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IMIA Paper – Modern Skyscrapers – July 2012
WGP 76 (12)
IMIA Working Group Paper
MODERN SKYSCRAPERS
IMIA Conference 2012,
Rio de Janeiro
Working Group
Tom Wylie (Zurich UK)
Jeremy Terndrup (Willis)
Joe Haddad (Precision s.a.l.)
Oliver Hautefeuille (SCOR)
Gero Stenzel (Partner Re)
Rupert Travis (Cunningham Lindsey)
Eric Brault (AXA)
Chairman:
Mladen Šošić (Nationale Suisse)
EC Sponsor:
Christoph Hoch (Munich Re)
IMIA Paper – Modern Skyscrapers –2012
Table of Contents
1. Executive Summary ............................................................................... 3
2. Introduction ............................................................................................ 4
2.1 Historic Development of Modern Skyscrapers ..................................................... 4
2.2 An Overview of Iconic Skyscrapers ..................................................................... 5
2.3 The Social and Ecological Impact of Tall Buildings ........................................... 13
3. Structure, Material and Building Technique......................................... 14
3.1 Foundations and the Excavation Pit .................................................................. 14
3.2 Structure of the Main Skeleton, Design and Material ......................................... 17
3.3 Façade, Design Material and Anchoring ............................................................ 19
3.4 Fit-Out and Finishing Works .............................................................................. 22
3.5 Mechanical and Electrical Equipment in Building .............................................. 23
4. Risk Management ................................................................................ 26
4.1 Passive Risk Management measures................................................................ 26
4.2 Active Risk Management Measures .................................................................. 29
5. Insurance Cover ................................................................................... 35
5.1 CAR – Property and Material Damage Cover .................................................... 35
5.2 Third Party Liability (TPL) Cover........................................................................ 35
5.3 Delay in Start-up (DSU) / Advanced Loss of Profit (ALoP) Covers .................... 36
6. Underwriting Considerations ................................................................ 37
6.1 Underwriting Information.................................................................................... 37
6.2 Special Considerations for Material Damage Cover (CAR) ............................... 38
6.3 Special Considerations for Third Party Liability (TPL) ....................................... 40
6.4 Special Considerations for Delay in Start-Up (DSU / ALoP) .............................. 41
6.5 Skyscrapers and Decennial / Inherent Defect Insurance (IDI) ........................... 41
6.6 MPL Assessment for Skyscrapers ..................................................................... 43
7. Claims, Loss Control and Loss Prevention / Mitigation measures ...... 45
7.1 Introduction ........................................................................................................ 45
7.2 Loss Prevention / Mitigation measures .............................................................. 47
7.3 Claims and Loss Experiences ........................................................................... 49
7.4 Fit-Out: Claims Issues ....................................................................................... 50
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IMIA Paper – Modern Skyscrapers –2012
1. Executive Summary
We have observed some substantial changes in use and purpose of Skyscrapers over the
last 100 years. We can also see that the locations of the new Skyscrapers are
geographically shifting more and more eastwards, towards the new and emerging
economies in Asia.
We know that historically the development of high-rise buildings was closely connected
with the need for more living and working space in overcrowded US metropolises and
agglomerations (e.g. New York, Chicago…).
Whilst today this remains one of the driving forces, it is no longer the main one. We see
more and more Iconic Skyscrapers mushrooming all over places where there is no
problem with lack of space (e.g. Dubai, Mecca, Taipei, Kuala Lumpur, Abu Dhabi, Seoul,
or even London…). It is clear that today’s Skyscrapers are increasingly built as a
statement as opposed to the response to a practical need. They are the representative
Icons of a certain city, society, culture, company or individual.
As a result Skyscrapers architects have sought to design more stunning architectural
forms and this in turn has driven engineers to develop the new and impressive high-tech
materials necessary to build such structures. The buildings must ultimately draw the
attention; no longer is it enough simply to be the tallest in cityscapes increasingly
dominated by very tall buildings. Today’s statements are made by expensive forms and
materials which ultimately increases the investments and the value of such projects.
For us, as the insurance and reinsurance community, this development brings a
transformation of the two very important risk factors:
a. The value at risk is soaring and the projects need higher insurance capacity
b. The complexity of the work and therefore the risks in construction are increasing
We wanted with this paper to outline the new situation as we see it, and to highlight some
of the insurance considerations and solutions that can be applied as this trend towards the
construction of Iconic Skyscrapers develops worldwide.
For the benefit of all IMIA members we have tried to collect the important aspects, even
though we repeat some older, well known facts about the insurance of high rise buildings
which remain valid today.
We hope this paper will find a place in our community as a good technical fundament and
a stimulus for further thinking, discussions, leading to the development of ever more
appropriate insurance solutions for high rise buildings and modern Skyscrapers.
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IMIA Paper – Modern Skyscrapers –2012
2.
Introduction
2.1 Historic Development of Modern Skyscrapers
In the late 19th century, the first skyscrapers would have been typically an office building
of more than 10 storeys. The concept was undoubtedly originated in the USA, in Chicago
and in New York, where space was limited and where the best option was to increase the
height of the buildings. The Home Insurance Building in Chicago was perhaps the first
skyscraper in the world. Built in 1884-1885 its height was 42 m/10 storeys. Designed by
Major William Le Baron Jenney, a graduate of l’Ecole Centrale des Arts et Manufactures
de Paris, the structural skeleton was a bolted steel frame without bracing supporting the
loads coming from the walls and the slabs, founded on a raft. This led to what is known as
the “Chicago Skeleton”.
As a consequence of further developments in construction engineering and progress in
the steel industry, the American Security Building was built in New York by Bruce Price 10
years later. This was a 20 storey/ 92 metre building, but in this case the frame was braced
and riveted.
Major William Le Baron Jenney established what became known as the First Chicago
School to which also belonged Louis Sullivan and Daniel Burnham, both trained with Le
Baron Jenney. It is worth noting that the Wainwright building built in Saint Louis, Missouri
in 1881 designed by Louis Sullivan is according to some the first true skyscraper.
Between 1880 and 1920 another architectural school known as “les Beaux Arts”, by
reference to Les Beaux Arts of Paris developed. Its influence can be seen on buildings
such as the Park Row and Flatiron buildings in New York. The Flatiron building, (22
storeys/87 m), was designed by Daniel Burnham and the engineer Fuller (it was also
known as the Fuller Building). At this time construction in Chicago was limited to 10
storeys, however, no such restriction existed in New York. Consequently New York
emerged as the leading city for skyscrapers, welcoming visitors with the sight of its unique
skyline.
Later a group of architects and engineers that included Mies Von der Rohe, I M Pei and
Fazlur Khan (Skidmore Owings and Merrill) became known as the International School
and developed skyscrapers further in the Fifties and beyond. Progress in technologies
and materials allowed different construction methods and architectural design changed
dramatically; curtain wall, glass panel, and tube support. Skyscrapers would not have
been possible without the development of the elevator, by Elisha Graves Otis in 1851.
Further progress in design, materials and construction methods has enabled the transition
from skyscraper to the “super tall” and unique structures that we see in skylines across
the world today.
Such is the rapid progress that these buildings constantly provide challenges for all
involved, including the insurance industry. Many buildings by nature incorporate
prototypical or innovative elements and often local construction codes cannot keep pace
with such development.
A good example is the case of the John Hancock tower in Boston. This is an interesting
case to study from an underwriting perspective, as the damage which affected this
building could be covered by a modern construction policy wording.
The building was completed in 1972, to a height of 241m/60 storeys. At the time the
building was the tenth tallest in the world. It has been reported that the building suffered
problems with the foundations, structural failures and an excessive failure of the glass
curtain wall. While glass breakage is not unusual for this type of building, the problem was
such that all the glass panels of the curtain wall required replacement after completion.
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IMIA Paper – Modern Skyscrapers –2012
During the investigation it was also discovered that the buildings dynamic response to
strong winds was excessive, creating a swaying motion. The problem required the
addition of two mass dampers as well as additional stiffening. An historic church dating
from 1877 and underground utility lines were also damaged as a result of the foundation
works. It required 3 years to solve all of the problems, during that time the building was
unoccupied causing the owner significant consequential loss.
The numerous issues suffered by this building demonstrate clearly the challenges
encountered in the construction of tall or super tall buildings. Wind tunnel testing would
almost certainly be carried out at the design stage today for similar structures in order to
model wind, rain and snow effects on the building.
Historically skyscrapers were mostly used as commercial offices, today many buildings
are constructed with multiple occupancies in mind; offices, hotel, residential, shopping.
This paper aims to provide insurance professionals with an understanding of the risks
associated with modern skyscraper construction.
2.2
An Overview of Iconic Skyscrapers
Following a relatively quiet period, construction of mega skyscrapers recommenced in the
years following 2000. Not only are these buildings tall, they are iconic, displaying striking
and ground-breaking design. Many of the new iconic buildings are no longer simply
offices; they now incorporate retail, commercial, hotels, residential and even
transportation hubs. It is no longer simply about building taller, it is about building so
called “vertical cities”.
Following the events of 9/11 and the destruction of the Twin Towers in New York, there is
an emphasis on designing stronger and safer buildings. Most new skyscrapers
incorporate many of the NIST (National Institute of Standards and Technology)
Recommendations. Buildings are now also constructed with sustainability and
environmental issues in mind. New, improved and recycled materials are contributing to a
new age in construction.
Tall buildings continue to make statements however the statement is no longer just about
the tallest as can be seen by unusual designs such as Marina Bay Sands in Singapore
and Capital Gate in Abu Dhabi. Buildings are now incorporating “sky lobbies” with integral
and even rooftop gardens. Rain and waste water is being captured and recycled. New
developments in façade design simultaneously reduce the impact of wind, heat and direct
sunlight, innovative and intelligent building management systems interact with these to
generate renewable energy or capture the natural heat and light to reduce the energy
needs of the building.
Many buildings now have their own co generation plants and wind turbines as well as
solar panels or hydrogen fuel cells, contributing to their own energy usage.
The following demonstrates the main features of some iconic structures recently
completed and under construction, together with developments in building standards and
fire safety.
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Burj Khalifa – Dubai (2010) – 829m
High Level Facts
 Constructed in 6 years
 US 1.5bn, part of Downtown Dubai overall cost of
USD20bn
 World’s tallest building
 163 storeys
 World’s fastest elevator at 40 mph
Construction
 45,000 square metres of concrete weighing in excess of
110,000 tonnes
 12,000 workers working on it at its peak
 100 different nationalities worked on it highlighting the
issues with diversity of language
 192 43m deep,1.5m diameter piles
 Pressurised/air conditioned refuge floors at every 35 floors
Sustainability
 Condensation will be collected and used for the irrigation
system providing almost 4m litres of water per year
 Solar power heats 140,000 litres of water per day
 Pressurised and air conditioned refuge areas every 25 floors
Insurance Challenges
 Height and wind impact
 Pumping concrete at a pressure of 200 bars
 Ensuring this was done successfully and cured properly given the extremes of
heat/cold.
 Corrosive groundwater
International Commerce Centre - Hong Kong (2010)
– 484m
High Level Facts
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Constructed in 8 years
USD3.75bn
118 storeys
Worlds highest hotel – Ritz Carlton
JV with MTR
So called “Transit Integrated Tall Building” – transit
connections via Kowloon Station Development to:
Hong Kong International Airport
Mainland China via High Speed Rail
MTR
Ferry and buses
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IMIA Paper – Modern Skyscrapers –2012
Construction
 First building in Hong Kong to employ shaft grouted friction barrette piling system – 34
piles
 76m Diaphragm wall
 5 workers killed in work platform incident
Sustainability
 Low emissivity glass reflects ultra violet light and deflects heat
 Elevators use passenger smart card system allocating lifts to groups of people with
the same floor destination
 Condensed water fro air conditioning used for toilet flushing or cooling towers
Marina Bay Sands - Singapore (2010) – 207m
High Level Facts
 Constructed in 3 years
 US 8bn
 10M Square foot integrated resort
 340 metre long rooftop Sky Park
 57 storeys
Construction
 Sky park has 66.5m cantilever and 150m long
swimming pool
 4.5 metric tonne damper protects cantilever
from human excitation
 Multi directional bearings protect the Sky Park
structure from 250mm building sway
 Adjustable jacks maintain the Sky Park against
settlement
 80m long 1.7 metric tonne girders lifted by
hydraulic jacks at 14m per hour
 50m long piles support the foundations on
reclaimed land within 120m diameter
diaphragm wall
Sustainability
 Double glazed curtain wall façade reduces heat absorption by 20% on the west side.
 East side planters create microclimate
Insurance Challenges
 Constructed in 3 years
 3 buildings connected by the Sky Park, movement of buildings in relation to each
other and the Sky Park in relation to wind impact
 Huge Cofferdam in reclaimed ground
 As part of the towers were built at an incline there was always the danger that they
could collapse in on themselves
 Lifting of the Sky Park Sections
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Taipei 101 (2004) – 449m
High Level Facts
 US 1.8bn
 Includes both indoor and outdoor observatories
 Elevators are aerodynamic and fully pressurised
Construction
 High performance steel (inc. 8 mega columns)
 Every 8 floors, outrigger trusses connect the columns to
the building’s core
 380no. 80m long piles support the foundations
 101 storeys above ground & 5 basement levels
 Uses a 660t steel pendulum as a damper to reduce the
effect of strong gusts
 Two additional dampers each weighing 6t sit at the tip of
the tower to prevent wind damage
Sustainability
 Awarded Leadership in Energy and Environmental
Design Platinum Certification
 Designed to resist 1:2,500 yr earthquake, has already
survived a 6.8 magnitude earthquake during construction in 2002
 Double panel glazing reduces heat absorption by 50%
Insurance challenges
 Earthquake and Wind, Height and need to pump concrete to high levels
Capital Gate – Abu Dhabi (2011) – 165m
High Level Facts
 US 8bn, 57 storeys
 Most inclined building in the world at 18 degrees
 leans more than leaning tower of Pisa at 1.22 deg.
 340 metre long rooftop Sky Park
Construction
 13,200 tonnes of steel including 7,000 tonnes
structural diagrid systems
 720 5 tonne diamond shaped diagrids
 Cantilevered tea lounge at 80m
 External infinity pool at 19th
 Pre cambered core, Every floor plate is unique
creating twisting form
 490 30m deep piles
Sustainability
 Low Emissivity glass – keeps building cool and
eliminates glare
 Stainless steel splash keeps 30% of heat away
 Air is pre cooled between inner and outer facade
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Digital Media City Building/Seoul (2015) – 640m
High Level Facts
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US $2.9bn
Tallest observation deck at 540m
10,000m2 interactive aquarium largest in world
Construction
Bamboo type structure, with heart section left empty,
increases resistance to bending, thus enhancing
resistance to earthquakes and wind vibration
Concrete structure clad in glass and aluminium
Sustainability
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Green roof top will provide heat insulation effect
Automatic ventilation will aid supply of fresh air and
save energy
Internal mirrors will direct sunlight toward lower floors
Photovoltaic generation on side walls to provide
power and also act as shading
Building energy requirement reduced by up to 65%
Shanghai Tower/Shanghai (2014) – 632m
High Level Facts
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US $2.2bn
Due to be 2nd tallest building in world after Burj
Khalifa
9 cylindrical buildings stacked on top of each other
enclosed by an inner glass façade
High speed elevators due to be fastest in world
Construction
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Design of glass façade will reduce wind loadings by
24%, which reduces the structural steel by 25%
Concrete core with structural steel frame
Sustainability
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Double layered façade will allow building to remain
opaque without associated heat absorption problems
Vertical axis wind turbines will generate 350,000 kWh
per year
Spiralling parapet collects rainwater used in M&E
systems
Restaurants, shops, offices, hotel and residential
spaced throughout the building
Refuge area every 9 floors
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Abraj Al-Bait Towers/Mecca (2011)
– 601m Mecca Royal Clock Hotel Tower
High Level Facts
 US $2bn
 Currently 2nd tallest building in world after Burj
Khalifa
 Tallest Hotel in the world
 Tallest clock tower in the world
 Largest internal floor area in the world –
1,500,000m2
 Each clock face is illuminated by 2m LEDs and
are 40m in diameter, largest clock face in the
world
Construction
 Composite towers form overall building
 Concrete Frame
 Two large fires occurred during construction
one burned for over 10 hours
 Highest tower 120 storeys
Insurance Challenges
 Some residential areas were being let for
occupation whilst construction continued on the floors above
Busan Lotte World Tower Busan, South
Korea (2016) – 510m
High Level Facts
 US $4bn
 110 storeys
 Described as a compact city duty to range of
uses/services being incorporated
Construction
 Concrete Frame
Sustainability
 Natural ventilation
 Thermal regulation
 Double Skin with louvers
 Sea water cooling system
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Freedom Tower NYC (2013) – 541.3m
High Level Facts
 US $3.2bn, 104 storeys
 Described as a compact city duty to range of
uses/services being incorporated
 Xenon lamps will flash the letter ‘N’ for New York,
they will be seen up to 26 miles away
Construction
 Massive redundant steel moment frame paired with a
massive concrete shear wall – provides column free
interior spans
 Concrete (5,660m3)/Steel (40,800t)
 First use of 14,000 psi concrete in New York
 Must bridge a myriad of pre-existing underground
structures including the New York subway. Structural
steel used to as permanent formwork
 Fire proofing exceeds code requirements structural
elements are protected by up to 3m of concrete
Sustainability
 Geometrical taper of tower reduces wind loads and therefore amount of steel required
 Individual tenant electricity supply meters are being installed to encourage tenants to
reduce usage. The building will be partially powered by Hydrogen fuel cells
Insurance Challenges
 Operational Subway
 Basement level structures obstructed foundations
Shard London (2012) – 310m
High Level Facts
 £450m approx
 72 habitable floors plus 15 radiator floors in the roof
 Tallest building in the European Union
 Designed with WTC collapse findings in mind
Construction
 Concrete Core with Structural Steel Frame
 Entirely clad in glass
 Bill Price (WSP) – Designer of the Shard says “Improving
active and passive fire protection, recognising the
importance of structural redundancy and providing sufficient
means of escape to buildings are the three key areas of
change”
 Prof Barbara Lane (ARUP Fire Group) says “A huge
amount of work has been done with computational analysis
to model what’s likely to happen in a fire… traditionally you
applied fire protection to a certain fire rating and hope for
the best, now we have the tools down to the detail of what
joints are being produced…”
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IMIA Paper – Modern Skyscrapers –2012

Non shattering intumescent paint firmly bonded to steel members
Sustainability
 Designed to use 30% less energy than equivalent buildings
 Triple glazed, low iron laminated to reduce effects of infra red radiation
 Features computer controlled glass fibre roller blinds to reduce solar radiation by 95%,
thus reducing the need for air conditioning
 Night cooling will be used to dissipate heat at night
 Will include a micro CHP unit to supplement energy usage
Insurance Challenges
 Very tight site with considerable third party exposure
 Radiator floors fabricated offsite and lifted into position in large units up to crane limits
Songdo City (IBD) South Korea (2015)
High Level Facts
 USD $30-40bn approx over 10 years
 1,500 acres of reclaimed land of which
40% will be open spaces
 50m sqft of office space, 10m sqft of
retail space, 80,000 apartments
 CISCO will provide WAN access across
all infrastructure
Sustainability
 All development and construction
related activities mandated to achieve
LEED certification
 All open spaces optimised to access
sunlight and open sky
 Electric vehicle charging stations
 Zero emission buses featuring hydrogen
fuel cells
 Canals will be filled with sea water to
lower potable water demand
 Storm water runoff to be stored and used as required
 Vegetated green roofs to trap storm water and increase biodiversity
 LED traffic lights and energy efficient pumps and motors
 Centralised pneumatic waste collection system for wet/dry waste thus eliminating
requirement for waste removal vehicles
 PV cells used extensively to provide energy
 75% of construction waste to be recycled. Low VOC materials incorporated in all
buildings
Sustainability Issues
 Embodied energy within structure – The higher you go the worse the problem
 Elevators, Building Services, Access & Egress
 Agreement and suitability of ratings systems e.g. BREEAM/LEED etc.
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2.3
The Social and Ecological Impact of Tall Buildings
On the 11th September 2001 the world watched in horror as the events in lower
Manhattan were relayed live on television. Even before the dust had settled, the debate
had begun. This terrible human tragedy brought many to question the wisdom of man’s
fascination with ever taller and more spectacular buildings and some even predicted that
the “age of skyscraper” was at an end.
More than a decade later, many very tall buildings were under construction and still more
are being planned. In reality as the raw wounds from this tragedy began to heal, human
nature dictates that we analyse these events and look for the lessons to be learned.
Elsewhere in this paper you will find reference to new designs, new construction methods
and new materials all aimed at developing safer, more ecologically friendly, and you
guessed it, taller buildings.
Man’s love affair with the Skyscraper is still very much alive.
The events of 9.11 were relayed instantly to the world, however, whilst not perhaps not so
obvious, there are many other ways in which tall buildings have had an effect on society.
In the face of high demand and lack of building land, in the 1960’s many city authorities
turned to high rise buildings as a solution to their social housing problems. The
detrimental effect of such experiments in terms of psychological and physical health and
lack of social cohesion is now well documented. Many such “tower block estates” have
since been demolished and many of those that remain have sadly become ghettos
housing dysfunctional and troubled communities plagued by excessive levels of crime and
welfare issues.
The high cost of maintenance and the relatively high cost of construction have meant that
new high rise developments are now aimed at more affluent elements of society or
businesses who can afford to pay the high rents required.
The affluent and the office worker however are not immune to these health issues and
modern developments have included many initiatives designed to combat their perceived
causes.
Some of the most ambitious projects include varied occupancy, mixing residential
apartments with office space, retail outlets and hotels, all in the same tower, the ”Shard” in
London being a recent example. With the addition of sports facilities and community
centres, it is thought that this mixed function will create a more realistic “village”
environment, thereby alleviating the sense of isolation and alienation that is thought to
have led to many of the health and social issues observed in the past. The experiments in
high rise social housing in the sixties saw many tower block estates build on the fringes of
towns and cities without adequate transport systems, thus adding to the sense of
isolation. Most new developments are nearer the city centres or deliberately sited close to
existing or newly developed transport infrastructure. The construction of very large
structures in a confined space, often on top of or close to operating rail and road networks
does, however pose some considerable technical, logistical and risk management
challenges.
Whilst the world struggles to achieve agreement on the issues of Global Warming and
Climate Change, it is clear that many Governments are increasingly seeking to control the
“Carbon Footprint” of individuals and companies either through legislation or taxation. The
energy consumed in operating a tall building in terms of power, light, and air conditioning
systems alone are significant however in addition to this, the energy expended and the
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IMIA Paper – Modern Skyscrapers –2012
emissions produced in making the buildings must also be considered. The materials most
likely to be utilized in large quantities for the construction of a very tall building will be
Concrete, Steel and Glass all of which require a significantly higher energy consumption
than traditional materials.
These issues are increasingly being considered by architects and engineers when
designing today’s tall buildings whereby the relatively high energy cost of some
construction materials can be to some extent offset by innovative design giving the
building a more sustainable profile over its lifetime. The inclusion of thermal flues in the
facade design can be used to control temperature without the use of air conditioning. The
inclusion of Photovoltaic panels and wind turbines for electricity generation will reduce the
need for external power. The orientation of the building and the design of the facade can
greatly reduce the need for artificial lighting.
Whatever drives the demand for Skyscrapers, it is clear that such demand exists, however
it is also evident that social and ecological issues are more and more influencing the
design of these buildings. It is no longer simply a question of being the tallest; they must
also be user friendly, environmentally friendly and sustainable.
The new generation of tall buildings will undoubtedly bring challenges for the construction
industry as well as for their Insurers.
3.
3.1
Structure, Material and Building Technique
Foundations and the Excavation Pit
Skyscraper foundations are considerably more complex than those for normal buildings.
The complexity brought about by their height and weight can be further exacerbated by
design specific factors, the nature of the soil, exposure to wind and earthquake, intended
use and their location in relation to surrounding property.
Different project elements are frequently divided among several contractors and
consultants with specialists chosen for the foundations. Depending on the nature of the
structure, the type of foundation and the characteristics of the ground, the value of the
foundation / excavation can according to construction industry research be circa 7.5% of
the total project value. Managing quality and risk at this stage is crucial for the future
success of the project, consequently, the developer or client should seek to hire a world
class project and or programme manager in addition to experienced contractors and
consultants.
Geotechnical Parameters
The client will usually provide the tendering contractors with a detailed geotechnical report
highlighting the outcome of the investigation by geotechnical consultants incorporating
their recommendations. There may be a degree of uncertainty in the composition of the
ground beneath a building irrespective of the extent and detail of any site investigation
and associated laboratory testing. For this reason a worst case scenario should be
considered until it can be shown otherwise. Contractors and their own or externally
appointed geotechnical and structural engineers may use this report as the basis for
further investigation with a view to managing out risk, verifying modelling presumptions in
relation to dead and live loads and finding the best foundation solution to suit the specific
circumstances.
Foundation Structure
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The foundation is the supporting layer of a structure. The purpose of the foundation is to
spread the various loads (wind, seismic, dead and live) from the structure into the ground.
Different factors can influence the type and dimension of the foundations; soil type and
stiffness, water content, void ratio, bulk density, angle of repose, cohesion, porosity to
name but a few. Characteristics of the ground can also experience change due to the
geological history or previous construction activities. This can be a particular issue in
areas of seismic activity where the soil can become liquefied and / or on shores of seas,
lakes and rivers where there may be a constant ebb and flow or rising and lowering of a
river which influences the adjacent soil composition.
Additionally, the location in relation to other structures, weight of the building including all
fixtures and fittings, usage, the dimensions of the building and the loads for wind and
earthquake are important elements which are taken into consideration.
For high-rise buildings a deep foundation is necessary. It is used to transfer the huge load
from the structure through upper weaker layers of soil to the stronger deeper layers.
Foundations are formed by first clearing the site of previous structures or in the case of a
previously unused location, of trees, shrubs and other obstacles.
The next step is to create an excavation. The nature of the excavation will depend on
many of the aforementioned factors. In the case of a skyscraper, simple battered slopes
will not suffice and a temporary or permanent retaining wall will need to be installed The
retaining wall may serve several functions; supporting the excavation, protecting the
excavation from the lateral forces of the ground and the hydrostatic pressure of
groundwater, protecting adjacent structures against settlement and in some cases even
providing additional vertical support to the structure.
There are many different types of retaining walls:




Interlocking sheet piles; these can be temporary or permanent
Contiguous, secant piled walls, the latter more likely to be used in soft/wet soils
Diaphragm walls; particularly used in soft ground with high groundwater and/or
adjacent to other structures
Crosswalls; often used in addition to one of the above where is a particularly high
exposure to adjacent properties
Strutting, propping ground anchoring and bracing; used as extensive temporary supports
in deep foundations in addition to retaining walls, where there is high risk of excavation
failure and/or particularly high exposure to adjacent structures.
Again depending upon influencing factors and the management of risk, excavations and
basements may be formed by ether the top down method, the bottom up method or a
combination of the two. Top down has the advantage of being more economic as there is
a time saving element, it is also safer as the basement floor slabs are constructed as the
excavation progresses, strengthening the excavation as it deepens. This method is
typically used in deep foundations close to adjacent properties and/or in poor ground. The
weight and thickness of the base slab is crucial as this will protect the foundation from
heave or uplift caused by high water pressure.
It may be necessary to install a dewatering system to keep the excavation dry from
groundwater seeping in or rainwater.
Following or during the excavation, dependent upon the excavation method, piles for the
structure’s foundation will be necessary.
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Number and type of piles will be dependent upon numerous factors. In some cases the
piles are up to 1.5 meters in diameter and inserted 80 meters into the ground to reach
bedrock. The nature and positioning of the piles will also be influenced by the positioning
of the main supporting columns of the structure.
In some extreme cases, ground improvements will have to be made prior to piling by
injecting grout or a deep soil mix into soft ground or fissures.
Where there is a threat of seismic activity there may be the necessity to install additional
safety features such as viscous dampers within the foundation to protect the structure.
For underwriters it is important to have an understanding of the ground conditions and
how the construction parties will deal with the challenges. In many cases highly
engineered temporary works are necessary and it is important that specialist engineers
with strong knowledge in the area of ground engineering/geo-techniques are employed for
this role. Managing risk at this stage is crucial for the success of the structural works that
are to follow, but also to protect surrounding properties and the public from the potentially
disastrous impact of a failed excavation or foundation. Foundations structures and piles
should be checked by an independent checking engineer. Where there is the potential for
high groundwater, piezo-meters should be installed throughout the site to monitor the
levels and a suitable dewatering utilized, ideally with back up pumps. Where extensive
dewatering is needed due to high groundwater, it may also be necessary to strategically
position recharge wells around the site to protect other properties from settlement caused
by removing too much water from the ground. In areas where there is a potential for flash
flooding or overflow from adjacent watercourses the excavation perimeter should be
surrounded by a suitable flood protection scheme. Dilapidation surveys should be carried
out on adjacent properties to establish the nature and extent of any existing damage and
the potential for future damage. In some cases it may be necessary to underpin, prop or
grout to provide potentially vulnerable properties with additional support. A monitoring
regime should be introduced by the construction parties, ideally with the capability to
employ remote and real time monitoring of the settlement caused by the works. Suitable
predetermined alarm/action levels should be in place, coupled with an emergency
response plan.
Typically in the case of coverage for skyscrapers clauses should be considered which
address the following specific areas:




Piling
Dewatering
Vibration, weakening
or removal of support
Dilapidation
Figure 1: Shanghai, China :
Possible failure of the foundation,
June 27, 2009
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IMIA Paper – Modern Skyscrapers –2012
Figure 2:
Moscow, Russia:
Excavation /
cantilevered walls
3.2
Structure of the Main Skeleton, Design and Material
The development of Skyscrapers has been possible because of the progress made in the
materials and the development of new structural systems allowing improved technical
performance and also improved financial models, which have attracted more interests
from the property developers. The Council on Tall Buildings and Urban Habitat (CTBUH)
has conducted a survey of the tallest buildings and has noted, for example, that the John
Hancock building in Chicago uses 25% less structural steel per unit floor area than the
Empire state building.
If in the early days of Skyscrapers steel played an important role, today concrete, and
especially high performance concrete seems to be key in the project development and
definition.
To give the reader some figures: according to the same CTBUH journal, of the 100 tallest
buildings the number using steel has reduced by at least 15% each decade since 1970,
and in 2010 only 22% of the tallest building are steel.
The key issues with high performance concrete (high performance concrete is reinforced
concrete with a compressive strength at 28 days in excess of 50 MPa) relate to the quality
of the material and the expertise of the contractors. Only a few of whom are familiar with
these concretes. The controls on site must be quite strict and without compromise. The
columns of The Coeur Defense towers in the business district of Paris have a diameter of
1,10m and used a high performance concrete of 80 MPa.
When it comes to steel, the quality of the material is with the suppliers. On site the main
concern will be on the various assemblies. This is like giant meccano, however as often
these projects take place in a confined urban environment, logistics and third party
exposures are an important consideration.
In respect of structural systems, it is possible to define 6 categories:


The framed tube: system of rigid frames (flatiron building in 1903)
The bundled tube: combination of framed tubes (Sears towers, 1974)
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IMIA Paper – Modern Skyscrapers –2012




Tube in tube: central and peripheral tubes (World Trade Centre in NY, 1972)
Diagonalised: strussed tubes, diagrids/braced frames (Alcoa bld. in Chicago)
Core plus outrigger: central lateral system linked to the perimeter system through
outriggers (Petronas Tower, 1999 –Taipei 101, 2003 )
Hybrid: combined use of any of the above systems
Today more than 70% of skyscrapers have adopted a core + outrigger structural system.
Structural walls are indispensable elements of tall buildings, sustaining vertical gravity and
horizontal earthquake effects and wind loads. Local or standard building codes are not
usually suitable for the construction of these giants. Any attempt to apply them would
likely be incompatible with the architectural designs suggesting a quantity of materials that
would lead to an uneconomical model. It is therefore necessary for the design team to
model the building and test it in a wind tunnel to assess the local loads and the likely
deformations of the structure. Usually these tests are not limited to wind but can include,
when applicable, rain, snow and of course hurricane simulations.
Wind engineering is essential for skyscrapers and the risks cannot be adequately
reviewed if these tests have not been properly conducted. Alan G Davenport, a pioneer in
wind engineering (1932-2009) was influential in these works when working at the
University of Western Ontario. Mr Davenport used mathematical models and experiments
in wind tunnels to study the limits to which a building can lean before collapsing, how a
building can sway back and forth and the consequent effects on partitions, elevators,
occupants, etc. At the Boundary Layer Wind Tunnel laboratory (BLWTL) he and his teams
have conducted several analyses and invented the shock absorbers.
Returning to the John Hancock tower in Boston: This building did not have the full benefit
of a wind tunnel analysis. Alan G Davenport warned that in gales, the tower could collapse
despite the presence of a tuned mass damper. The vulnerable side of the building was
then reinforced with extra diagonal steel bracing.
Because of the sway noted in skyscrapers it would be difficult to imagine that the Taipei
101 and many other buildings could have been realised without their tuned mass
dampers. Not just because of wind but also considering the Earthquake exposures.
Earthquakes represent a special challenge to the engineers but looking at the experiences
and the history, especially coming from Japan, the results are satisfactory and positive
with regard to the protection of life even if the structure usually does suffer during an
earthquake.
It is however important for a construction underwriter to look at the problems emerging
from these loads (earthquake or wind) during the various construction stages. The wind
analysis is very often conducted with a view to understanding how the building will behave
when it is completed. However for example the cladding of the building may require
further tests to make sure that during the construction stages, the wind load distribution
will not generate unexpected problems.
Various types of skeleton structures are shown in
Figure 3 below:
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IMIA Paper – Modern Skyscrapers –2012
Superframe
Steel frame Vertical
Truss
Tube in tube
Bundled tube
Exterior braced
Frame tube
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Façade, Design Material and Anchoring
The earliest towers were constructed of bricks and mortar, stone and later concrete,
incorporating wood, steel, aluminium, or UPVC framed windows. As building projects
became more sophisticated architecturally, and taller, these earlier methods were no
longer practicable and thus were replaced by “curtain walls”. The cladding of High Rise
buildings are now made of glass, aluminium, or stone. They are erected in place attached
to brackets which are in turn attached to the building’s concrete or steel structures.
Some decades ago the cost of the cladding or building’s façade was less than 10% of the
total construction cost. That percentage has increased to range between 15% and 20%.
Even though the value or cost of the non-load bearing cladding / façade has increased
substantially, the weight of these elements has reduced due to advances in the type and
nature of the materials used.
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IMIA Paper – Modern Skyscrapers –2012
System
The façade / cladding systems comprise the external building envelope or the outer finish.
These have evolved over time to reflect the ambitions of the developers and the creative
and innovative talents of the modern architects. It would seem this is limited only by
budget constraints or construction methodology
Key factors which will affect the characteristics of the cladding / façade systems include;
climatic conditions, support and anchorage systems, owner’s “taste”, maintenance
services, ventilation or air-circulation system.
The dimensions of the individual external wall elements, forming part of the external
building envelope, are designed to fit between two respective structural floors, the main
objectives being:



Water-tightness, Aesthetics, Wind, Privacy
Thermal protection (including control of sunlight entry),
Reduction in noise-level, and Strength / durability.
There are four different groups and their sub-groups of Façade systems / Cladding
systems existing. They are (though not an exhaustive list):




Traditional
- Brick façade (e.g. Empire State building, Chrysler building, etc.)
- Marble panel system
Ventilated Façade
- Aluminium, stone, ceramics, fibre reinforced concrete
(Non-load bearing) Curtain wall
Glass
Material Weights
Flat glass used for window panels – the weight depends on the glass thickness:
 ¼ of an inch thick glass weighs about 3lbs/ft²
 ½ of an inch thick glass weighs about 6.4lbs/ft²
Adding coatings to the glass in order to protect it and tint, would also increase the weight
of the glass panel.
Building Material




Aluminium – has become the material-of-choice for the outer frames.
Window Panes – made of high-grade glass filled with noble gases and a surface
coating in order to reflect infrared light.
Laminated Glass
“Sandwich” Panels – one of the primary materials used in façade systems of a
building are so called “sandwich” panels or also known as “composite” panels.
- Sandwich or Composite panels are thermal insulating material. These panels
consist of two thin metal facings/sheets (i.e. outer “skin”), usually steel or
aluminium, bonded to an inner core of thermal insulating material of varying
thickness. This system includes joints and supports. They are factory-engineered
or factory-assembled systems, or can be assembled on-situ. There are two groups
of such panels, combustible and non-combustible.
- The combustible panels include:
Expanded Polystyrene (EPS), Extruded Polystyrene (XPS), Polyurethane (PUR),
Polyisocyanurate (PIR), Phenolic Foam (PF)
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IMIA Paper – Modern Skyscrapers –2012
The non-combustible panels include: Mineral Wool, Rock Fibre (MWRF), Glass fibre
(MWGF), Foamed Glass (Cellular Glass)
There is great interest in the combustible-type panels because they are the most
widely used in buildings like apartment/residential, hotels, office/commercial,
hospitals.
The combustible panels are widely used / installed in countries situated in the Middle
East and the Arabian Gulf peninsula due to the harsh climatic conditions,
characterized by high temperature all year-long especially between June and
September. The most widely used panels are the polystyrene and the polyurethane
panels for many reasons, to name a few (a) low installation cost, (b) easy in handling
and installation, and (c) strength/durability. However, it has shown over the past few
decades, through loss-experience, that such panels have contributed to the severity
of damage resulting from fire. The disadvantages of these panels are several, such
as high flashover and rapid proliferation (through cores and voids), generate intense
heat, large quantities of dense smoke, and toxic gases (e.g. CO, HCN, etc.), and too
dangerous to fight and too difficult to extinguish (many firemen lost their lives).
-


Support and Anchorage System
There are different types of anchorage systems, each type is designed in a manner to
ensure (a) stability of the respective Cladding / Façade system, (b) a uniform distribution
or transfer of vertical and lateral loads, and (c) allow for a differential expansion between
the different materials forming the outer finish of the building. These anchorage systems
include “gravity” and “lateral” types of connections.
Problems encountered with the installation of Cladding / Facades System
The unpredictable availability of tower cranes and lifts, weather conditions, delays in
completion of works due to poor coordination of façade installations with other subcontractors’ activities, etc.
Poor Workmanship or defective / faulty material introduced during the construction of the
system followed by the continuous influence of a wide variety of forces and exposures will,
overtime, lead to façade failures.
Determining the cause(s) of the Cladding / Façade system’s
failures requires in-depth knowledge of the system itself and
its support elements, the underlying structural system, the
climate and the nature of forces acting on it. Two relevant
examples of system’s failures were encountered at the John
Hancock tower in Boston and the AMOCO building (now
known as the AON Center) in Chicago.
Falling Glass Panes in the John Hancock tower in Boston –
due to faulty glass windows, glass panes detached from the
tower and crashed on the sidewalk few hundred feet down
below. It was later confirmed by an independent laboratory
that “…the failure of the glass was due to oscillations and
repeated thermal stresses caused by the expansion and
extraction of the air between the inner and outer glass
panels which formed each window; the bonding between
the inner glass, reflective material, and outer glass was so
stiff that it was transmitting the force to the outer glass
(instead of absorbing it), causing the glass to fail”
(http://en.wikipedia.org/wiki/John_Hancock_Tower).
Figure 4: John Hancock tower in Boston, MA, USA
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AMOCO Building (AON Center) in Chicago – the original white Italian marble (known as
Carrara) installed was later found to be not suitable for Chicago’s extreme weather
conditions. So, almost 15 years later, the tower was re-cladded. The re-cladding almost
doubled the weight of the façade. Consequently, the anchorage system was upgraded.
The cost of entire job cost USD 80 million, more than half of the tower’s original cost
(http://failures.wikispaces.com/Standard+Oil+-+AMOCO+Building+Marble+Facade+Failure).
3.4 Fit-Out and Finishing Works
Shell and Core
Shell-and-core includes the completed landlord areas comprising main entrance as well
as the reception, lift and stair cores, lobbies and toilets. The office floor areas are left as a
shell ready for additional fit-out.
Category A Fit-Out
Category A is typically what the developer provides as part of the rentable office space
and usually comprises the following:



Raised floors, Floor coverings, Suspended ceilings
Extension of the mechanical and electrical services above the ceiling from the riser
across the rentable space
Finishes to the internal face of the external and core walls Window blinds
Category B Fit-Out
Category B completes the fit-out to the occupier’s / users specific requirements. It can
typically comprise the following:



installation of offices, enhanced finishes
conference/meeting room facilities, reception area, enhanced services / specialist
lighting
IT and AV installations, kitchen area, furniture
Turnkey Fit-Out
This is the least common type. The property is fitted out to a standard ready for
occupation – it can cover everything including the furniture. Developers may undertake a
turnkey fit-out in order to sublet to occupiers who do not want the time and cost of their
own fit-out or as an incentive to potential occupiers.
Insurance
At this stage in any project the risk of fire and water damage is enhanced. Fire and the
resultant smoke and heat damage and the water used to extinguish the fire all cause
considerable damage. The risk of a fire occurring in the first place is enhanced with the
introduction of many and various potentially combustible materials, packaging and trades.
Trades at this point may include painter/decorators, plumbers and electricians.
Consequently there is a potentially dangerous combination of paints, solvents and hot
work together with the aforementioned combustible materials, all of which must be
carefully managed. It is also often the case that it is necessary to disable fire detection
and sprinkler systems whilst certain aspects of fit out work are being undertaken. Training
of personnel to deal with these circumstances is critical.
Another factor to consider is whether the developer or the tenant will undertake the fit out.
If the developer is doing this, their people and contractors will be familiar with the building
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and its layout. The introduction of a different team employed by the tenant brings with it
interface issues which often lead to claims. Additionally, this introduces a new dimension
from the coverage perspective in relation to existing structures and how they are treated
for insurance purposes within contract and policy documents as well as legal implications
as to who is liable and which, if any policy, will respond.
In the UK, the Joint Code of Practice for Prevention of Fire on Construction Sites has
been developed by collaboration between the construction industry, the loss prevention
council, the fire authorities and the Association of British Insurers. This has gone a long
way towards improving risk management against the risk of fire. The code is now on its
7th edition and has also been adapted in other territories. Where this does not apply
Munich Re endorsement 112, Fire Fighting Facilities is often applied.
Another factor which has exacerbated fire claims or at least the cost of such claims is the
disproportionate values that may exist on a newly fitted out bank or commodities trading
floor. Extensive high cost IT equipment and fibre optic cabling add to the cost, but the
cabling itself can also acts a conduit contributing to the spread of the fire.
Water damage is also an increasing problem as highlighted in the claims section of this
paper.
There have been some recent examples of buildings being occupied whilst physical
construction of upper shell and core is still being undertaken, this has many additional
exposure implications, not least of which is life safety.
3.5 Mechanical and Electrical Equipment in Building
With the growing sophistication of buildings, advancements in the functionalities and
capacities of the different mechanical equipment required in order to render the High Rise
buildings habitable and safe have accompanied man’s vision of future towers.
Elevators and Tuned Mass Dampers are two of examples of mechanical equipment
designed and installed to:


transport hundreds of people across floors in the shortest possible time
support the buildings stability against winds and ground movements
Mechanical floors are incorporated in the design of buildings where such equipment is
installed to service the upper floors as well as act as a fire-break between the lower and
the upper floors. Fire fighting water pumps and water reservoirs are usually installed on
these floors.
The value of such equipment and its installation is estimated to be 15% to 20% of the total
contract value. The installation of electrical and mechanical equipment usually follows
completion of the civil works. Such works include the installation of machinery and
equipment and their ancillary works such as the drainage piping, potable and non-potable
water pipes and ducting etc.
This section of the works typically involves the construction and installation of the
following equipment / machinery:
Transportation Systems
Elevators

The invention of the elevator was a precondition to the development of skyscrapers
since it is the only logical means capable of transporting large numbers of people
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throughout the building. Elevator shafts are usually, but not exceptionally part of the
skyscraper’s central core.
Escalators
 These would be used to transfer people at lower levels between lobbies and upper
lobbies/mezzanines or between the floors of a transport hub or mall which may form
the lower floors or basements of a skyscraper.
 There are number of factors which affect the design of elevators and escalators.
These factors include; location, traffic patterns, physical requirements, safety, and
aesthetic preferences.
Location – is important because elevators and escalators should be situated where they
can be easily seen by the general public. In addition, the up and down escalator traffic
should be physically separated, and should not lead into confined spaces.
Traffic Patterns (taking into account number and nature of occupants and number of
floors) – simply relate to the movement of people from one floor to another or guiding
visitors towards a main exit or an exhibit. Furthermore, the carrying capacity of the
escalator must be designed taking into account the anticipated peak traffic demand. As an
example, elevators accessing residential floors will have different needs to those servicing
office or hotel areas.
Physical Requirements – include the vertical and horizontal distance to be spanned. Thus
these will determine the pitch of the escalator and its actual length and in the case of the
elevator may determine speed and indeed whether the elevator can practically service all
floors from the bottom to the top. Some buildings have elevators which service specific
predetermined floors, in some cases it may be necessary to change elevators at an upper
floor to reach higher floors. The ability of the structure to support the heavy components
may occasionally present a design challenge.
Safety - Speed, braking, dissipation of pressure, failure of building management systems
and degree of service if any during an emergency situation need to be taken into account.
Aesthetic Preference - important as these structures should blend in with the overall
finishing and decorative works.
Heating, Ventilation, and Air-Conditioning (HVAC):
 Heaters or Boilers for humidity control
 Blowers and Fans ventilation
 Air-Conditioning for temperature control and constant air supply
 Pumps, Ductworks
Safety Equipment
 Fire Alarms and Smoke Detection Devices – conforming to NFPA 72
 Fire Fighting and Suppression Systems
- Sprinkler Systems – conforming to NFPA 13
- Manual Fire Extinguishers – e.g. Dry chemical, CO2
- Gas flooding systems
 Tuned Mass Damper
- A device in the form of either a large concrete block or a steel body installed in
skyscrapers in order to reduce the amplitude of mechanical vibrations for
instance caused by earthquakes or winds. These help mitigate or prevent
damage or structural failures in buildings.
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The Damper moves in the opposite direction to the “resonance frequency”
oscillations of the building structure by means of a fluid, pendulum, springs.
- In the mid-seventies, the occupants of the upper floor of the John Hancock tower
in Boston suffered from motion-sickness when the tower swayed in the wind. To
stabilize the tower’s movement, the contractor installed two 300-ton weights
Tuned Mass-Dampers on the 58th floor of the building. Each is made up of a steel
box filled with lead and attached to the steel frame of the tower by means of
springs and shock absorbers and rests on a steel plate. The steel plate is
covered with lubricant in order to permit the Tuned Mass-Damper to slide freely.
When the tower sways due to wind, the weights remain still allowing the floor to
slide underneath them, the springs and shock absorbers take hold, tugging the
tower back into position (http://en.wikipedia.org/wiki/John_Hancock_Tower).
-
Electrical and Water Supply
 Emergency Power Supply – shall conform to NFPA 110
- Standby Diesel Engine-Generators
 Electric Power Supply and Components – shall conform with NFPA 70
- Power Transformers
- High- and Low-Voltage Switchgears
- Metering Equipment
 Water Pumps
- Sprinkler System – shall conform with NFPA 20
- Potable and Non-Potable water supply
- Sewage Ejectors, also known as Sewage Pumps, or Solid Waste Pumps.
 Chiller Plants
- Chillers produce chilled water for the building for various usages.
- Chillers could be air-cooled, water-cooled or evaporative-cooled.
Mechanical Floor

In addition to the structural support and elevator
management, the Mechanical Floors are used to
house the HVAC systems, Water Tanks, Water
Pumps, Water Tanks, Chiller Plants, etc.

As a rule of thumb, skyscrapers require a
Mechanical Floor every 10 floors. However, this
number may vary.

Mechanical Floors are counted in the building’s
floor-numbering (according to some Building
Codes).
 They are accessed by Service Elevators.
 Delivering water to the upper floors for normal and
emergency use presents an important constraint to
the designers of skyscrapers since the ground
based pumps can only usually deliver water up to a
dozen floors or so. Water is necessary for the
people occupying the building, for air conditioning,
for equipment cooling, and for fire-fighting, to name
a few. Therefore, the Water Pumps on each
Mechanical Floor act as a relay to the next group up.
The truss sections (made of triangular struts) are the
mechanical floors.
Figure 5: Construction showing mechanical floor
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4.
Risk Management
What is Risk Management?
In this context, Risk Management is the continuous process of identification, evaluation,
monitoring and control of risk and exposures both prior to and during construction in order
to prevent the happening of or to mitigate the impact of a physical loss to property and
bodily injury to people, on and adjacent to the construction site.
The Project Management usually delegates the task and responsibility of Risk
Management to a group or a team of individuals whose role is to ensure that risk is
managed out to the extent possible and/or evaluate the methods of transferring the risk
and the potential cost.
4.1 Passive Risk Management measures
The Impact on Risk Management at the Design Stage
In modern construction projects developers and contractors commence the process of
managing out risk at the earliest stage. Designers are required to comply with a variety of
building codes and standards. Such standards will also vary according to geographical
location, for example locations particularly exposed to wind and earthquake.
Designers will be addressing a huge number of issues in this respect which require risk
management input including:
 Height, Shape, Weight, Foundations, Façade, Sustainability
 Environmental impact
 Construction Costs, Life safety, Usage, Fire and explosion, Water systems
 Weather and climate, Building management systems
 Geographical location, Materials
Increasingly, modern skyscrapers are subjected to wind tunnel tests to establish the
impact of wind on the structure and the surrounding area. Shape, height and facade
designs are influenced by wind tunnel tests and adapted to mitigate the effect of wind and
rain. Even without the influence of major storms, tall buildings are subject to a degree of
sway. This must be curbed in order to avoid excessive sway, which in turn will put long
term stresses on the structural fabric of the building and also cause problems for the
occupiers.
In locations exposed to earthquake, buildings will need to be fitted with dampeners and
shock absorbers to minimise the impact of quakes and aftershocks.
The common denominator for safety in buildings, regardless of geographical location and
natural catastrophe exposures, is fire, both in terms of protection of the structure and
protection of the occupiers or users. The ever increasing desire to build taller requires
lighter components and larger open floor plates – This may lead to weaker buildings with
large open areas thus allowing fire to travel faster. The main causes of fire are:



Faulty electrical, heating & ventilation systems
Cooking area malfunction
Ignitable materials.
In the wake of several major terrorist incidents restriction of vehicular access/proximity to
the building and blast protection are also important.
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The following are some of the important design considerations that architects and
engineers will focus on:


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

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





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Non shattering intumescent paint
Separate access and egress routes
Redundancy in fire suppression systems
Fire resistant boarding and concrete cladding to structural steel members instead of
intumescent paints and foams e.g. more robust
Off-site building monitoring/Situational awareness
Backup water supplies
Fortified elevators
Higher fire resistance standards for structural members
Fire detection, warning and fighting facilities
Access and facilities for the emergency services
Safe zones
Choice of materials in relation to fire resistance
Education of residents & tenants of tall buildings
Many of these and more were subject of the National Institute of Standards and
Technology (NIST) recommendations which were introduce following the tragic events of
9/11 (see below):
18 out of 30 recommendations have not been fully
applied,
including
one
demanding that buildings be
designed against progressive
collapse.
ASCE asked to revise
minimum
design
load
standards to tackle progressive collapse – This has
not been done.
Relevant UK & Euro-codes
are being reviewed but this
has not completed yet.
Experts believe that the
proposals would only have
made a difference to WTC 7
which collapsed as a result of
fire rather than a combination
of impact and fire.
More
consideration
is
required as to how structural
connections are designed
and will perform.
Figure 6: Illustration of recommended technical features
It is probable that ‘resiliency’ design will only be applied in special circumstances.
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IMIA Paper – Modern Skyscrapers –2012
NIST Recommendations
 Prevent progressive collapse through consensus standards/methodology – Code
change provides greater structural integrity only
 Nationally accepted performance standards for Wind Tunnel testing and estimation
of wind loads – Software available but standard not changed
 Criterion to be developed to enhance performance of tall buildings by limiting how
much they sway under lateral load design conditions – No action taken
 Improve construction classification and fire rating requirements – Fire resistance
rating increased by one hour
 Establish a capability for studying and testing components, assemblies, and systems
under realistic fire and load conditions – No action taken
 Develop criteria, test methods and standards for in service performance of sprayed
fire-resistive materials used to protect structural components – Bond strength for
fireproofing increased seven fold
 Adopt and use the of the ‘structural frame’ approach to fire resistance ratings –
Explicit adoption of structural frame approach
 Enhance fire resistance of structures by requiring a performance objective that
uncontrolled building fires result in burnout without partial or global (total) collapse –
Best practice guidelines but no code changes
 Performance based standards rather than prescriptive design methods and tools
and methods to evaluate fire performance of whole system – No action taken
 Development and evaluation of new fire resistive coating materials – Standard test
for new materials introduced
 Performance and suitability of high performance materials be evaluated under
conditions expected in building fires – No action taken
 Enhance the performance and redundancy of active fire protection systems in
buildings to accommodate the greater risks associated with building height and
population – Code change to require two suppliers for sprinklers
 Fire alarm and communication systems be developed to provide continuous, reliable
and accurate information – No action taken
 Enhance the quantity and types of information provided at fire/emergency command
stations in buildings – Building information card introduced
 Provide facilities to communicate real time information to first responders off site –
No action taken
 Public Agencies and Non Profit Organisations should develop public education
programmes – Guidance documents for disabled persons only
 Fully include consideration for evacuation of occupants into building designs,
including thought on counter flows caused by first responders – Code changes
demanding additional exit stairway, wider stairways, use of lifts for evacuation
 Egress systems be to designed to maximise remoteness of egress components
without negatively impacting the average travel distance – Code changes focussed
on min distances between exit stairways and luminous markings
 Building Owners, Managers and Emergency responders develop joint plans –
Standard updated formalising information criterion
 Evaluate all current and next generation evacuation technologies – Standard for
high-rise external evacuation devices
 Installation of fire protected and structurally hardened elevators in tall buildings – Min
of one fire service access lift
 Installation, inspection and testing of communication systems – Approved radio
coverage for emergency services
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IMIA Paper – Modern Skyscrapers –2012








Improvements and detailed procedures for gathering, processing and delivering
critical information to enhance situational awareness of emergency responders – No
action taken
Procedures to guarantee uninterrupted operation of C2 systems – Code change
increasing size of command centre
Encourage Non-governmental and quasi-governmental to use building and fire
safety codes – No action taken
Aggressive enforcement of building code criteria in relation to egress and sprinkler
requirements in existing buildings – Code changed with regard to luminous markings
Building owners to retain documentation over the whole life of a building - No action
taken
Clarify the role of the ‘Design Professional in Charge’ - No action taken
Continued education for design professionals - No action taken
Develop and deliver short courses for computational fire dynamics, thermo-structural
analysis - No action taken.
Changes in Legislation & Regulation
In the U.K. changes to Building Regulations from 2004 stipulate that any designers of
large and more complex Class 3 buildings must undertake a “systematic risk assessment”
that not only takes account of all normal events that should be expected during the lifetime
of the building, but also abnormal events. The same approach has been adopted in EuroCodes.
Regulatory Reform (Fire Safety) Order 2005 – Makes the client, such as the Chief
Executive of the bank occupying the building, principally responsible for response to a fire.
4.2 Active Risk Management Measures
The Impact on Risk Management during the Construction Stage
Once the architects and consultants have, as far as possible, mitigated risk during the
design phase and engineers have taken it a step further by adapting the design for
construction, it is the turn of the contractors and their engineers and consultants to apply
risk management during the construction phase.
It is usual to establish a risk register at an early stage in the development process. This
becomes a live document which is regularly updated by parties allocated to each area.
Such parties should be accountable and have ownership for any risk identified, evaluated
and registered, they should then become responsible for ensuring that the particular risk is
mitigated, eradicated or transferred. Ideally, management of the risk register should be a
shared responsibility, this will ensure for example that the contractor or any sub-contractor
does not increase risk, inadvertently or otherwise through value engineering or change in
method. Ultimately, the goal of all parties is to complete the building without any loss or
damage to property, loss of life or injury to personnel and to hand over a project that
meets the developer’s or client’s specification and is fit for purpose for the end user.
During construction of a skyscraper the most common exposures from the perspective of
engineering insurers are many and varied:


Excavation & Foundation – Collapse, inundation, storm, failure of foundation (due to
faulty workmanship or design for example) and earthquake.
Material storage – Fire, explosion, theft, accidental damage (during lifting and
handling) or malicious damage, inundation, storm and earthquake
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IMIA Paper – Modern Skyscrapers –2012



Plant and equipment – Collapse (e.g. scaffolding or crane), fire, explosion, theft,
accidental or malicious damage, inundation, storm and earthquake.
Superstructure (Shell & Core) – Collapse, fire, explosion, impact, accidental (during
lifting and handling) or malicious damage, water damage (due to leaking pipes),
failure of systems (e.g. methods of connecting/installing structural steel sections),
storm and earthquake
Fitting Out (all aspects including Electrical and mechanical) – Fire, explosion,
accidental or malicious damage, water damage, failure of equipment (particularly
electrical and mechanical equipment)
Consequently all of the above need to be addressed and supervised by the on-site
personnel.
Risk Alleviation Measures
















Monitoring of settlement; with action as appropriate, inclinometers, additional
propping/support etc.
Flood protection scheme; dewatering system with standby pumps, elevated
perimeter to prevent ingress of flood waters, piezo-meters to monitor groundwater
Careful selection and control of storage areas; suitable means of fire prevention and
fire fighting, well spaced and compartmentalized storage areas, above level of
expected flood, protected/sheltered from the elements (storm, sunlight, heat, cold,
sand, salt water environment etc)
Quality control of concrete batching and application; robust testing ad supervision
regime
Traffic control; controlled movement and separation of vehicles
Maintenance and inspection of vehicles and equipment
Site security; encompassing controlled entry and exit, fencing/hoarding, CCTV
surveillance, 24/7 security guards and site illumination
Quality control of materials and equipment; robust inspection and testing regime
Supervision and inspection of workmanship
Storm preparedness; alarms/procedure, evacuation plan
Adherence to lifting and handling procedures
Adherence to guidelines in relation to use of heat and naked flame; “permit to work”
system adopted and rigorously enforced and complied with ( are cleared of loose
and combustible materials, “spotter” working with welder, portable extinguisher on
hand, use of non combustible mat, fire checks carried out at regular half hour
intervals afterwards)
Adherence to health and safety procedures; Safety induction, use of personal
protective equipment (hard hats, protective glasses, boots, gloves etc) and high
visibility clothing, floors voids clearly signed, fenced and covered (utilisation of
temporary plinths). Shafts and façade openings are particularly hazardous.
Additionally, falling from heights is a major cause of injury, as such it should be
ensured that workers use safety harnesses at all times when working at height.
General housekeeping; storage of materials and equipment within the building
should be minimized and waste materials such as packaging removed at regular
intervals (at least daily from the building and weekly from the site).
Signage; clear and well positioned, standardized (symbols rather than or in addition
to words) and in multiple languages if necessary.
Water Damage Avoidance Plan; Quality assurance and control, supervision, training,
installation of drainage and bunding, clearly defined testing process, audible alarms,
Page 30
IMIA Paper – Modern Skyscrapers –2012
leak detection, security patrols, emergency/mitigation plan in the event of an incident
etc. (see CIREG water damage guidance note)
Fire Fighting Measures
The project schedule should ensure the early installation and operation of:
 Automatic fire detection systems
 Automatic smoke detection systems
 Hose Reels
 Permanent fire escape stairs, including fire-resistant doors, railings and permanent
walls
 Water hydrants, must be clear of obstructions and suitably marked
 Adequate water supply for fire fighting purposes
 Portable and wheeled fire extinguishers; the portable fire extinguishers must be wallmounted and suitably marked;
 Lightning conductors
 Standby power generators
 Means of communication with the Public Fire Brigade or the Civil Defense
In addition to the above mentioned points, it is of paramount importance to involve the
human element in this aspect. There should be on site a Fire Fighting and Safety
Coordinator heading a team of sufficient number of trained and experienced personnel
whose main function is to ensure, on scheduled basis, that all of the aforementioned
points are in place, operative, and suitably maintained throughout the construction phase
and until handover.
Fire Brigade and Civil Defence – Does the local Fire Brigade or Civil Defence have the
proper equipment to handle fires on the top floors of the skyscraper? - How high does
their fire truck ladder reach? - Which floor? - What is the response time of the Fire Brigade
or the Civil Defence? - How are they notified or alerted of any fire incident on site? - Were
or are they involved in any regular training offered on site to the on-site Safety and Fire
Fighting Teams?
Portable Fire Extinguishers – The portable extinguishers must be wall-mounted or placed
on flat stable object such as a table. It must be at least 500mm off the ground and are
accessible, i.e. without any obstacles or objects which might be in the way of the person
reaching out for one in an emergency case. Furthermore, routine checks and
maintenance must be maintained in order to ensure its preparedness to operate during
any emergency. The checks and their dates are usually noted on the label stuck to the
extinguisher.
Automatic Sprinkler System – It is highly recommended that the automatic sprinkler
system is commissioned, tested, and made operational prior to the commencement of the
finishing and decoration works. The term operational shall mean that the system’s pumps,
pressure gauges, valves, etc. have been commissioned and tested and are filled with
water. The two main reasons are:



Testing of the piping system involves filling it with (clean or potable) water and
keeping it under pressure for at least 24 hours in order to identify any leaky joints or
valves. If this testing is carried out during or shortly before or after completing the
“finishing” phase, then if a leak happens, then damage to the property including the
furniture and decorative materials would be experienced.
If a fire breaks out inside the building, then the system would be ready to respond
and to mitigate the growth and spread of the fire.
What is usually discovered following the investigation of a fire incident, is that:
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IMIA Paper – Modern Skyscrapers –2012



The system was not filled with water (at the time of the incident). The insured
contractor may interpret the term operational as referring only to successful
commissioning and testing of the system. Having to fill it with water is a different
story.
Some contractors refuse to fill the system with water and to pressurize it fearing that
if a leak were to happen (usually overnight) they would be faced with a water
damage loss prior to handover. However, these same contractors tend to overlook,
intentionally or otherwise, the fact that water in the automatic sprinkler system would
help mitigate the growth and spread of the fire. One should really think and consider
which is more critical in terms of the severity of the loss.
Water Supply for Fire-Fighting – Lack of sufficient water supply on the construction
site for fire fighting purposes is often observed following a risk inspection. Fire
fighting water tanks with sufficient capacities should be maintained and be kept filled
with water. The water on site available for construction purposes should not be
accounted with that for fire fighting purposes. Following the completion of the
superstructure of the building, water tanks are installed on the roof, the technical /
mechanical floor(s), and the street level ground.
Figure 7:
Storage area in the basement of a building
under construction clearly demonstrating a lack
of Risk Management! The fire hazard is
increased, but water damage would also be
inevitable should the basement be flooded.
Figure 9: Miami, FL, US: Protection of the site
the / access control
Figure 8:
Temporary Offsite storage showing properly
stored construction material. All construction
materials are lifted off the ground and an
adequate aisle space is maintained.
Figure 10: Moscow, Russia: Protection of
site / access control
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The photos below demonstrate that waste inside and outside the buildings are kept for
days and even weeks before they are disposed of.
Figure 12: This is “formwork” waste inside the
building, and is adjacent to the fire escape
staircase. If this waste catches fire, it will
restrain workers from escaping and will
restrict or prevent access to the top floors.
(Source: Joseph Haddad)
Figure 11: Finishing and decorative material
waste (Source: Joseph Haddad)
Figure 13: A utility shaft left uncovered;
scaffolding as well as plumbing and firefighting
system pipes lay in the background hence
presenting an unsafe working environment for
workers and an obstacle to access. (Source:
Joseph Haddad)
Figure 14: The “No Smoking”
sign is inadequate because it
is missing the symbol (top
right). Also, in the presence of
various nationalities working
on the construction site, the
signs need to take than
important aspect into account,
hence,
printed in
other
languages. It has been the case that during risk
inspections that cigarette buds were found not far
from where the “No Smoking” signs are posted.
(Source: Joseph Haddad)
Figure 15: “Poor” signage – this message will later
disappear when the finishing and painting works
commence. Alternative signs need to be prepared.
(Source: Joseph Haddad)
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IMIA Paper – Modern Skyscrapers –2012
Figures 16:
Utility shafts
Figure 17: Wall-mounted Dry Chemical powder fire
extinguishers, however, must be clear of
obstructions. (Source: Joseph Haddad)
Figure 18: Dry Chemical Powder Fire
Extinguishers left on the ground without
suitable maintenance. They must be wallmounted,
protected
from
impact,
maintained, and visible to personnel.
(Source: Joseph Haddad)
Figure 19: These 2 x 72m3 capacity GRP
water tanks were erected on the
technical / mechanical floor of a tower
building. (Source: Joseph Haddad)
Figure 20: Hose Reels – A minimum of two pieces
per floor are installed and they must be operative
as the construction of the skyscraper progresses.
(Please refer to photos under “Pictures” Section
below.) (Source: Joseph Haddad)
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IMIA Paper – Modern Skyscrapers –2012
5.
Insurance Cover
Projects for the construction of skyscrapers are insured under conventional Construction
‘All Risks’ policies on a project specific basis for the full duration of the project, including in
most cases the maintenance or defects liability period (non renewable/non cancellable).
The nature and extent of cover provided can vary from standard Munich Re or Swiss Re
forms to bespoke broker/client forms.
Cover is arranged in accordance with contract conditions which usually require that the
policy is issued in the joint names of the contractor and the owner/principle. The insured
parties are often extended to include inter alia contractors and sub contractors of any
tier/suppliers, consultants and manufacturers for their onsite physical activities only and
financiers/lenders. This reflects the multi party insurable interest in the property insured
In most cases all aspects of the project are insured under one policy, this can also be
arranged to include tenants/occupiers fit out, however, in some cases separate policies
will be arranged for different parts of the project, i.e. foundations, shell and core and fit
out. Coverage may range from simple material damage only, to multiple sections
including cover for works, existing property, third party liability and delay in start up. A brief
description of the cover under each section is provided below.
5.1 CAR – Property and Material Damage Cover
Damage to the permanent and temporary works (and materials intended for use in the
project) in progress caused by damage (generally defined as physical loss or damage).
Cover can be made available for the following if required:






Common user plant and equipment
Contractors plant and equipment (usually covered by the contractors own
arrangements)
Site huts, temporary accommodation an stores
Existing property which is the responsibility of the insured parties by contract or
agreement, cover is often restricted to specified peril and damage arising out of the
works being undertaken, however, dependent upon circumstances this may be
extended to full ‘All risks’ arising from any cause
Inland transit
Offsite fabrication
Usually indemnification can take the form of repair, replacement or reinstatement of the
damage.
5.2 Third Party Liability (TPL) Cover
This section provides indemnity against all sums (including claimants costs and expenses)
which the insured shall become legally liable to pay in respect of or consequent upon
death of or bodily injury to or illness or disease (including mental injury trauma
anguish or shock) contracted by any person (other than employees of the insured
seeking indemnity)
loss of or damage to property (other than property insured under the Material
Damage coverage)
happening or consequent upon a cause occurring during the period of insurance and
arising out of or in connection with the project.
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IMIA Paper – Modern Skyscrapers –2012
Cover is often widened to include:
Interference with traffic or property or any easement, right of air, light, water, support or
way or the enjoyment of use thereof by obstruction, trespass loss of amenities, nuisance
or any like cause.
5.3 Delay in Start-up (DSU) / Advanced Loss of Profit (ALoP) Covers
Financial losses suffered by the Insured in consequence of delay in the commencement of
or interruption or interference with the Business resulting from damage. This cover is also
called Delay in Start-Up (DSU).
Cover is triggered by damage indemnifiable under the Construction “All Risks” section of
the policy and is provided solely for the benefit of the owner/principle and where
financiers/lenders are involved, also for their benefit. Coverage, limits and basis of
indemnity would be tailored to the project needs and the requirements of financiers. Cover
is designed to protect the relevant project parties against a financial consequential loss as
a result of project not being completed in time for the originally intended commencement
of the business.
The sum insured may incorporate a variety of elements dependent upon the ultimate end
use of the building:





Continuing fixed costs
Continuing debt servicing
Reduction/Loss of profit
Reduction/Loss of rent or revenue
Additional cost of working
Cover can be tailored to incorporate delays arising out of damage at the premises of
suppliers and arising out of damage to key items of plant and equipment whether insured
under the original contract insurance policy or otherwise.
The client should select a suitable indemnity period taking into account the time needed to
repair, replace or reinstate the works.
This cover cannot be bought on a stand-alone basis, nor can it be bought for the benefit of
the contractors. It is however possible for contractors to arrange the project insurance
including the Delay In Start Up for the benefit of the appropriate insured parties only.
One thing to note is that whilst monetary deductibles apply to all other sections (with the
possible exception of Third party injury or death which usually has a nil deductible), a time
excess, waiting period or retained liability period expressed in days (normally a minimum
of 30) applies to the aspect of ay delay attributable to a cause indemnifiable under the
material damage section. It can either be “inclusive” or “exclusive” (the indemnity period
is either reduced by the amount or is in excess of it). It is usually also applied not for each
and every loss, rather, in the aggregate; although multiple delays may occur a claim may
only be made if there is a delay of the scheduled commencement date of operation.
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6.
Underwriting Considerations
6.1 Underwriting Information
Each risk is individual, and this is no less true of high-rise building projects. Technical
improvements, new techniques, exciting designs, new materials and combinations of
materials lead to new exposures.
A prudent underwriter should be aware of what is going on in the constructions industry,
not only regarding design, but also on the construction site in terms of new materials and
working methods.
To enable them to make a proper assessment of risk, underwriters should ideally expect
to receive a submission comprising the following:
















Scope of cover required/policy wording
Details of the insured parties and their experience relevant to the work being
undertaken
Design/engineering overview
Scope of works/description of the project incorporating detailed description of the
foundations (nature, depth, number, type and dimension of piles), structure
(dimensions, steel or concrete frame etc.), cladding (glass, steel, composite, stone),
fit-out, electrical mechanical plant and any special or unusual features (innovative
methods or materials, prototypical features, atria etc.)
Site Plans and drawings
Geotechnical conditions
Breakdown of the project value
Construction bar chart including critical path (especially useful for DSU)
Location of risk including overview of natural hazard exposures; storm, flood and
earthquake
Description of surrounding and third party property
Method statements
Details of plant
Details of any existing property to be insured equipment
Details of site huts, accommodation etc.
Overview of approach to health and safety, risk management, quality management
and security
Fire safety plan
If DSU insurance is required:





Overview of project funding
Explanation of the composition and calculation of the sum insured
Mitigating factors
Lead times for materials or critical items
Details of availability of suitable resources.
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IMIA Paper – Modern Skyscrapers –2012
6.2 Special Considerations for Material Damage Cover (CAR)
Foundations
Geological conditions and the height, weight and footprint of the building will determine
the features of the foundations. Unless founded on solid rock, the foundations are likely to
be deep and may be highly engineered including cross bracing and diaphragm walls or
secant piling, especially if the building is being constructed in a city centre environment
adjacent to other buildings and/or is exposed to ground water. In such circumstances
extensive piling can also be expected, it is important to know the nature of the piling,
including dimensions and method as well as the requirement to bear and spread the
buildings load care needs to be taken not to undermine adjacent properties or cause
unnecessary damage due to vibration or cracking due to driven piling. Many modern
buildings are constructed using externally positioned super columns, this will introduce a
further complication.
Superstructure and Cladding
Tall buildings are subject to huge dynamic loads due to their massive weight and height.
Extensive wind tunnel testing should ideally be undertaken to ascertain the effect that
wind may have on the structure and the cladding. Constructing such a building
necessitates extensive handling exposure with a large number of heavy and s (glass
curtain wall panels) sometimes delicate lifts risks being undertaken often in very tight
urban environments, care must be taken not to collide with the elements of the structure
already positioned. The higher the building reaches into the sky the more the challenges
from wind and nature. Pumping and curing concrete in extreme hot or cold environments
becomes more difficult and more complex designs create additional engineering and
building challenges for the project team. During this phase, the main exposures have
been covered, however the biggest albeit remote exposure is collapse.
Fit-Out / Electrical Mechanical Fit-out
At this stage the building starts to become enclosed and the exposure to wind and the
elements reduces considerably. The risk of fire and water damage is enhanced. Fire and
the resultant smoke and heat damage and the water used to extinguish the fire all cause
considerable damage. The risk of a fire occurring in the first place is enhanced with the
introduction of many and various potentially combustible materials, packaging and trades.
Trades at this point may include painter/decorators, plumbers, joiners and electricians.
Consequently there is a potentially dangerous combination of paints, solvents and hot
work together with the aforementioned combustible materials, all of which must be
carefully managed.
Although risers may be in place fire detection and fighting systems are often not able to be
operational at this time as they could be accidentally activated by heat and dust. Fire is
the biggest fear and can spread more easily as there will most probably still be floor and
wall opening and fire doors and separations may not be installed. Although fire is the big
fear and remains very much the Probable Maximum Loss (PML) exposure, such incidents
are thankfully few and far between. Fire claims or at least the cost of such claims can be
exacerbated by the disproportionate values that may exist on a newly fitted out bank or
commodities trading floors. Extensive high cost IT equipment and fibre optic cabling add
to the cost, but the cabling itself can also acts a conduit contributing to the spread of the
fire.
There have been some recent examples of buildings being occupied whist physical
construction of upper shell and core is still being undertaken, this has many additional
exposure implications, not least of which is life safety.
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Water damage is also an increasing problem. The move away from traditional welded
copper piping has reduced the fire exposure; however, this has been replaced by push fit
installations of composite materials. When these pipes are first subjected to water
pressure test this is usually passed. However, when the water system is fully
commissioned the constant loads produce a water hammer effect which can result in
incorrectly fitted sections becoming ruptured with the resultant release of water cascading
over many floors before it can be detected that it is occurring and where the source of the
leak is. This then causes substantial damage to floors already fitted out, particularly to wall
and floor coverings, electrical and IT installations. Most of the damage occurs within the
initial period and it can take up to an hour to identify the source and establish how to stop
the water. Claims settlement can be further complicated when it comes to looking at the
cause of loss, is it faulty workmanship or latent defect.
Another factor to consider is, whether the developer or the tenant will undertake the fit out.
If the developer is doing this, their people and contractors will be familiar with the building
and its layout. The introduction of a different team employed by the tenant brings with it
familiarity and interface issues which often lead to claims. Additionally, this introduces a
new dimension from the coverage perspective in relation to existing structures and how
they are treated for insurance purposes within contract and policy documents as well as
legal implications as to who is liable and which, if any policy will respond. If Latent effects
Insurance is purchased, further complications may arise during the defects liability period
in terms of policy response.
Site Buildings and Accommodation
These could include offices, kitchens, canteens, warehousing for storage and in the case
of relatively remote locations, extensive workers accommodation.
Underwriters need to clarify who owns these buildings, what their value is and to what
extent they are to be insured under the project policy. Constructions values are often
included within the bill of quantities, however, underwriters also need to clearly establish
whether it is also the intention to insure such properties as operational items for the
duration of the project and charge the appropriate additional premium. Such items are
often overlooked as underwriters and risk engineers focus on the more apparent hazards
and exposure, however, these properties can be of poor quality with little in the way of fire
resistant qualities, poor spacing and often fire detection and fire fighting capabilities are
absent. Underwriters should also establish their proximity to the main structure as fire can
easily start within these structures and spread to the building.
On and Offsite Storage
Again these are often overlooked and again may also feature many of the elements of the
above with poor separation/partitioning and housekeeping. Measures should also be
taken to ensure that these stores are located above the highest expected flood levels and
are adequately protected from a security perspective.
Plant
Insurance requirements may vary from project to project. In the event that the project
insurances are "owner controlled", often only the tower cranes and equipment specifically
required for the project are insured under the project policy.
In some cases the foundation/ground works aspect will be procured as a separate
contract and those works and plant may be insured together under a separate
arrangement.
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Often contractors have their own plant policies or have the capability to insure plant under
their annual policies. Whatever the arrangements, underwriters need to be clear who is
responsible for insuring which equipment, what they are insuring under their policy and to
what extent. Policies should be clearly worded to support this and rating should be
based
on appropriate plant values (ideally new replacement values) or hiring charges.
On risks of this type plant related exposures are generally relatively minor. In some
territories theft can be an issue, often organised where the plant is stolen, quickly moved
overseas and then sold. More serious issues relate to hoists and tower cranes. In most
territories there are minimum standards to which the erection and operation of such
equipment must comply, failure to meet such standards may result in failure of the
equipment, resulting in serious damage to the equipment, injury or death to the operator,
users and third parties and damage to both the works and surrounding third party
property. Fortunately such incidents are rare, however they can happen and when they do
they can also have quite an effect on the works programme which in turn may impact
upon any Delay in Start Up coverage, provided this has been extended to cover Delay
arising out of damage to plant.
Natural Perils
If the risk is located in a seismic zone with earthquake and tsunami exposure (the latter
where close to the sea), or particularly exposed to tropical storms and cyclones, then
these risks will need to be considered in addition. Proximity to a river in an area prone to
flooding will also need special consideration for protection of the works. Underwriters need
to be careful when considering extensions of period in the event that there I a seasonal
exposure and the extension may take the risk into for example the next hurricane season,
in such cases pro rata additional premiums are likely to be insufficient.
Special Clauses: Fire joint code of practice. Munich Re Fire fighting facilities clause or
similar, CIREG Water damage guidance note, piling, dewatering, terrorism, SRCC, Time
schedule, Munich Re Windstorm and Earthquake endorsements or similar, and Taken into
use clause.
6.3 Special Considerations for Third Party Liability (TPL)
In the underwriting procedure the following factors should be considered in the process of
premium calculation for the TPL exposure:









Distance to third parties
Fire and / or explosion risk form construction work
Height of construction work
Type of and method for construction machinery (e.g. cranes)
Contractor’s experience and accident record
Possibility of the existence of underground laying material such as pipelines and
cables
Existence of valuable buildings / structures such as remains or historical monuments
Frequency of third parties visits to the site of construction
Possibility of ground collapse
Many of these factors can render the TPL exposure of high-rise buildings substantially
above average compared with other types of risk:

High fire exposure especially at the end of the project
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IMIA Paper – Modern Skyscrapers –2012





Height of the building due to the type of risk
The use of very large cranes
Cramped worksites often in city centres
Inexperienced contractors may not be of any interest to the actors of the construction
(contractors, engineers and architects) as
Projects involving deep excavation / foundations and multiple basements in built-up
areas.
The TPL exposure associated with the construction of buildings depends mainly on the
environment of the building and on the depth of the excavation works to be carried out.
The closer the building is to existing buildings, the greater the risk. Excavation pits have
to be stabilized using such measures as slurry walls, soil anchors etc. to prevent any
ground movement that could endanger nearby structures. In addition the lowering of the
water table can also induce ground settlement around the excavation pit.
Loss prevention in respect to these hazards will consist for insurers in checking all
geotechnical investigations, making sure that they have been carried out in the planning
phase and that recommended measures are correctly implemented.
Special clauses: VRWS (Vibration, removal, weakening of support), Underground cables
and pipes, Cross liability
6.4 Special Considerations for Delay in Start-Up (DSU / ALoP)
The main issues in this respect are access to the site, on site storage and lead times for
materials such as cladding and critical heating, ventilation and air conditioning equipment
or lifts and escalators.
Working days/hours permitted may also be a feature if there is a delay and contractors
have to make up lost time. Particularly in large cities, works are often restricted to normal
working hours so as not to cause noise pollution and general disruption to local residents
and adjacent parties. Such restrictions are often more of an issue during piling and shell
and core works
Special clauses: Customers Extension, Suppliers Extension, Increase Cost of Working.
6.5 Skyscrapers and Decennial / Inherent Defect Insurance (IDI)
Within the panoply of products that the insurance industry can offer for Skyscrapers, it is
worth mentioning Decennial or Inherent Defect Insurance (IDI) as it is more commonly
known in the English speaking markets.
It is certainly important to keep in mind that in most countries, there is a specific liability
regime attached to the act of construction especially when it comes to buildings for office,
commercial or residential purposes. The parties involved in the construction of a building,
contractors, architects or engineers will, from the date of hand-over, have a liability which
generally will last for 10 years in respect of defects in the structural works. In some
countries /States it can be more: 12 perhaps 15 years. This liability is not limited to the
repair of the structural damages but includes also the consequences of the defect.
Whilst this liability regime exists in many countries, only a few have imposed a compulsory
insurance requirement on the owner. The most well-known of course being France where
the compulsory insurance system is perhaps the most comprehensive and certainly the
most complicated.
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IMIA Paper – Modern Skyscrapers –2012
The French liability regime goes beyond the structural defect as it encompasses the
“unfitness for purpose”. For a skyscraper issues such as ground settlements and leaning,
excessive sway, defective elevators, failing curtain walls and falling glass panels, can be
extremely problematic. The French insurance system is designed around what is known
as a double trigger: First a first party insurance aimed at covering the owner and all subsequent owners (commonly known as “Dommage Ouvrage” DO), then liability insurances
to cover separately or in a kind of wrap-up all the participants who participated to the construction of the building. This insurance is called “Responsabilité Civile Décennale” or
RCD. The DO insurer will indemnify the owner for the Decennial loss and then seek
recourse against the various RCD insurers.
Over the years several difficulties emerged from this system; what qualifies as a decennial
loss; the different legal approaches with regard to unfitness for purpose; the recourse
process and the availability of the products for non-French entities. However today the
system is working and underwriters have managed to find a way to offer these products to
their insureds.
In countries where insurance is not compulsory as such, the product sometimes offered is
known as Inherent Defect Insurance or IDI. This is a first party insurance aimed at
covering the owner, after handover, against defects which damage the structure as well
as consequential damage to non structural works, for a period of 10 years. As this product
does not offer any liability coverage and therefore may not be of any interest to the
constructors (contractors, engineers and architects), underwriters often agree, subject to
additional premium, to offer an endorsement waiving any recourse against them. This
creates a certain reassurance for the constructing parties, as they know that the cover is
in place for their client and that their liability is thus limited. This product is very often seen
as an alternative to an Error and Omissions (E&O) cover for professionals of construction
or a complement to their existing E&O annual programs.
All of these insurances, DO, RCD or IDI, are based on a capitalization model i.e. they will
require the payment of a single premium to cover the 10-year period and it is therefore
important when fixing the insurance price, to bear mind the possible effects of inflation.
Usually the insurance has to be negotiated before the works start as the Decennial
underwriters will require a project review by a Technical Inspection Service (or TIS). The
TIS is an independent engineering firm which, on behalf of the underwriters, will control,
by random inspection, the design as well as the works on site. Their reports go directly to
the underwriters and should the TIS conclusion be negative at the time of hand-over, the
underwriters may decide to reduce or even to withdraw the cover. It is for this reason
difficult to negotiate this cover after completion of the building, as any TIS program will be
almost impossible to implement.
Because of the particular complexities in Skyscraper construction and design, it is quite
common for underwriters to require a complete design review done by independent
engineers in addition to the TIS review. Decennial underwriters will in addition seek to
review wind tunnel analysis.
Another difficulty worth emphasizing, not only to the Underwriting community, but also to
developers and their brokers, relates to the foundation. In many instances the foundation
works are separately contracted and already completed before the superstructure works
contracts are finalized. This can prevent the TIS from adequately performing their role
which in turn may prevent the IDI underwriter from insuring the risk.
The capacity offered by the market is often not sufficient to cover the full value of these
Skyscrapers which today is often in excess of the 1bn USD. Furthermore financiers often
require that coverage is extended to include business interruption. Coverage is therefore
offered on a first loss limit basis.
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IMIA Paper – Modern Skyscrapers –2012
Putting together these coverages is complex and in consequence few projects have
managed to overcome the hurdles and secure IDI coverage. Some of those which have
include:
 in France: Coeur Defense, the Tower Granite.
 in Morocco: the minaret of the Hassan II Mosque with its 200 m height
 in UK: the Shard of Glass
Historically the Petronas Tower in Kuala Lumpur, Malaysia is perhaps the first super tall
building to have had the benefit of IDI coverage, although cover has now expired as this
building is more than 10 years old.
The John Hancock tower was a somewhat less successful Skyscraper project, as has
been mentioned elsewhere in this paper. Had such coverage been in place at that time,
one can only begin to imagine the scale of loss that the underwriters would have
sustained.
6.6 MPL Assessment for Skyscrapers
Insurance / reinsurance capacity is a limited resource and requires substantial capital.
Therefore, optimal deployment of capacity is essential.
The realistic and reliable assessment of the loss potential of any one risk is the basis for;
 Determination of a retention in relation to capital requirements
 Determination of reinsurance needs
Engineering Insurers have historically allocated capacity in accordance with Probable
Maximum Loss (PML)
Definition of PML Utilized by IMIA
“Estimate of the maximum loss which could be sustained by the insurers as a result of any
occurrence, considered by the underwriter to be within the realms of probability.
This ignores such coincidences and catastrophes as may be possibilities, but which
remain highly improbable.”
The definition of what is “probable” is in many cases extremely difficult. It is only possible
if all the risk information is available and a careful assessment of the situation is made
based on the information provided and the experience of the underwriter.
Factors to be considered in the PML assessment:
Risk Related Factors

Project layout, value concentrations, complexity, technology, materials, construction
program, testing phases, human factors (e.g. manufacturer‘s / contractor‘s
experience), fire exposure, infrastructure (accessibility, repair facilities, spare parts
availability, etc.)
Environmental Factors:

Location; earthquake exposure, water/flood exposure, storm, geology, topography,
etc.
Cover Specific Factors:

Extent of cover; inclusion of faulty design, guarantee cover, DSU cover, unclear
inclusions/exclusions, limits etc;
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IMIA Paper – Modern Skyscrapers –2012
The process of calculating the PML considers:
 What is at risk?
 What is it worth?
 How much of it is likely to be damaged, and to what extent?
Answering these three questions in turn provides a systematic approach to the calculation
of PML. The calculation needs to be done case by case. Most of the scenarios may lead
to a fire / collapse. With potentially huge consequences, especially shortly before
completion With the consequence of even a 100% loss, perhaps with the exclusion of
foundations, but including removal of debris and other sub limited extension. Normally
active and passive fire protection measures would be in place shortly before finish but
should not be taken in consideration when calculating the PML.
In case of high rise buildings the PML is mainly influenced by fire/explosion and/or Nat
Cat. Some considerations regarding PML Scenario might be:
 Events such as the aircraft attack on The World Trade Centre (WTC) and natural
catastrophes are examples which may not be considered a PML event.
 A typical (worst-case) scenario for a skyscraper or a high-rise building would be a
complete burnout of the building but without the resultant collapse of the structure.
This “accidental” fire event would take place during the “critical phase” of construction
of such projects, i.e. the finishing phase; for example, happening only few days prior
to the issuance of the Provisional Acceptance Certificate (PAC).
In the worst-case scenario, one could consider that the fire would propagate vertically
from floor to floor:
 Along the façade of the building,
 Through the openings between floors,
 Air-conditioning ducts,
 The internal shafts (such as that of the elevator and the utilities), and/or
 The staircase (if the fire-resistant doors have not been installed or were kept open).
The MPL figure could reach up to 70% or 80% of
the total contract value (TCV) plus all relevant sublimits of the additional covers granted in the CAR
policy such as removal of debris, expediting
expenses, and professional fees.
Fire is without doubt the main exposure for high-rise
buildings during construction and operation. Modern
high-rise buildings have little in common with other
buildings. Additionally, modern buildings now
contain a huge amount of telecommunication,
switching, air conditioning links etc. Such
installations
run
throughout
the
building,
notwithstanding fire and smoke breaks these often
exacerbate the spread of fire, smoke and heat, but
also water, during extinguishing activities. In some
cases, for example a bank or commodities trading
floor will house a concentration of high value fiber
optic and other cabling, the consequence of which
is that a relatively small fire contained within that
floor may result in a disproportionally high claim.
Figure 21 - Edificio Windsor Fire, Madrid, Spain. February 13, 2005.
Severe fire during refurbishment activities, temperatures of at least 1260°C
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IMIA Paper – Modern Skyscrapers –2012
7. Claims, Loss Control and Loss Prevention / Mitigation
measures
7.1 Introduction
In this section we look at the claims experience on tall buildings, the types of losses which
are occurring and the causes that lie behind those incidents. We then go on to examine
measures that can be taken to prevent loss, coupled with some guidance on what the
underwriters should be looking out for when managing the risk on these projects.
This report has been based on the claims histories of the tallest buildings in Europe and
the Middle East, which include the losses encountered during construction of the world’s
tallest buildings.
Before going into detail, a few general observations can be drawn from the statistics.
First, there are very few fires – a risk that still has to be taken seriously by construction
management due to the risk of injury to personnel, but one where the risk of a claim under
a conventional CAR policy is of a different kind. The improvement in the fire risk is partly
illustrated by the advent of the Fire Joint Code of Practice, 1997. During the five years
which followed, there were no CAR claims on commercial buildings under construction, of
more than £1m.
In recent years, the insurance market has become increasingly aware of the fact that
water is by far the largest problem in CAR/EAR claims, whether it is water escaping from
pipes, or weather related incidents. Practically all of the incidents on the claims record of
the world’s tallest building under construction were for water damage and this pattern is
replicated in the vast majority of the tall building projects examined as part of this study.
Consequently, this report will concentrate on the water risk.
The report also draws on the conclusions of the Construction Insurance Risk Engineers’
Group (CIREG) who produced a “Guidance Note on the Avoidance of Water Damage on
Construction Sites” in February 2009.
The pattern of water damage, and its relevance to high rise buildings, is also illustrated by
the pattern of losses encountered on one of Europe’s largest construction projects. The
section of the project providing low level facilities was relatively claims free; the section
which incorporated high rise buildings presented the highest frequency of claims – all
water damage – overshadowing the claims experience on the entire project.
In the context of high rise buildings, there are two other major types of risk: wind related
incidents in the exposed upper levels of these structures, and falls from a height,
damaging other sections of the work below. The claims history discussed below deals
with losses stemming from these risks.
Materials
In recent times, construction projects have increasingly used push-fit plastic fittings in
pipework, rather than the conventional copper pipework, with compressed or capillary
joints. A major source of burst water pipe incidents relate to plumbing sub-contractors’
failure to install the push-fit fittings properly. This is compounded by the fact that when a
joint is incorrectly completed, on a plastic pipe, it tends to rupture apart completely,
causing a major and sudden release of water. The older copper capillary joints tended to
leak gradually, as a consequence of an inadequately welded joint.
The main cause of these failures tends to relate to sub-contractors’ failure to push the
poly-press fitting home fully, but occasionally, inadequate use of solvent material is the
cause.
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IMIA Paper – Modern Skyscrapers –2012
When a team of plumbing sub-contractors are adopting inappropriate working methods,
whether by poor training or lack of attention to quality, a building can be riddled with
multiple defective joints (1% of 200,000 joints in a major structure is sufficient to cause
many losses). The difficulty is that the management do not know where the defects are,
and these often only reveal themselves when a major burst of water occurs.
A further problem, associated with plastic pipework, is that occasionally it cracks and
ruptures - a problem rarely encountered on older copper pipework. In this respect, plastic,
whilst easier to handle, carries a greater risk of water damage than conventional
materials.
Workmanship
Associated with the problem of plastic pipework is the issue of defective workmanship.
New plumbing systems require knowledge and experience of their use and installation
technique. It is essential that proper training is given to contractors on any new material
which is being used in the works. Moreover the main contractor needs to ensure that, in
the appointment of skilled sub-contractors, they are complying with manufacturers’
instructions, installation standards and adherence to codes. It is feasible to incorporate
compliance with these codes and to include written procedures in the contractual terms
and then verify compliance in the form of site checks.
It is well known that most incidents on a building site relate to human failure, rather than
externally fortuitous incidents such as the weather. In high rise buildings the temptation
for a contractor to take a short cut in arranging a temporary water supply rather than
descending to ground level, is great. Too frequently, a contractor will attempt to use part
of a water installation which may or may not be completed and ready for use. If that
installation is not completed (with open joints and temporary stop offs), this commonly
leads to incidents of water escape. A temporary water supply such as a hose attached to
a tap left over-night can rupture during non-site working hours – during periods of higher
water pressure, leading to easily avoidable water incidents.
Design
Whilst design of a building will always take into account the risk of fire and the prevention
of it spreading, this risk consideration is rarely given in the case with water. Thus,
incidents of water escape, at high level, can take the path of least resistance, via floor
level, into a riser - causing extensive damage throughout the height of the building as the
water descends into the basement. These types of claim which are often encountered
near completion, when services are operational, and when the building is in its most
fragile state, tend to produce the largest claims encountered by adjusters. Measures to
avoid this include the installation of bunds to prevent escape of water into risers.
Moreover, in a building design, combined service risers should be avoided with the
separation between dry and wet risers, and the protection of sensitive electrical cabling
and equipment.
This applies to the risk of water travelling across the floor slab, where the design should
arrange for cables, and other water sensitive equipment, to be mounted above the slab
rather than laid directly onto the floor slab.
The location of water tanks, and oil tanks at high level, should always be protected by
perimeter bunds with proper drainage systems. They should be functioning before they
are charged with liquid, to enable the short-term containment of leaks, and to permit the
drainage of larger escapes of water in the event of overflow.
High rise buildings have a particular vulnerability to materials falling from a height. In the
present day environment, glass clad is favoured above more conventional materials, but
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IMIA Paper – Modern Skyscrapers –2012
glass is especially susceptible to any type of liquid debris, such as concrete or other
cement based construction material. In looking at this risk, underwriters need to consider
the shape of the building, and its exposure at lower levels, to materials falling from a
height at higher level. These are not normally contained to a single incident but multiple
escapes which can affect all the cladding envelope of the building - leading to very
expensive reinstatement and cleaning costs.
Typical incidents include concrete dripping from skips carried by a tower crane which
traverse across the cladding. More frequently, on high rise buildings, is the effect of wind
which will force any recently laid liquid concrete through open voids onto the building’s
exterior.
Method Statement
Associated with the risks outlined above, is the fact that modern construction techniques
commonly require the fit-out works to commence at the basement of a building, whilst
structural works are still underway at the top of the building. It is frequent for the activity
above to interfere with the works below. Concrete spillage is one common instance, but
the escape of other construction materials such as moulding oil for dismantlement of
formwork can lead to contamination and damage to fragile elements of cladding below.
Currently it is common to install lift cars in the main lift cores whilst the concrete lift cores
themselves cannot be closed off to the weather elements. High rise buildings provide a
particular risk to wind-driven rain entering the temporarily sealed core openings.
Measures need to be taken to protect the sensitive components contained inside.
7.2 Loss Prevention / Mitigation measures
The accident histories of tall building projects illustrates that the easiest way to reduce the
overall cost of claims is by immediate loss mitigation techniques which are designed to
respond promptly when a incident does occur.
Looking at the largest losses of over £10m in the last 20 years, most of them relate to
escape of water – when the escape of water has lasted over a far longer period than
necessary. Had the project management prepared techniques to act quickly upon the
occurrence of an incident, the severity of these loses could have been avoided.
Thus, the National Westminster Bank incident in Princess Street in 1996, which was a
burst water pipe producing a £20m claim was only this severe because a burst fire main
was allowed to run from the time of the incident on Friday at midnight until the site team
returned for work at 8.00 a.m. on Monday.
In the HSBC Bank incident, a 12” fire main at the top of the building ruptured during a
pressure test - leading to water descending all the way to the basement, and a £12m loss.
This could largely have been avoided if the site team had known where to turn off the
water immediately the rupture occurred, rather than 45 minutes later – by which time
water had travelled to stories through a near-complete building, into the basement.
Thus, the first step of project management is to ensure that staff is aware of procedures
for action in the event of a water incident. This includes ensuring that the security
personnel are aware of where to turn off water should a pipe burst occur.
It also means that when pressure tests are being carried out, other personnel are on
standby to act instantly if there is a pipe burst.
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IMIA Paper – Modern Skyscrapers –2012
Project Management contact details should be given to staff and security personnel in the
event of water escape during non-working hours and measures should be taken to ensure
that the Emergency Services also have this information.
Cost constraints these days have meant that many buildings approaching practical
completion are not staffed by security personnel during non-working hours. This has been
at great expense to underwriters when pipe bursts occur overnight. The site team arrive
in the morning to discover extensively water damaged works. On some sites, the
adjusters succeed in implementing recommendations for overnight security. This should
include walking patrols so that water escape – the silent menace – can be detected and
acted upon swiftly.
Coupled with this, are the detection systems which can detect a fall in pressure and the
possible existence of a leak. Such alarms should be audible alarms and naturally should
be capable of being acted up when they do occur. A common theme on major losses is
the failure of designated personnel to act when an alarm does go off.
Check list of Prevention / Mitigation measures
The counter-measures to prevent these types of incidents, which have been touched on in
the sections above, can broadly be divided between ‘Prevention’ measures and
‘Mitigation’ measures:
Prevention
Before works commence, the design team should be considering the following
measures:








Bunds for high level water and oil installations
Division of risers – wet and dry
Avoidance of laying cables directly onto floor slabs
Clear identification of pipework and shut off points plus easy access
Full functionality of drainage points in all water installations
Sensitivity of building and suitability of plastic pipework
Low pressure water alarms
Location of water tanks
Good claims histories have generally stemmed from projects where the employer takes
control of risk management, as opposed to the principal contractor. Even if it is the
principal contractor, a Comprehensive Risk Assessment should be carried out to fully
consider the risk of water damage as well as the fire risk. The principal contractor
should take responsibility for management of the water damage risk, rather than
leaving it to separate trade contractors. The principal contractor’s responsibility should
include setting up a Water Management Plan, setting out responsibilities and
procedures in the event of an incident.
Finally, the plan should consider the sequence of work and the method statements to
ensure, not only the safety of personnel, but avoidance of fire, and equally important,
the water risk.
As defective workmanship is a common cause of burst water pipe incidents, systems
should be developed for the appointment of properly trained plumbers with a certain
level of competency.
Finally, the workmanship itself should be subject to continuous supervision, inspection
and certification. Recording of contractors working on different sections of the building
enables a retrospective check if incidents occur due to a defective method statement
encountered at a later date.
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IMIA Paper – Modern Skyscrapers –2012
Mitigation





The first step in mitigation is a procedure to allocate site responsibilities - for action
in the event of an incident. All personnel should be aware of emergency measures
in the event of a water incident in the same way which a site protects against fire.
Consideration should be given to the use of security guards during non-working
hours and walking patrols.
Alarm systems should be in place, in particularly water pressure detectors, which
give audible warnings to personnel who are capable of reacting on an alarm.
The risk management team should be aware of incidents early on so immediate
measures can be taken to prevent a recurrence.
Temporary water apparatus should be avoided in preference for the use of a
permanent water supply. Temporary supplies should be closed off in non-working
periods.
7.3 Claims and Loss Experiences
Attrition Losses
Due to appropriate design codes and working procedure severe losses are limited.
Attrition losses are common especially damage by rainwater, broken water pipes //
valves and activated sprinklers, fire in storage areas due to bad housekeeping (see
picture)
Figure 22 - Miami FL, US: High-rise
building, Storage area with an increase fire
exposure due to bad housekeeping,
material stored and the limited access
(Source: Gero Stenzel)
Severe Losses
Fire is one of the greatest risks when we
are talking about high-rise buildings, Not
only during construction, but also in
operation. Main issue during construction
due to the activities of a huge number of
workers, especially at the end of the
project (e.g. welding activities, smoking,
no hot work permit), and the lack of
comprehensive
fire
extinguishing
measures (sprinkler, stand pipes, pumps)
during this stage of the project.
Figure 23 - Beijing, China: Mandarin
Oriental Hotel, Feb. 9, 2009
www.democraticunderground.com
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IMIA Paper – Modern Skyscrapers –2012
Collapses
These are a topic. But due to the design opportunities, the experiences learnt and the
experiences of the past it has in the meantime more a theoretical character than it is a
practical exposure scenario. High-rise buildings are also prestige projects with the
consequence that the controlling procedures during design and construction are tough. A
failure of the structure rarely happens in mature countries.
Figure 24 - Atlantic City, US: Collapse of
a Parking Structure, Tropicana Casino
and Resort, October 30, 2003 Source:
http://failures.wikispaces.com
But not only structures are exposed
to collapse. More and more cranes
are collapsing, mainly due to their
age,
lack
of
maintenance,
inappropriate inspections etc.
Figure 25: New York, NY, US: Ground Zero
CPE / crane collapse exposure
Source: Gero Stenzel
Figure 26: Dubai, UAE: Flooding
excavation
Source: http://uneasysilence.com
7.4 Fit-Out: Claims Issues
It is increasingly common to see separate fit-out project policies on skyscrapers which are
separate from the shell and core project policy. The fit-out project policy can be for
$100m or more and it may be affected with Insurers who are different from shell and core
CAR project policy. That fit-out policy is likely to cover both the fit-out works and liability
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IMIA Paper – Modern Skyscrapers –2012
risk and cover will normally be in the names of all contractors involved on the fit-out, in
any tier.
Typical types of loss that can be encountered at the fit-out stage include:


A defective plumbing fitting in the shell and core works ruptures during the fit-out,
causing damage to the fit-out works.
The fit-out contractor can accidently cause damage to the shell and core works (e.g.
dislodging a sprinkler fitting) causing damage to both the fit-out and shell and core
works.
The issue then is how do the respective policies respond? The fit-out insurers should
meet the cost of repairs for damage to the fit-out works but they may then pursue a
recovery against the relevant shell and core contractor. If that M&E (Mechanical and
Electrical) contractor is the same as the M&E contractor working on the fit-out (despite the
fact that there are two separate contract packages) the fit-out insurer may not be able to
pursue a subrogated recovery against a co-insured under his policy (Petrofina v
Magnaload).
In the case of water damage incidents, it is not an uncommon cause to be in dispute –
whether a pipe ruptured due to a defective coupling by the shell and core M&E contractor
or whether it was dislodged by the fit-out contractor. The shell and core insurance cover
may have ceased at practical completion - with the result that damage by an external
cause (such as the action of a fit-out contractor) is not covered, but damage due to a
latent construction defect would be covered under the maintenance extension.
Where the fit-out contractor causes damage to the shell and core, that cost may have to
be considered under the liability section of the fit-out policy.
These issues need to be considered carefully, by Underwriters, if a decision is made to
have separate insurers on the shell and core, and fit-out policies, since practical issues
can arise in the handling of claims under each policy.
A further practical issue which arises, when there are two policies running on the same
building, is in connection with a major incident- for example a fire which destroys sections
of cladding on the core works and also parts of the fit-out works. The fit-out contractor will
want the shell and core contractor, and his insurers, to complete the cladding as quickly
as possible so that their fit-out remedial works can commence. Any DSU covers on both
policies will be further complicated by the fact that the fit-out works can often not
commence until shell and core remedial works are substantially complete.
Some developers overcome these potential difficulties by arranging insurance for the
landlord’s fit-out and tenant’s fit-out works under the same project policy.
The shell and core insurer would need to consider that, if he is not also insuring the fit-out
works, the liability exposure under his policy increases in the event that defects in the
shell and core cause damage to the fit-out areas. Similar considerations would apply to
the fit-out insurer who can take on a substantial liability in respect of losses to the shell
and core areas caused by fit-out.
London/Zürich, August 2012
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IMIA Paper – Modern Skyscrapers –2012
References for Additional Reading
Publications:
Wild, U. and Staub, K. (1993, Revision 5/1998). Fire protection on building sites in
Construction/Erection All Risks insurance. Engineering, Swiss Reinsurance Co.
Munich Reinsurance Company (2000). High-Rise Buildings.
IMIA, WGP 40(2005). EAR/CAR – Third Party Liability – Existing and Surrounding
Property.
IMIA, WGP 28(2003). Risk Management approaches in CAR / EAR projects.
The Insurance Institute of London (2003). Insurance of Revenue for Projects Under
Construction. Cromwell Press Limited, Trowbridge, Wiltshire.
Ascher, Kate (2011). The HEIGHTS: Anatomy of Skyscrapers. New York: The Penguin
Press.
Mapp, Keith. A consistent method of calculation of Probable Maximum Loss for buildings
under construction or undergoing refurbishment.
Codes:
National Fire Protection Association (2009 Ed.) NFPA 5000 – Building Construction &
Safety Code.
National Fire Protection Association (2010 Ed.) NFPA 10 – Standard for Portable Fire
Extinguishers
National Fire Protection Association (2010 Ed.) NFPA 13 – Standard for the Installation of
Sprinkler Systems.
National Fire Protection Association (NFPA 14) – Standard for the Installation of
Standpipes and Hose Systems
National Fire Protection Association (2011 Ed.) NFPA 70 – National Electric Code
National Fire Protection Association (2011 Ed.) NFPA 72 – National Fire Alarm and
Signaling Code
National Fire Protection Association (2010 Ed.) NFPA 110 – Standard for Emergency and
Standby Power Systems
American Society of Mechanical Engineers (2010). ASME A17.1-2010 Safety Code for
Elevators and Escalators.
Construction Confederation, Fire Protection Association (2009, May) Fire Prevention on
Construction Sites – The Joint Code of Practice on the Protection from Fire of
Construction Sites and Buildings Undergoing Renovation (7TH Ed.).
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