August 2021 - Sachse Construction

Lessons from Hurricane Maria’s devastation in Puerto Rico

catastrophic event like a hurricane can be devastating for the people who live in areas prone to extreme weather.

It can also be one of the most difficult challenges faced by insurers, business owners, and construction professionals tasked with rebuilding. Delays in clean-up and reconstruction can inflict additional, long-term damage and pose further hazards that stall and complicate the rebuilding process.

In the case of Hurricane Maria, much of the island of Puerto Rico was decimated, including most of the commercial shopping centers across the island. Much more than simply retail shopping destinations, these centers are also community hubs home to eateries, grocery shopping and, and even host numerous local events. They are important cultural centers for community gatherings.

Firsthand experience

In response to damage, Sachse, its clients, and the company’s insurers had to work in lockstep to repair the damage and help get these local economic hubs back in business.

Rebuilding stores was a complex endeavor on an island that had just seen much of its infrastructure wiped out. Even though the power would be limited for months, it was imperative to begin the clean-up and reconstruction immediately. The potential for countless complications and threats to public health and welfare grew daily.

To be successful, the property owners, retailers, builders, and their insurers had to work closely, coordinating all of their efforts into one combined strategy.

The lessons learned from this unique experience will prove invaluable as a road map to future disasters in the region and elsewhere, particularly given the dynamics of the island’s climate and geography, its compromised infrastructure, and the need for off-shore support and supplies.

The lessons learned in Puerto Rico are all the more important for builders, insurers, property owners, and the worldwide business community in light of the global threat of climate change, rising sea levels, the increased frequency of “100-year floods,” and other natural and even man-made disasters.

What follows are four lessons learned from the reconstruction of over a dozen retail centers across Puerto Rico in the aftermath of Hurricane Maria. These tips will help insurers and those who must rebuild to better understand how to work together effectively following a major CAT event.

No. 1: Have all boots on the ground early.

The number one advantage experienced during the reconstruction of these centers came from the active and deliberate participation from all parties, every day, from the beginning. Having an insurer representative on-site who joined the reconstruction team and engaged in the process helped prevent confusion, allowed the team to avoid bottlenecks, and facilitated smooth approval processes.

By having an on-site team, the insurer had direct access to and an understanding of key details that might have been lost or overlooked in communication without a presence on site.

Any reconstruction of this scale will have its challenges but having a team on-site that represents all parties for better collaboration lays the groundwork for a successful project.

No. 2: Plan collaboratively.

Everyone has their way of doing things. Insurers have their approval processes; builders have their timetables, owners and retail operators have their priorities. These diverse priorities will inevitably lead to some conflict.

From the start, all stakeholders need to establish a clear and carefully defined process and timeline with agreements on responsibilities and lines of authority and reporting. This plan should include everything from initial assessments through scoping, insurance approvals, pricing, subcontractors, and the remediation or demolition process. Taking the time to plan in the beginning will save time in the long run and reduce unnecessary complications.

This plan should be more than a list of steps. It must be a complete guide to the work, accessible and understood by all parties. The Sachse team created a simple flowchart that clearly represented the various steps in the process and kept track of the needs and priorities of everyone involved. This kept all parties on the same page throughout the rebuild.

No. 3: Engage with the builder.

Insurers and builders want the same things in these instances: a project completed on time and on budget. Too often, builders and insurers are at odds due to a lack of communication. It’s a fixable problem. Simply start communicating early, often, and in detail. By engaging in this way, insurers and builders can find solutions that save money in the long run and can even reduce claims.

For instance, perhaps a CAT event reveals an area that is prone to leaking or flooding? Would it be better to rebuild the area as it was or use a different design or materials to prevent future claims? The answer comes when insurers and builders, not to mention property owners, talk to one another.

For insurers, regular builder communication means a clear and transparent approvals process. By forming these relationships, all parties better understand the needs, priorities, and processes of the other when lines of communication are clear and all parties are accessible. This helps insurers to provide approvals or guidance while builders better understand the type of detail and information required more easily by the insurer.

No. 4: Record everything.

For every action or decision made, a record must be made with supporting documentation. This includes taking an inventory of all materials — used and otherwise — as well as contemporaneous notes of decisions/discussions and carefully tracked change orders.

Nuanced construction material inventory tracking is not uncommon for insurers but might not be the habit of a typical construction crew. By working collaboratively, insurers can prevent disagreements before they happen, and builders can avoid unnecessary complications. Everyone on the collaborative team should maintain records, and these records should be compared for accuracy throughout the project.

The Hurricane Maria reconstruction effort was just one example of a successful project made easier through collaboration and communication among builders, owners, retailer operators and insurers. With all parties engaged in the process from day one and communicating clearly and in detail, insurers can ensure more projects move forward successfully and can potentially find opportunities to reduce costs, headaches, and even future claims.