By Peter L. Higgins
The process and systems for managing Terrorism Risk are changing as the commercial real estate finance and building owners or developers strive to establish new standards. Critical Infrastructure Protection is a national priority. The key catalysts for change could further motivate implementing new risk reduction programs and measures.
Some of the key catalysts for change are:
Insurance – those institutions that are sharing risks that a building owner faces.
Finance – banks, REIT’s (Real Estate Investment Trusts), and others such as pension funds that provide the capital for investments in commercial infrastructure.
Regulation – Federal, State and Local jurisdictions that regulate building design, construction and operations.
Overall Terrorism Risk Reduction begins with these key catalysts in concert with owners of critical infrastructure, whether that is an office building, a hospital or a hotel. These soft targets are where the risk management decision-making is already taking new directions.
In order to introduce new changes in process or design that impacts the physical or operational aspects of buildings (to reduce terrorism risk), it is important to better understand how these change levers can provide the incentives for owners. Being forced is never as appetizing as being induced to do anything. In order for changes to take place, the environment must reward investments in preparedness and safety. First however, we must understand the character of terrorism risk in critical infrastructure and the tools currently available to help manage that risk.
More on this series over the next few weeks.