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How resilient is your workplace?

Part two: Intrinsic threats

The second in a three part blog series looking at threats to office environments. In our first post on workplace security we examined external threats. In this post, we examine the intrinsic threats to an office from the main risks, earthquakes, fire and flood, and how such risks can be mitigated.

Many small offices of a certain age wouldn't meet today's build standards and are poorly positioned to resist earthquakes, fire and floods. In light of recent and some more distant events in Hawke's Bay, managers would do well to consider their office and workplace resiliency.

Steel beams strengthening a serviced office external wall
A steel beam used to strengthen a Hastings HIVE external wall and achieve a 100% structural NBS score

Earthquake risks:

Any office in Hawke's Bay can become an earthquake disaster site with threats to life and infrastructure. Your editor was an independent director at Tait Electronics in Christchurch during their quakes and saw first hand the impacts on staff wellbeing and business continuity.

Planning starts with ensuring the building you occupy is structurally strong, with 100% of the new build standard (NBS) being the benchmark. You can legally occupy a building meeting lower standards, but it's a matter of understanding and mitigating the risks. A building less than 34% NBS is considered earthquake prone. Between 34% and 66% NBS, buildings are considered an earthquake risk and above 67% NBS buildings are generally considered to have an "unlikely risk".

But at Tait after the second earthquakes, buildings we believed were over 67% NBS suffered structural damage and we found strengthening buildings to give our staff the confidence to return to work in these buildings was very challenging. Most engineers, builders and contractors were engaged on critical repair work and the necessary reinforcing materials were in short supply.

Your landlord should be able to provide an engineering report confirming an office's NBS rating but if not, an engineer can be engaged to provide this information. Bringing a deficient building up to code is something many landlords resist as the cost can be uneconomic, especially for older "character" buildings. It can be very disruptive to the business occupant and such work would usually be done between tenancies. There are deadlines on landlords to bring buildings up to minimum NBS standards, but it is likely that empty office buildings will be the main accelerator.

Earthquake strengthening for shared office space
Earthquake strengthening older buildings like the HIVE to 100% of NBS (New Build Standard) is no small task

The most common earthquake mitigation strategy is for tenants to seek buildings to occupy with high NBS ratings. If your building is less than 100% NBS, it makes sense to plan for 100% remote working for staff at short notice. Also realise that rural areas, suburbs and industrial areas will not usually regain power and utilities until after the CBD where hospitals, councils, police fire and ambulance will have their main buildings. During the recent floods, at Hastings HIVE we lost power for about six hours. We never lost telecommunications or mobile coverage. Some areas of the Bay were without all three for weeks.

An important risk mitigation is an emergency plan, with simple instructions for staff in the event of an earthquake and any tsunami if the office is in a coastal flood plane. Regular (say 6 monthly) emergency events practices should be scheduled.

Fire risks:

Fire is another major hazard and offices need a fire evacuation design from a fire engineer to gain code of compliance. This will likely require physical firewalls between tenancies, fire-rated doors, emergency lighting with properly lit exit signs, and possibly smoke protection zones around exits, in buildings sharing escape routes.

Larger offices or multi-office buildings will have smoke detection systems and building wide alarm systems. These alarm systems will most likely be connected with any physical electronic door locking so that if the alarms activate, the doors will unlock automatically to enable evacuation.

These systems need testing monthly by a certified provider and compliance recorded for the annual building warrant of fitness. And a registered fire evacuation scheme will be required for all but the smallest offices. This is a NZ Fire Service approved evacuation plan documenting the evacuation steps for the building. This plan must be posted near building exits for everyone to see and read. The plan often involves the appointment of fire wardens and will detail assembly points.

Appropriate fire extinguishers can be a good mitigation in buildings where small fire hazards are a factor. However the Fire Service do not require their presence and will likely recommend that all staff evacuate, clearing the building and closing the doors to restrict air supply to the fire, leaving fire crews to tackle the blaze on arrival - putting safety before property.

If extinguishers are present, they should be regularly checked (at least annually), refilled (mostly three yearly) and pressure tested (five yearly), with checks and certification recorded by a licensed service provider using the appliance's tag.

Flooding risks:

The Hawke's Bay Cyclone Gabrielle experience shows that flooding can be a serious threat even in suburban environments. One of our customers, Genesis Nurseries, lost their site office in Hastings District just weeks after they moved into a serviced office in the HIVE.

Checking the flood risk for your building in the Hawke's Bay flood hazard portal is a great start to understanding then mitigating any flood risk. Have a schedule for clearing gutters (especially on flat roofs), clearing drains and emptying sumps (especially for large sealed carparks). At Hastings HIVE we also regularly have the grey water drains flushed through to the street connection.

Risk mitigation with insurance:

Your last line of defence is insurance, so we again asked William Horvath, branch manager from ICIB insurance brokers in Havelock North, and a HIVE customer for more than a year, for advice.

William says, "Most intrinsic risks to business assets are covered by a material damages policy and are divided into two categories: normal perils like fire and flooding, and natural disasters, such as earthquakes, volcanic eruptions, tsunamis, subterranean fires and hydrothermal activity."

"Do realise EQC only covers residential buildings, so natural disaster cover for commercial premises needs to be covered under a material damages policy. Understanding what (if any) land, building and contents are covered, excluded or have some 'write back' cover can be critical."

He also advises tenants particularly, to understand who is covering key office facilities against loss. "It pays to check whether the fit out, furnishing and IT cabling installed for the occupant is covered by the landlord's insurance (which the tenant usually pays for). If not, an event could result in hundreds of thousand of dollars of uninsured losses."

Your editor asked about practical mitigation strategies for intrinsic building risks. William advised, "Planning for business continuity is a key one and having a register of the main risks. Then address each risk with business continuity actions. Things like placing your IT systems in the 'cloud', and providing staff with laptops and mobiles, rather than desktops and desk phones. Hold trials with your staff working remotely - don't wait until a disaster or peril occurs. We've seen serviced offices and coworking spaces providing some awesome backup, if they have availability." *

"Business interruption insurance is the other main strategy ICIB recommend. We liken this to ACC cover for business. Realise this only pays out in an insurance event that triggers the material damages policy, but it will cover any loss of income plus outgoings, necessary OPEX and staff costs for however long the cover is arranged for, typically up to two or even three years. It can also cover any increased cost of working, as a result of having to relocate."

William suggests contacting an experienced broker who can prove their worth in helping clients understand their cover needs for this complex and specific area of insurance.

Such precautions may sound onerous, but a modern serviced office and shared space is able to deliver corporate standards when it comes to workplace resiliency, and the safety of your staff and assets. Something small organisations in older buildings find hard to achieve or afford.


If after reviewing this article, you would like to consider renting a serviced office, we've made your research easy with our quarterly updated list of Coworking Spaces in the Hawke's Bay

Or do please Contact Us for a personal tour of Hastings HIVE. A large, modern, shared workspace with 23 serviced offices safeguarded by corporate standard building and services resiliency.

* Hastings HIVE provided emergency accommodation for some large businesses (like Meridian Energy) and for small businesses, following the February 2003 floods.

You can read more here: Business refugees

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