Coronavirus: Short-term Closures Pose Risks for Companies, According to New Allianz Report

  • The potential for damage from fire or lack of maintenance can increase in mothballed or idle production facilities and industrial plants.
  • Companies from the automotive, aviation or mechanical engineering sectors can be particularly hard hit.
  • Companies should focus on reducing the risk of fire, safe storage of flammable materials and liquids, and implementing proven guidelines for building safety and maintenance if they have to temporarily close premises because of the outbreak.

NEW YORK--()--Many companies have shut down their premises temporarily at short notice due to the Covid 19 pandemic. According to the risk consultants of Allianz Global Corporate & Specialty (AGCS), improper action or negligence when decommissioning buildings and production facilities brings risks for companies. Mothballed factories or offices are by no means safe from fire or other hazards – in fact such risks can be exacerbated when premises are idle or largely unoccupied.

In a new publication, Coronavirus: Safety Measures For Businesses Forced To Temporarily Close Their Premises, AGCS experts provide an overview of general security and prevention measures to help avoid physical damages, such as regular checks of fire protection systems and the safe storage of flammable materials and liquids if premises have to be shutdown. In response, AGCS is also increasingly providing security advice to its customers via remote monitoring technologies that digitally visualize buildings and security features through photo and video recordings without the need for many people to be physically on site.

"We already see a number of losses that occur on holidays or weekends when employees are not largely present on sites or premises," says Thomas Varney, Regional Manager for the Americas at Allianz Risk Consulting, "The production and operating shutdowns currently being caused by the coronavirus pandemic can also bring increasing hazards for businesses.” Among the industries most affected are automotive manufacturers and suppliers, airlines, airport operators, mechanical and plant engineering firms, the hotel industry and many other large and small production and service companies.

The coronavirus outbreak has led to considerable disruption for both individuals and business operations worldwide. For businesses, the growing number of restrictions imposed by public authorities means that offices, factories and other sites may remain unused or unattended for a longer period of time than usual, as they are ordered to close.

"The potential damage caused by fire or as a result of inadequate maintenance remains, or even increases, when operations are shutdown. There are specific measures for loss prevention that can be followed in order to prevent damage during the shutdown of operational facilities as much as possible," Varney says. If possible, regular inspections and tests of fire protection systems should be continued, as these can greatly reduce the effects of a fire. An AGCS analysis of loss events in the insurance industry shows that fires account for almost a quarter (24%) of the value of all insured events in industrial insurance over a period of five years. Fires have caused insurance losses worth more than 14 billion euros from around 9,500 claims.

AGCS Risk Consultants focus on four main areas of loss prevention measures in the publication: reducing the risk of fire, safe storage of flammable materials and liquids, compliance with utility and services guidelines, and the use of best practices in building safety and maintenance.

The complete overview of possible actions for companies that are forced to temporarily close buildings, factories and facilities due to the coronavirus is available here.

About Allianz Global Corporate & Specialty SE

Allianz Global Corporate & Specialty (AGCS) SE is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.

Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.

Worldwide, AGCS operates with its own teams in 33 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,300 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2019, AGCS generated a total of €9.1 billion gross premium globally.

Cautionary Note Regarding Forward-Looking Statements

Contacts

Emil Janssens
emil.janssens@agcs.allianz.com
212.533.1287

Erin Burke
Harden Communications Partners
eburke@hardenpartners.com
631.239.6903

Contacts

Emil Janssens
emil.janssens@agcs.allianz.com
212.533.1287

Erin Burke
Harden Communications Partners
eburke@hardenpartners.com
631.239.6903