IMIA Working Group Paper MODERN SKYSCRAPERS
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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 Page 2 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. Page 3 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