Seismic Hazards in Canada: 3 Changes to Consider From the Newly Updated National Building Code
The latest release of the National Research Council’s National Building Code of Canada (NBCC 2015), highlights some significant changes to the risk of seismic hazards across the country.
The Code changes are based on new scientific data, specifically, new seismic maps that indicate a general decrease in seismic hazards across the country. Among the most significant areas affected are:
- Ottawa, reduced hazard levels expected to result in a significant reduction of modelled damages.
- Vancouver Island, where risk levels were already considered “very high,” have increased even further.
- Yukon & Northwest Territories both see a significant increase in seismic hazard in multiple regions (including Whitehorse, which has seen two recent earthquakes).
While this new data is expected to be incorporated into seismic hazard models commonly used by insurers to assess earthquake exposure, models run up to this time have probably overstated the risk. Organizations with assets in any of the affected areas should take the following three steps to evaluate the shifting impact of seismic hazards:
- Reassess the seismic risk exposures of your portfolio and understand the potential impact on your risk profile.
- Re-evaluate the potential impacts on contingent assets, including assessing critical suppliers and other third party partners. They may have properties located in areas that are affected by the changes in seismic hazard, resulting in a possible impact of business interruption exposures.
- Re-evaluate risk and insurance buying decisions based on seismic risk: Depending on whether the risk has decreased or increased, a review of current limits, deductibles, and premiums may be warranted for some of all of your locations.
At this time, it remains unclear how quickly insurer models will be updated to reflect the new data. Until then, organizations are encouraged to reach out to your risk advisor to help you navigate these changes.