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Heritage Risks

12 April 2011

Operating out of a heritage or listed property can pose challenges not generally experienced by occupants of built-for-purpose commercial premises. It requires a different approach to risk management and an awareness of the special nature of heritage buildings, as Marcus Booth explains

THERE ARE ABOUT HALF A MILLION listed buildings in the UK and of those around 150,000 are commercial or public buildings of some type. Not all heritage buildings are necessarily listed. It is estimated that there are around 450,000 commercial and public heritage buildings in total.
When considering the risks and challenges of operating out of a listed building there is one key fact that has to be taken into account: in the event of a major event such as flood or fire where major repair or rebuilding work becomes necessary, there is a legal requirement to obtain listed building consent which may involve restoring the property as close to its original state and character as possible.
Research carried out by Ecclesiastical in 2009 indicated that nearly 60 percent of the UK’s listed buildings used for commercial purposes are underinsured by an average of close to £1m, exposing their owners to serious financial risk in the event of a major claim. These statistics were based on building surveys carried out on nearly 500 listed properties.They showed that 59 percent were under-insured for rebuilding purposes by an average of 27.6 percent. Any claims may be reduced by the same percentage as the shortfall and so, organisations operating out of listed properties in these circumstances would find themselves paying nearly 30 percent of repair or rebuilding costs themselves.
To arrive at an accurate insurance valuation, heritage properties require individual valuations. In general, in modern commercial premises, up to 60 percent of the value of the building relates to internal fixtures and fittings. With heritage buildings up to 80 percent of the value is in the external building envelope.
Repair and rebuilding costs for heritage buildings are significantly higher. There is a heavy reliance on specialist manual skills, materials are more expensive and can be difficult to locate. Depending on how significant the building is, extreme steps may need to be taken to source appropriate replacement materials. In one notable example, it was necessary to arrange for a quarry to be reopened to match the original stone used. That took considerable time and effort, not least due to the H&S measures that had to be implemented.
Bespoke production is often involved as precirca 1840 when industrial production established standardised sizes for building components, windows, doors, staircases were individually made for specific properties.
Businesses trading from a heritage property must consider the indemnity period they require for business interruption (BI). If the building is occupied in an office capacity, working from other premises is relatively straightforward.
However, if the heritage aspect of the business is integral to its existence – a stately home, country house hotel, museum – then the potential need for specialist materials and contractors has to be accounted for. The planning process can take up to two years and the building/repair process generally takes twice as long because of the need to source materials and skills. While many businesses choose a 12 month BI cover, this is insufficient for most heritage properties.
In terms of risk management, a key area is fire prevention and the question of fire stopping. Heritage properties typically consist of series of rooms which provided a degree of fire protection in themselves with thick doors and walls enabling fires to be contained. However, as soon as the integrity of the original wall is compromised by central heating pipework or cabling, firestopping measures have to be introduced. In an ideal world, the walls would remain completely intact, but where penetration has been required, any materials used as fillers must be fit-for-purpose with the necessary fire retardant properties.
Fire detection
The possibility of installing a sprinkler system in a heritage property would generally be remote. The resulting water damage that would affect historic contents or timbers and plasterwork could in itself be catastrophic. Emphasis then, needs to be placed on fire detection. Standard smoke alarms may not be effective if rooms are high ceilinged and an aspiration system may be more appropriate. Aspiration detectors work by sucking air through a network of pipes in the protected areas back to remote, typically high sensitivity, detectors. Using radio communications as an alternative to hard wiring between detectors and control panels can limit disruption to the fabric of the building – this could also overcome potential conflicts between conservation and strict H&S or Fire Service requirements.
The culture of the organization occupying a heritage or listed building can have a major impact on fire control and damage limitation. A detailed disaster recovery procedure and good co-operation with the local Fire Service is an essential.
An example of how this can work in practice took place quite recently at Blenheim Palace. The Palace has a roof measuring 3,400 sq m and has up to 30 rainwater hoppers. When water was seen coming into the private residence, a team was dispatched to unfreeze the relevant hoppers in accordance with the hot works procedures.
During this process, an abandoned bird’s nest, approximately two metres from the works, began to smoulder and ignite. This automatically activated a smoke detector in the roof space, which in turn alerted the workmen and the local fire brigade was summoned.
Blenheim Palace has regular familiarization exercises with the local fire station staff and employees were able to identify the smoke detector that had responded and direct the fire fighters to the precise section of the roof.
Having identified the exact position of the fire, the Brigade was able to break into the roof to remove the fire debris without the need for using any water. Such well-planned and practiced procedures prevented what could have been a major incident.
Asbestos is another factor that needs to be taken into account in old buildings. Use of asbestos in building became widespread during the industrial revolution because of its sound absorption, average tensile strength and its resistance to heat, electrical and chemical damage. Whilst the presence of asbestos, if sealed within the property, is not a problem any
exposure of the material could be a cause of major disruption. Rather than risk accidental exposure, say during the course of internal alterations, a precautionary measure would be to have a survey carried out by a specialist company with their subsequent findings made available to maintenance staff and any contractors brought in to work on the premises.
Old buildings do not constitute a risk in themselves but introducing modern working practices can both introduce risk and raise challenges. English Heritage, CADW and Historic Scotland all have clear guidelines on what can and cannot be done in a listed property and this can conflict with modern methods of working. For example, to fully install awired IT system would require floorboards being raised, holes being drilled in walls and the server would need to be in a suitable environment with humidity control and appropriate fire protection.
All of these would require appropriate authorisation from your local planning authority and this is by no means a given. Wi-fi can be a viable alternative. However, internal walls and floors in heritage properties tend to be thicker than modern construction so a series of booster points could be required to ensure functionality throughout the building.
Many of the recently introduced building regulations are focused on energy efficiency and the need to reduce energy wastage, an approach not always compatible with historic buildings. Insulating old properties can be difficult because of lack of wall cavities and the need to lift floorboards and access roof points. It can also introduce problems, particularly humidity as older properties have their own natural ventilation and were not designed for high levels of heat. Over-heating can lead to cracking in the timber and plasterwork as the moisture is removed, causing long-term damage to the fabric of the building. Changes in ambient temperature and humidity can also affect contents such as furniture and paintings and damage to these affects their value as well as historic significance.
Whether as a closed workplace or a venue open to members of the public, H&S issues come high on a building manager’s list of priorities. In reality, though, if a building is listed it can be difficult to make it safe in modern terms.
From the point of view of an insurer concerned with liability issues, the litmus test is based around what is reasonable and the key is documentation. Everything starts with a fully documented risk assessment and once risks are identified, it is a matter of putting in place what controls are possible, such as warning signs about uneven steps or differing floor levels.
Although the oft repeated statement that we live in a litigious age is true, it is also the case that courts are increasingly applying the ‘reasonableness test’ to cases.
Marcus Booth is Heritage Underwriting Manager with specialist insurer, Ecclesiastical

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