with the following procedures:

a) Hot work managementb) Fire protection impairment managementc) Smoking regulationsd) Risk assessmentse) Lock out/tag out equipmentf) Housekeeping practicesg) Ensure that any contractor maintains a

minimum of Euro 5 m public liabilityinsurance and are responsible for any injuryor damage they cause due to theirnegligence up to this minimum limit.

A formal program will ensure contractors are properly trained on the facility’s hazards and safety programs, which will prevent property damage caused by fires, explosions, etc.

7. FIRE DEPARTMENT PRE-FIRE TOUR

Invite the local fire department to tour the facility on an annual basis to develop a “pre-emergency” plan so they are familiar with the site’s layout and construction, as well as occupancy hazards and fire protection features (i.e. sprinkler systems, fire alarm systems, etc.).

8. FIRE PROTECTION TESTING AND MAINTENANCE

Fire Alarm testingContract with a qualified fire alarm company to perform functional testing of the following initiating devices in accordance with the latest edition of NFPA 72, National Fire Alarm and Signal Code or equivalent local standards. The plan should include the following features as applicable:

Quarterly: a) Dry pipe sprinkler system high/low air pressureb) Low building temperaturec) Low water tank level and temperatured) Electric motor-driven fire pump, including

running, power failure, and phase reversale) Engine-driven fire pump, including running,

failure to start, controller off “automatic,” andtrouble (e.g., low oil, high temperature, overspeed, etc.)

f) Inspectors Test Connections (ITC) should beflowed to test the sprinkler system alarms tothe gate hose and local water bell water flowalarms

Semiannually: g) Sprinkler water flowh) Sprinkler valve tamper

Annually: i) Manual fire alarmj) Smoke and heat detectorsk) Fire extinguishing systeml) Fully close and open all fire protection valves to

ensure that they remain in operating condition.

Test reports should indicate results for each device tested and disposition of any problems identified during testing. Any devices found inoperable should be repaired as soon as possible. All reports should be retained for review by Allianz Risk Consulting.

9. FIRE PUMP INSPECTION AND TESTING

Test and inspect the (electric motor/diesel engine)-driven fire pump as follows:

a) Conduct weekly inspection and testing of thefire pump. The pump should be startedautomatically by a drop in water pressureand operated without flowing water for aminimum of (10/30) minutes.

b) Contract with a qualified company to conductannual performance testing of the fire pumpunder minimum, rated, and peak flows.

Inspection and testing should be performed in accordance with the latest edition of NFPA 25, Standard for the Inspection, Testing, and Maintenance of Water-Based Fire Protection Systems or equivalent local standards. Any deficiencies noted should be promptly corrected. Results should be recorded and retained for review by Allianz Risk Consulting.

10. BUSINESS CONTINUITY PLAN

Develop a comprehensive, written disaster recovery/business continuity plan addressing the actions necessary to restore normal operations at this site following a loss due to fire, windstorm, flood or other peril in accordance with the latest edition of NFPA 1600, Standard on Disaster/Emergency Management and Business Continuity Programs or equivalent local standards. The plan should include the following features as applicable:

a) Undertake a business critical /impact analysis review.

b) Store all critical backup computer data offsite to prevent loss of both primary andbackup data in event of a loss to the computerroom from fire, windstorm of other peril.

c) An inventory of critical equipment.d) A list of vendors who can replace lost

equipment or provide spare parts.e) Plans and specifications for any

custom equipment.f) Sources for temporary utilities such as

emergency power, air conditioning equipment, etc.

g) Potential sites to which the operations maybe temporarily relocated.

The plan should be a “living document” subject to continuous updating as changing conditions dictate. One or more copies of the plan should be maintained off site in order that the plan is not subject to the same loss as the facility itself. A copy of the plan should be submitted to Allianz Risk Consulting for review.

Step 1: Identify

Risk Assessment

Step 2:Analyze

BusinessImpactAnalysis

Step 4:Measure

Test,Train,Maintain

Step 3: Creative

Strategy & PlanDevelopment

BusinessContinuityLifecycle

11. SECURITY

Dependent on your risk provide a security service to perform hourly recorded rounds when the facility is not fully occupied in accordance with the latest edition of NFPA 601, Standard for Security Services in Fire Loss Prevention or equivalent local standards. Security rounds should be recorded by an approved recording system with tour stations strategically located to ensure all important areas of the property (including site boundary fences) are adequately monitored. Records should be reviewed at least weekly by management and retained on file for review by Allianz Risk Consulting.Security personnel should be trained on their duties and responsibilities, including how to respond to emergencies such as fire, severe weather, unauthorized entry, water leakage, etc., with annual refresher training.

12. NEW PROJECTS AND CONSTRUCTION

Plans and specifications for all new construction projects, renovation to existing facilities, installation of new fire protection systems or fuel-fired equipment, or modifications to existing fire protection systems should be submitted to Allianz Risk Consulting for review and comment prior to construction or installation:

As a general rule:– All construction should be non-combustible.– All fire protection equipment should be

designed to a recognised standard such asNFPA or any equivalent (local) standard andlisted or approved by a nationally recognisedtesting laboratory.

– A suitable risk assessments and businessimpact analysis should be undertaken toidentify all business hazards.

– Suitable lightening protection, exteriorlighting, and emergency escape routes etc.should be provided.

– Any hazardous or business critical operationsi.e. computer equipment, plant rooms shouldbe provided with a minimum 1 hr rated fireseparation. All electrical cable opening shouldbe fire stopped and consideration given toproviding local gaseous protection and smokedetection in critical plant areas.

– For new locations provide Allianz withgeographical codes to aid a natural hazardssite review.

– Ensure that a Change Management System isin place to identify and manage any riskassociated with:

- Unforeseen or new hazards- increases in risk associated with

known hazards- Increases in the vulnerability of

Business Interruption

See the attached link for further information on Change Management:http://www.agcs.allianz.com/assets/ PDFs/ARC/Tech%20Talks/TTVol14-ManagingChange-May2014.pdf

http://www.agcs.allianz.com/assets/ PDFs/ARC/Tech%20Talks/TTVol14-ManagingChange-May2014.pdfhttp://www.agcs.allianz.com/assets/ PDFs/ARC/Tech%20Talks/TTVol14-ManagingChange-May2014.pdfhttp://www.agcs.allianz.com/assets/ PDFs/ARC/Tech%20Talks/TTVol14-ManagingChange-May2014.pdf

Appendix 1

DETAILED - SELF INSPECTION CHECK SHEET

Premises

Inspected by

Date

Distribution

Accompanied by

Report No.

Sheets

Item Identified Action Comments Yes No

Fire Risk Assessments Completed

Fire Plans of site available

Fire Wardens appointed including deputies

Emergency / Fire Controller appointed

Appointed persons trained

Staff Induction includes fire precautions arrangements

Emergency / Fire Log maintained

Pre-Emergency Response Team in place & personnel trained– person in charge– utility fitter– sprinkler pumps/valves operator– greeter for fire brigade– director for fire brigade– fire team trained in the use of portable fire fighting equipment & updated– salvage squad– spill/leak procedures– emergency equipment in place– winterisation

– natural hazards ie flood, storm etc.

Visitor Controls in place

Fire Evacuation Drills completed (specify frequency)

Fire Safety provisions– adequate number of exits– travel distances acceptable– escape routes clear and in good repair– directional notices displayed & adequate

Portable Fire Extinguishers- extinguishers in position- accessible- extinguishers adequate- maintenance adequate

Item Identified Action Comments Yes No

Hose Reels- adequate coverage- accessible- maintained

Emergency lighting in place & adequate- weekly check- function test monthly- full test check yearly

Fire Detection systems checked/tested- operation check weekly- full system check yearly- adequate coverage- detector heads unobstructed

Sprinkler System- weekly bell test- weekly pump test- sprinkler valves secured in open position- periodic inspection of system adequacy- maintenance

Assembly points identified

Fire Points- clearly identified- not obstructed- equipment in place

Break Glass Point- notices displayed- weekly function test

Smoking- prohibition signs displayed and are adequate- receptacles in areas smoking permitted- waste removal adequate- was smoking noted in prohibited areas

“High Risk” areas identified- persons trained for work in high risk areas (competence)- equipment suitable for area, e.g. zoned electrical system- warning notices posted

Site fire hydrants- marked adequately- kept clear- pumps tested- discharge tested and valves exercised

Emergency vehicle access is adequate

Housekeeping Management- Internal combustible materials adequately stored- External combustible materials adequately stored

Item Identified Action Comments Yes No

Fire Doors- in working order- function tested- maintained- adequate lighting

Waste- suitable waste containers being usedwithin the premises- adequate removal frequency- waste skips located away from buildings

Flammable Liquids- adequate precautions in use- adequate storage- adequate transport arrangements- spill procedures in place- fire fighting arrangements adequate

Electrical Systems- PAT Testing in place- Fixed Testing adequate- Thermographic Scanning undertaken- Cabinets closed/locked- Extension Cable use appropriate- Temporary wiring in use- Multi-Adaptors not used- Adequate zoning- Circuit breaker rating adequate- Earthing adequate- Any storage adjacent to switch gear- Electrical utility rooms are kept locked

Gases- storage adequate- use adequate- transportation adequate- emergency procedures adequate

Heating Systems- Any portable forms of heating noted- Adequate clearance around fixed space heaters- Fusible links or fire valves operational- Frost thermostats fitted and operational- maintenance

Building Maintenance- gutters & down/ drain pipes clear- roof in adequate condition- signs of water penetration- exposed combustible insulation materials

Security- any breaches in fencing- any broken glazing- obstructed movement detectors- physical security adequate- electronic security adequate- check security guard log- check CCTV coverage

Item Identified Action Comments Yes No

Services- kitchen filters & ducting cleaned- fire dampers installed and operational- any unstopped service penetrations in compartment walls- service risers fire stopped adequately- cavity barriers adequate

Other Checks

ALLIANZ RISK CONSULTING (ARC)

Global Head of Property Risk ConsultingMaarten Van Der Zwaag+31 858769184maarten.vanderzwaag@allianz.com

Regional Unit LondonRichard Park+44 203 451 3373richard.park@allianz.com

MediterraneanDamien Liebart+33 1 5885 6861damien.liebart@allianz.com

AmericasPeter Richardson+1 708 505 3205prichard@aic-allianz.com

Central and Eastern EuropeRalf Dumke+49 89 3800 13136ralf.dumke1@allianz.com

AsiaSamuel Tan+65 6395 3428samuel.tan@allianz.com

ABOUT AGCS

Allianz Global Corporate & Specialty is the Allianz center of expertise for global business insurance and large corporate and specialty risks.

For further information please visit the ARC Homepagehttp://www.agcs.allianz.com/risk-consulting/

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