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The Key to Seismic Resilience and Lower Insurance Costs

How can you make your commercial building more earthquake-resistant and insurable? If you own or occupy a commercial building in an earthquake-prone area, such as Wellington, you may be worried about the potential damage and disruption that a seismic event could cause.

Author: Ryan Mudler

Published: 25 February 2024

You may also be facing higher insurance costs or difficulty finding adequate cover for your property and business.

Fortunately, there are ways to improve the seismic resilience and insurability of your commercial building. In this blog post, we will share some insights from a recent insurance advisory report that explains why insurers prefer base-isolated structures with stable foundations for commercial buildings in earthquake zones.

What are base-isolated structures?

Base-isolated structures are buildings that have a special system that allows the ground to move below them without causing the damaging upward accelerations that normally affect multi-storey buildings during earthquakes. Base isolators are devices that act like shock absorbers and reduce the impact of seismic forces on the building’s superstructure.

Base-isolated structures also need to have a stiff superstructure, so most of the building’s movement occurs in the isolators only, rather than in the superstructure itself. This reduces the risk of structural and superficial damage, such as cracks in walls, ceilings, and cladding.

Why are stable foundations important?

Stable foundations are foundations that are not prone to liquefaction or lateral spread. Liquefaction is a phenomenon that occurs when the soil loses its strength and behaves like a liquid due to the shaking of an earthquake. Lateral spread is the horizontal movement of the soil due to the loss of lateral support. Both liquefaction and lateral spread can cause foundation damage and structural instability, which can result in differential settlement, tilting, or even the collapse of the building.

Stable foundations can be achieved by using deep piles that anchor the building to the solid ground below the liquefiable layer. Deep piles can also help to transfer the seismic loads from the base isolators to the ground.

What are the benefits of base isolation and stable foundations?

According to the insurance advisory report from the Insurance Council of New Zealand, base isolation and stable foundations can offer several benefits for commercial building owners and occupiers, such as:

  • Lower insurance costs and better terms: Insurers and reinsurers are more likely to offer cover and at more favourable rates for base-isolated buildings with stable foundations, as they are considered to be less risky and less costly to repair in the event of an earthquake.
  • Increased business confidence and staff and occupant wellbeing: Base-isolated buildings can provide more security and comfort for the tenants and residents, as they are less likely to suffer significant damage and disruption from an earthquake. This can also enhance the reputation and attractiveness of the building as a place to work or live.
  • Increased economic sustainability for New Zealand: As a country, we cannot afford to keep replacing buildings that become damaged or unusable after earthquakes, nor can we afford to see businesses incur huge losses or fail because of the lack of a suitable premises. By investing in base-isolated buildings with stable foundations, we can reduce the economic and social impacts of earthquakes and create a more resilient and sustainable future.

How much does it cost to build a base-isolated structure with stable foundations?

The cost of building a base-isolated structure with stable foundations can vary depending on the ground conditions and the design of the building. However, the insurance advisory report estimates that the margin between the cost of a comparable, standard steel or concrete construction with foundations designed to the current minimum loadings codes and a base-isolated, steel frame construction with stable foundations can be up to 10%. This margin can be reduced by taking advantage of the lower insurance premiums and the higher occupancy rates that base-isolated buildings can offer.

If you are looking for a way to make your commercial building more earthquake-resistant and insurable, you may want to consider base isolation and stable foundations as a viable option. Not only can they reduce the risk and cost of earthquake damage, but they can also provide more peace of mind and value for your property and business.

To learn more about base isolation and stable foundations, you can read the full insurance advisory report here



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