The Changing Risk Landscape for Suspended Ceiling Contractors

NZS4219:2009 Seismic performance of engineering systems in buildings states: All components of engineering systems shall be configured with a clearly defined load path to transfer the actions (horizontal and vertical) generated in an earthquake, together with the gravity loads, and process induced actions (for example, thermal expansion) to the supporting structure.

NZ an early world leader
History tells us that in the late 70’s and early 80’s New Zealand was a leader in the development of code provisions and innovation in design practice to contend with drift induced non-structural damage to buildings- unfortunately this was not followed through with non-structural building elements and associated seismic restraint compliance.

In the wake of the Christchurch earthquakes and recent Wellington seismic events, office building stock has come under detailed scrutiny. In recent moderate seismic activity in Wellington, where buildings were not tested to anywhere close to a modern design level earthquake, the effect was to place focus on the costs associated with business interruption. One relatively new Wellington building is thought to have cost as much as $16 million to repair damage.

The Importance of non-structural seismic design
One of the reasons why non-structural seismic design is important is that the non-structural features of the building are usually more seismically fragile than the structure.

The level of motion that may slightly crack structural walls is usually enough to make non-seismically designed light fixtures collapse, ceilings fail, electrical switchboards & large HVAC plant slide and overturn. Since most of a commercial building is non-structural, most of the value exposed to risk of damage is non-structural.

The single biggest value within a building is referred to by some as the ‘ubiquitous overhead non-structural sandwich.’ This comprises of suspended ceilings, fluorescent light fixtures, air grilles & diffusers and above
this architectural layer all the concealed air handling ductwork, fan coil units and associated HVAC pipework,
electrical cable trays, fire sprinkler pipework etc. – all poorly co-ordinated by consultants who literally cram all this equipment into a limited space.

When these separate service designs are federated into a project Building Information Model (BIM) there are many
clashes, with often no allowance for the required seismic restraint clearances. This is not helpful as this non-structural sandwich is one of the chief sources of seismic fragility in a modern commercial building.
This all needs to be co-ordinated at the start of a project.

Now here’s the rub
Over the last few years the commercial property insurance market in New Zealand has seen significant changes involving earthquake policy deductibles.

In the past these deductibles were between 2.5% – 5% of a claim for the entire property portfolio covered under one policy. For example: A $50m building with a $10m earthquake claim and a deductible at 5% would have a policy excess of $500,000.

With current market changes, policy deductibles tend towards a percentage of the property sum insured. Now with a 5% deductible rate using the example above, the policy excess would be $2.5m per single building site. Quite a change!

A lot more risk is now going to fall on the balance sheets of that forgiving lot, known as building owners.

Wellington’s non-compliant office stock
After a recent assessment of many buildings, the owners or occupiers should not be heartened by the performance
of Wellington’s office stock.

I have recently been engaged to provide NZS4219 compliance assessments for several clients who are not building owners, banks, property consultants, or main construction companies. I have been engaged by the potential occupiers of office space – the firms who ‘pay the piper’.

All properties inspected were non-compliant. No services within the ceiling void were restrained where required and the clients under advice declined the offer of a long term lease.

Contractors – I suggest you protect yourselves and document your Producer Statements well!!

The risk to contractors

Reports such as these are changing the risk landscape for all contractors as they expose the lack of seismic restraint of services and these issues can rapidly escalate to become latent defects for contractors.

Many companies now make risk management part of their day to day operations and include it in project meetings, staff training etc – they also identify all the risks that are present in their projects or buildings they occupy.

Contractors – I suggest you protect yourselves and document your Producer Statements well!!

Terry Johnson
Reveal Seismics Limited

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