NextGen Risk | Top 3 Finalists | Seneca Polytechnic

In their final presentation to the judges, Seneca’s broker team zeroed in on four key risk exposures for Boreal’s operations.

First, property risk.

“Boreal Outdoor Supply is located near dense forest, and the building is wood construction, which increases fire risk,” the team told judges. “Furthermore, the asphalt roof is old and needs replacement. And local fire suppression resources are limited. “Together, these factors could result in a total building loss and a long-term operational shutdown.”

Second, inventory exposure.

“The way your inventory is currently stored [would] prompt [a higher] loss. As an example, some inventory is stored outdoors on pallets near the forest. This creates several risks, including direct fire exposure and even theft. The potential loss impacts include a large inventory lost during peak revenue season and disruption to commercial supply contracts.”

Third, operational and business continuity exposure.

Wildfires frequently cause highway closures and supplier disruptions. As a result, Boreal may face lost sales revenue, contract penalties, and loss of customer trust, the team said.

And finally, there is a management and risk culture exposure.

“Our review found several risk management gaps, including the lack of formal emergency response plan, core property maintenance, no clear evacuation procedures, and limited wildfire training for employees,” the team told judges. “Also, we noticed that the fire alarm is not monitored and there is no sprinkler protection in either the warehouse or the storefront. These risks lead to higher insurance cost and the probability of a catastrophe loss.”

What to do about all of these risks?

“Our recommendations focus on three levels of protection — property protection, operational risk, and culture improvement,” the team said. “These actions are prioritized for maximum risk reduction with practical cost considerations for property protection improvements.”

On the property side, the team recommended creating a defensible space by clearing vegetation and combustible material within 10 meters around the building. Instead of storing inventory near the forest line, the team suggested storing inventory in metal containers or covered structures. And since the warehouse doesn’t have sprinkler protection, a quick fix is to install portable fire extinguishers. As for the asphalt roof, the team recommended replacing it with a new, asphalt roof — a suggestion one of the judges queried following the presentation.

On the operational side, the broker team offered to help develop an emergency response plan. The plan would include an alternate warehouse option, backup suppliers, and temporary shipping arrangements. Also, Boreal should conduct supply chain contingency planning. “Since highway closures are common during wildfire events,” the team told judges, Boreal should identify alternative shipping routes, establish backup partners, and pre-arranged temporary shipping storage locations.

Lastly, for risk culture improvements, the brokerage team recommended annual loss control reviews, which would be conducted by professional loss control inspections. And staff should be trained in emergency procedures, fire prevention, and evacuation protocols.

Judges asked a number of questions about the presentation, including the replacement of an old asphalt roof with a new asphalt roof. “If so, why an asphalt roof and not another material?” one judge asked about the choice of material for the new roof.

“The asphalt roof, being made of tar, [is] not fire-proof, but it is more fire-resistant compared to wood or another material, for example,” the team replied.