See the Full Issue
May 2022
Future-Proofing
With a changing climate already affecting veterinary hospitals, protecting the investment in buildings and business becomes paramount. Insurance may drive some of the updating as larger, more frequent, and unusual weather events are prompting higher premiums and tighter policy language. Best practices can help avoid or mitigate potential problems.
Is Your Veterinary Hospital Ready for a Changing Climate?
With a changing climate bringing more extensive and severe weather disruptions, veterinary hospitals may want to consider that familiar investing advice: “Past performance is no guarantee of future results.”
A quick glance at US data from the National Oceanic and Atmospheric Administration (NOAA) shows why. Between 1980 and 2021, there was an annual average of 7.4 weather and climate disaster events that had losses exceeding $1 billion each. The annual average for the most recent five years, 2017–2021, is 17.2 events (Consumer Price Index–adjusted). In 2021, there were 20 such disasters.
So how can veterinary hospitals future-proof?
“It can seem overwhelming to figure out,” said Nicholas Rajkovich, PhD, AIA, assistant professor, Department of Architecture, University at Buffalo. For those who want to do their due diligence on their property, he said, they could start with their county’s all-hazards plan.
“Each county in the country has to produce an all-hazards plan every few years. Those plans will show how the hazards will change over time from such things as climate change and where damage has occurred.”
“The building (addition to the University of Wisconsin-Madison School of Veterinary Medicine) has been designed to be climate-responsive in both architecture and the engineering systems that support it.”
—MARC WALKER, FLAD ARCHITECTS
He suggested that hospital owners talk with an engineer or an architect or consider training themselves. The Federal Emergency Management Agency (FEMA), for example, offers classes and an online resource library about the hazards of concern in specific areas.
In addition, the Climate Resilience Toolkit, developed by NOAA in partnership with the US Global Change Research Program, has information about building healthcare resilience for a changing climate and, he noted, provides real-life examples of change.
Lesson Learned
One example is the Texas Medical Center, 80 miles inland from the Gulf of Mexico, in downtown Houston. In 2001, Tropical Storm Allison dropped more than 40 inches of rain in 15 days. Everything failed. The 700-acre complex, which includes 13 hospitals, was shut down. About 30,000 research animals housed in the basement of Baylor College of Medicine drowned.
Lessons learned meant all critical infrastructure and program areas had to be relocated above projected flood elevations, a long-term hazard mitigation plan had to be created and implemented, and a new heat and power plant managed by an independent campus company had to be placed above the anticipated flood elevation on campus.
A solar-powered system now monitors subsidence (the sinking of land when more water is withdrawn from the ground than replaced because of impermeable surfaces), new buildings have to be set at safer elevations, submarine doors (steel barriers sealed with rubber bladders) have been installed, and green space and water absorption have been improved.
In 2017, Hurricane Harvey tested those changes—51 inches of rain over 5 days. The campus suffered minimal flooding.
“The rightful focus on climate has highlighted the increasing need for all businesses, especially those like animal hospitals that provide critical care, to adapt to be more resilient,” said Chuck Miccolis, managing director of Commercial Lines, Insurance Institute for Business and Home Safety (IBHS). The nonprofit 501(c) organization supported solely by property insurers and reinsurers conducts building safety research.
“What we build today must withstand not only today’s weather, but the weather we will face decades from now,” noted Miccolis. “By investing in our buildings, we can reduce the disruption of storms on our businesses.”
He advised veterinary hospitals to first have a business continuity and severe weather plan so all employees are prepared to take key actions before and immediately after severe weather. IBHS offers free online tools to help develop those plans.
Next, he suggested, focus on the property. IBHS has strategies to combat the four research perils on which it focuses: wind, hail, wildfire, and rain. (See Perils sidebar). For owners planning a new hospital, capitalize on the opportunity to adapt for future climate resistance since the added cost is typically modest during new construction.
Insurance Policies Tightening, Changing
Insurance also could be a driver to future-proof as that industry wrestles with determining its business model under the threat of a changing climate. Veterinary hospital owners may face rising premiums or, with continuous disasters, find that insurers are unwilling to cover their properties.
Guidance Available Online |
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“We are seeing a shift in underwriters’ perceptions of what ‘target zones’ are for severe weather,” said Scott Fouts, senior vice president of Risk Services, US for HUB International, the largest provider of insurance solutions for veterinarians and animal hospitals and a preferred provider for AAHA members.
“Traditionally, the biggest concern has been related to coastal geographic areas and potential exposure to hurricanes, storm surges, and straight-line winds. We are seeing an increase in catastrophic losses in other areas due to wildfires, flooding, and tornadoes. Some of the losses are uncontrollable and are due to excessive drought and possible climate change,” he noted.
“To compound the problem is the effect of human intervention: increased construction in interface zones, a lack of preventive maintenance of power lines and vegetation, and lack of water management,” said Fouts. “As an example, the impact of the 2021 ice storm that paralyzed Texas was compounded due to the lagging powerline infrastructure and planning.”
Many factors are driving the insurance market right now, he noted. A higher frequency of natural disasters, human-related losses from fires and explosions, higher cost of reinsurance, increased claims costs because of labor and materials costs, and very low investment income all create the need for more careful underwriting. Carriers, he said, will be protecting their books, and additional loss control and underwriting scrutiny will continue.
“Climate-driven events are prompting changes in commercial property insurance policy wordings and tighter terms and conditions as insurers try to manage an increase in the frequency and severity of natural catastrophe losses,” explained Michelle Windhauser, HUB International senior vice president and central region property practice leader.
“Some of the policy language includes ‘change in temperature.’ Some insurers are moving to refine or restrict coverage after a freeze event like the one in February 2021 in Texas. We have also seen deductibles increase for earthquake, flood, named storms, and wind/hail.”
Insurance carrier underwriters and risk control are looking for prevention, mitigation, and better disaster response as a standard qualification to insure clients in disaster-prone areas, she noted.
Products/Techniques to Prevent/Mitigate
“We are seeing much more attention to building engineering and more robust building codes to enable structures to better withstand catastrophic weather and natural events,” noted Dave Barthel, vice president, HUB Risk Services, Canada.
“For example, for earthquakes, we are seeing new products and engineering techniques that allow buildings to perform to a higher standard. Often after an earthquake, the risk of fire is increased. Automatic seismic gas shutoffs reduce post-event fire risk. Seismic protection for sprinkler systems allows for similar flexibility in the piping for building movement,” he said.
“In coastal areas with hurricane-force winds, products such as hurricane-force laminated windows minimize the damage from airborne debris. Roof straps help reduce the chance for uplift and the likelihood of damage during these events,” added Barthel.
New building codes and construction practices have included raising buildings above flood levels and expected storm surge areas and installing flood barriers around doors and windows, he noted. With more people moving to rural areas, carriers are recommending barriers like walls and ponds, removal of brush, and vegetation management to eliminate combustible sources.
Due Diligence Needed
Owners considering moving or setting up new locations should talk to their insurance broker before deciding on a location, suggested Windhauser. Finding the perfect location to serve customers is important. However, costs can be saved by looking at whether the location is in a designated flood zone or is potentially exposed to other catastrophic weather events.
“Try to comply with any critical or important recommendations from your carrier risk control as soon as possible,” she noted. “If budgeting for large expenses is an issue, commit to a timeline and communicate your plan to the carrier underwriting. Don’t ignore it. This will help the underwriter better qualify your account as a good risk.”
Carriers are expecting that the practice management has assessed the risk to its operations, people, patients, data, and property, explained Matt Gilmore, senior vice president, HUB Risk Services, US.
“Clients in natural hazard–prone areas need to have developed business continuity plans, emergency response plans, and disaster recovery plans,” Gilmore said. “The plans should be in writing and reviewed often to assure that vendors and other resources are current.”
“Plans should include ways to relocate assets and patients to alternative locations outside of the storm area or to temporarily suspend some services/care until the hazard subsides. Your business or property may not be directly impacted, but you may suffer from contingent business interruption, such as difficulty in getting staff members in to care for boarded patients or in obtaining critical supplies due to supply chain issues,” noted Gilmore.
“Businesses that develop risk-management plans, which may include business continuity plans or disaster recovery plans, are perceived by insurers as being better prepared,” said Gilmore. “Being knowledgeable and prepared may allow business owners to get the insurance coverage they need as well as give them the confidence that their business will be able to weather potential events in the future.”
Preparing for the Future
Recognizing that climate change is already affecting its region, the University of Wisconsin-Madison has planned for potential weather hazards in the new 140,000-square-foot, 3-story addition to its AAHA-accredited School of Veterinary Medicine and its small and large animal hospitals, according to Mark Corey, principal-in-charge at Flad Architects, which is leading planning and design in association with Foil Wyatt Architects & Planners.
Help Control Premium Increases |
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While each business account is underwritten on its own merits, there are several areas to consider to help control insurance premium increases, according to Matt Gilmore, senior vice president of HUB Risk Services, US. They include: Use data analytics: Have your underwriter check catastrophe modeling results to see if you are either purchasing too much or underinsuring your exposure. Using modeling results to make data-driven decisions can provide improved balance sheet protection. Increase deductibles: An increase in the “all other perils” deductible or in certain catastrophe peril deductibles can help mitigate increases in rates. Self-insure part of the risk: Retaining a portion of the risk is a consideration for some insureds based on their organization’s risk tolerance. Split insurance programs: Create a separate catastrophe peril policy to create competition between the “Property” and “Difference in Conditions” marketplace to improve program costs. Drive competition: If you have more property insurance program options available to you, you can influence the negotiations. To do that, a hospital owner needs to understand if the business is located in an area prone to catastrophic weather and to develop plans likely to reduce the impact. |
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Climate projections include increased frequency and intensity of poor-air-quality days, extreme high-temperature events, and heavy rainfalls. Those changes will extend pollen seasons and modify the distribution of disease-carrying pests and insects, according to Kim Reddin, Flad director of sustainability.
“The building has been designed to be climate-responsive in both architecture and the engineering systems that support it,” explained Marc Walker, Flad design principal. “Its geometry and fenestration were selected to maximize daylight and views yet limit specific exposures to reduce the impact to the heating and cooling loads.”
“The engineering systems use variable-volume mechanical systems and demand-controlled ventilation to reduce air change rates for unoccupied spaces and leverage multiple types of energy recovery for pre-conditioning of ventilation air. Open public spaces such as waiting areas use in-floor radiant slabs,” explained Jason Atkisson, principal at Affiliated Engineers, Inc. the MEP engineering consultant.
The addition has a modeled energy-cost savings of $34,000 annually, which will be a 5.8% energy cost savings when compared to a state code-compliant building.
The building elevation was selected to offer protection from frequent flooding in that portion of the campus, said Ross Pinski, Flad landscape architect. Pervious paving, bio-infiltration planters, and overflow drainage strategies are parts of the exterior development solutions. A second-level green roof terrace with native plants will act to absorb and slow stormwater flow.
To mitigate flooding hazards and reduce impacts to the stormwater system, a water reuse system will collect rainwater from the roof as well as clearwater condensate from air handling cooling coils, according to Atkisson. The system’s water will be used to irrigate the building’s green roof and site as well as for trench flushing and washdown hose connections in animal holding areas.
A campus distribution system will supply primary power and thermal utilities for the addition, providing an increased level of resilience and redundancy. The utilities will be located underground to protect from weather-related events. In addition, a diesel-powered emergency/standby generator will support critical program needs if there is a loss of primary power.
With the addition not expected to be completed until 2023, the continuity of operations plan does not yet address the space, according to Kristi Thorson, associate dean for advancement and administration, UW SVM. No significant changes to the school’s overall plan are anticipated, she said, but the additional square footage will create new flexibility for where various functions can be performed and improved capabilities related to backup power. 
Research-Driven Suggestions
Chuck Miccolis of Insurance Institute for Business and Home Safety (IBHS) suggested that those planning a new hospital build it to the FORTIFIED Commercial standard, which incorporates years of IBHS research and engineering insights into an above-code building standard. He also offered these suggestions:
Two commercial buildings inside the IBHS large test chamber: one built using common construction practices and the other using stronger wind-resistant methods and materials. The buildings were subjected to high winds modeled after real-world thunderstorm and hurricane events.
Wind
When replacing a roof, consider a roof cover that has been wind tested and is an approved system showing it can withstand winds likely for the area. Ensure the roof system is strengthened with more fasteners and locked-down edge detailing. Include stronger gutters and downspouts to protect valuable equipment inside the veterinary practice.
Pay special attention to roof-mounted equipment like air conditioners to be sure they are mechanically secured with bolts. Use impact-rated windows and exterior doors to help keep out the wind and resulting pressure buildup that can cause structural damage.
Rain
Seal cracks and gaps around windows. Keep drains, downspouts, and gutters clear of debris so rain can be properly diverted.
Hail
Use an impact-rated roof covering to reduce the impact of hail damage. Consider protecting HVAC equipment with hail guards, shields, or wire mesh.
Wildfire
No one action alone can protect a building from fire damage, but the right series of actions can reduce a building’s risk. Have a Class A fire-rated roof, clear debris from gutters, create a zero- to five-foot zone around the building that is clear of all combustible materials, add 1/8th-inch metal mesh screens over vents to keep embers from blowing into the building, and shut off air conditioning systems to prevent embers from entering the building.
Extreme Cold/Snow
While not one of IBHS’s four research perils, weather extremes now call for attention to cold and snow in areas not usually known for them:
- Protect pipes either with proper insulation or by shutting off and draining them.
- Install a furnace monitoring system so an alert is provided if it shuts down.
- Install an automatic excess flow valve to detect broken pipes or valves and water leak detectors to shut off the main valves.
- Use wireless sensors to monitor for water tank or appliance leaks.
- Know your building’s snow load or hire a structural engineer to verify.
- Regularly inspect and maintain automatic sprinkler systems.
Maureen Blaney Flietner is an award-winning freelance writer living in Wisconsin. |
Photo credits: Hankimage9/iStock via Getty Images, Project Renderings by Marc Walker, Design Principal, Flad Architects; Photo courtesy of IBHS