Risk Management

Appraising the Roof

Sprint, feeling confident after its efforts to shore up properties paid off big-time when Hurricane Katrina hit, pares its property insurance.
Scott LeibsOctober 19, 2007

Despite early predictions of an unusually active season, most hurricane
coverage this year (as of press time, anyway) has been devoted to Katrina
retrospectives rather than the chronicling of fresh disasters. If history is any guide, that means that most businesses will slip
into a reflexive complacency regarding their business-continuity and disaster-recovery efforts.

But not Sprint Nextel Corp. The company weathered Katrina so successfully that it actually reduced the amount of property insurance it carried, realizing
that its businesscontinuity
efforts could withstand what Greig Fennell, manager of business
continuity, calls “the worst-ever-case scenario we could imagine.” Reducing its coverage was not bad news for its insurer, however; in fact, it was because of the engineering advice offered by FM Global that Sprint could make such a move. FM Global bundles property coverage with a wide
range of engineering and related consulting help, providing clients with
a list of recommendations
on how to modify their sites to minimize damage.

As a result, Sprint did relatively simple but often overlooked things,
like securing roofs more firmly. That step alone often spells the difference between a building remaining viable after a storm or becoming virtually useless.

Sprint’s efforts went well beyond site improvements, however. The
company established “Sprint City,” a vast tent complex at the Baton Rouge fairgrounds, to serve as a staging area for service restoration. “We did suffer some damage,” says Rick Burnheimer, director of
risk management and environmental health and safety. “Some towers were
so submerged that we couldn’t even spot them from helicopters.” Sprint had to take certain actions that it not
only hadn’t planned for (such as hiring psychologists to counsel repair
people who had witnessed horrific scenes) but that actually ran counter to its stated policies, such as sending
armed guards to accompany repair crews. Sprint says that an experienced
business-continuity team is key to being able to respond quickly to the unexpected. Also essential is the creation and constant review of a list of Top 10 risks, which it shares with FM Global.

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