Why do two warehouses that look similar present very different levels of risk? The answer often comes down to more than the building itself. What is stored inside, the safety systems in place, and even the surrounding environment all play a role.
To evaluate these factors, underwriters use a framework called COPE, which stands for Construction, Occupancy, Protection, and Exposure. It provides a structured way to assess a property’s overall risk and better understand the potential for loss. Below, we outline what underwriters consider in each piece of the framework and why it matters for brokers and clients alike.
Construction
Construction looks at how the building was built and its overall condition.
Underwriters may consider:
- Building materials
- Building age and size
- Roof condition
- Electrical and plumbing systems
- Major renovations or updates
These details help determine how a building may perform during events like fires, severe weather, or other property losses.
Occupancy
Occupancy focuses on how the building is used.
A warehouse storing packaged goods presents different risks than one storing refrigerated products, lithium batteries, or hazardous materials.
Underwriters look at factors such as:
- Business operations
- Types of goods stored
- Storage methods
- Inventory values
Protection
Protection evaluates the systems in place to help prevent or reduce losses.
This may include:
- Sprinkler systems
- Fire alarms
- Fire extinguishers
- Security systems
- Backup power for temperature-controlled inventory
Well-maintained protection systems can help reduce the severity of a loss when an incident occurs.
Exposure
Exposure considers risks outside the building that could impact the property.
Examples include:
- Flooding
- Hurricanes and windstorms
- Wildfires
- Earthquakes
- Nearby businesses with higher-risk operations
These outside factors can significantly affect a property’s overall risk profile.
Why COPE Matters
COPE helps underwriters evaluate a property beyond what can be seen at first glance. It also gives businesses a better understanding of the factors that influence risk.
For companies storing inventory at owned or third-party facilities, improving fire protection, maintaining building systems, and understanding environmental exposures can strengthen risk management and help reduce potential losses.
At Falvey, we take a comprehensive approach to evaluating inland marine and stock throughput risks. By combining underwriting expertise with practical risk insights, we help brokers and clients better understand their exposures and make more informed decisions. Contact our inland marine team today to learn how we can better understand your client’s property and inventory risks.
