Damage Consulting and Contracting

John DiMenno, CR, CMRS, CMP,  VP of Operations and Director, J. S. Held, Pittsburgh  Construction Consulting provided an overview discussion of this segment of the building failures industry.  His talk to the AE 537 Class at Penn State was a part of the Visiting Practitioner Lecture Series for this year.

Mr. DiMenno’s talk centered on the process of how insurance losses are assessed, monitored and finalized.  In addition, he discussed how firm’s such as J. S. Held assemble teams of engineers and other specialists  (internal and/or external) to address complicated and extensive losses such as major fires, wind storms and floods.  J. S. Held provides consulting services on a national basis for all types construction including commercial, industrial, high rise, special structures, governmental, residential and infrastructure.  Their extensive institutional commercial and residential experience has been accepted by the courts as expert testimony.

Some representative examples of the services they offer are:

  • Detailed repair cost estimates
  • Building replacement cost analysis
  • Cause of loss determination
  • Engineering analysis
  • Code compliance and requirements
  • American Disabilities Act compliance and evaluation
  • Structural steel evaluation
  • Building foundation evaluation
  • HVAC system testing and evaluation
  • Electrical system testing and evaluation
  • Vibration damage from blasting
  • Code compliance and upgrading
  • Construction defects
  • Commercial and Residential roofing and roof systems (flat, sloped & steeples)
  • Retaining wall evaluation
  • Parking garage structural evaluation
  • Elevators and material handling systems
  • Hail damage evaluation
  • Mold and environmental damage assessment
  • Clerk of the works and emergency service monitoring and evaluation

More  information can be found on  the J. S. Held Website.  Additional information on disaster response and remediation can be found on the sites of some of the industry organizations involved in this type of work including the International Restoration Institute.

Additional information to help jump start the discussion on this topic can be found in the article “Consulting to Insurance Companies” published in the November 2008 issue of STRUCTURE magazine.  Although J S Held is not an insurance company, much of their work relates to the insurance industry and the role of the structural or architectural engineer is similar regardless of the exact nature of the client.

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22 Responses to “Damage Consulting and Contracting”

  1. Jordan O
    October 18, 2018 at 3:51 am #

    John DiMenno’s presentation highlighted yet another angle of the building industry that many people don’t think about as much. The handling of claims and general insurance for buildings takes a significant knowledge of both the building industry and the law. Carefully balanced middle grounds between parties is often a fine line between a settlement and a court date and it takes a skilled individual to incorporate this into engineering. As John mentioned, often times their knowledge alone isn’t enough and an expert on a particular subject is brought in to properly evaluate the situation. One of the trickier parts of this whole process, especially when a building is severely damaged or collapsed, is performing the inspection and coming up with an accurate and fair estimate of damages and repair cost. Once a large amount of data is collected on building failures, it might be an interesting idea to see if a robot or drones could do the work of the inspector and even take a 3D scan of the site and everything needing to be fixed. This could help people to map out issues more efficiently and also increase the safety of jobs like this. John gave an example of a building that collapsed partially due to fire and he ended up on the roof of the non collapsed part inspecting damage. It is almost not worth the risk if something went seriously wrong and having a drone perform these inspections could be a welcomed solution into this part of the industry.

    • Josiah M
      October 18, 2018 at 8:20 am #

      Jordan,

      I too was surprised to hear that, as a forensics firm, that JS Held still has to call in experts to help with investigation. Mr. DiMenno mentioned they hire experts in fields from chemistry to structural engineering. Although, it was my impression that they were the experts, after this presentation it makes sense to contract out to other entities when what is being investigated is out of your area of expertise. Then the issue can be handled in the most proper fashion.

  2. Jackson H
    October 16, 2018 at 9:05 am #

    Mr. DiMenno’s presentation about failures and the interaction that he has with insurance companies was informative. It was interesting to hear about his experiences throughout his career since he went through a very non-traditional career path, starting out as a carpenter and gradually advancing his education and qualifications to the point where now clients and insurance company trust his expertise to assess damages when the costs are in the millions. You have to be absolutely sure about what you are doing and the conclusions that you make when there is that much at stake. I thought it was impressive how after years of experience, Mr. DiMenno is able to look at a failure and give a fairly accurate rough-estimate of how much it will cost to fix or replace it at first glance before getting into the nitty gritty details about the origin and extent of failure. It shows his years of expertise.

    Even with all of his experience it was interesting to hear about how he still gets exposed to unusual failures and circumstances continually. The fire at the recycling plant where acres and acres of cardboard bales caught on fire and essentially scorched everything in the vicinity is an extremely unique and rare event. There isn’t really a standard operating procedure for sifting through the wreckage and assessing the damage. To solve these complicated and unusual events, the expertise of multiple parties is required and the coordination and network of resources that are available to the industry leaders in forensics is incredible.

  3. Smithr
    October 16, 2018 at 8:56 am #

    John presented some really great case studies of some building failures that he has handled throughout his career. The studies provided some perspective on the scope of failure work and how every case is a little bit different. These projects were highlights of a long career, so not every case is likely as exciting as the ones presented in class by John.

    The study I found most interesting was the North Shore connection for the Public Transit in Pittsburgh. During this project, a tunnel was installed from downtown Pittsburgh to the North Shore, travelling under the river. Specifically John focused on a section of the North Shore. Due to low soil stability, the substrate needed to be grouted before the Tunnel Boring Machine (TBM) could proceed with excavation. Grout was pumped for what seemed to be longer than expected. Upon further inspection, a nearby electrical ductbank had deteriorated and the grout was filling the ductbank instead of the soil voids.

  4. Katie W.
    October 16, 2018 at 8:38 am #

    John DiMenno’s talk was really interesting to me. Most of the work done by J.S.Held is for insurance companies. This is a side of the building industry that is not really touched on in most of our classes and I enjoyed getting a glimpse of what that is like. I didn’t realize that multiple forensics companies are sometimes called in to examine a collapse or failure. For the David Lawrence Convention Center collapse, he mentioned that there were teams there for many different parts which were insured. He also said you had to be careful about sharing information as you could possibly be presenting against each other in court. You have to be very sure in your calculations in order to be an expert witness. Every assumption must be justified completely.
    The case which interested me the most was the one where mold was growing all over the bedroom from a large amount of saturation. The answer to the root of the problem was not immediately obvious and had to be investigated. After it turned out to be a faulty mechanism in a steamer, the insurance company sued them. Such a small fault caused huge amounts of damage. This shows the importance of documenting everything on site.

  5. SamZ
    October 16, 2018 at 8:34 am #

    Mr. Dimenno’s presentation offered a new perspective we had not yet heard from in this class, and that is from a contractor. While he did go over topics like the engineers in past presentations such as investigating the cause of the issue but he was often more focused on the remediation process with regards for cost and schedule. This makes sense given that a building owner after a fire or flood just wants to reopen and get get back to business as soon as possible and they call a contractor to make that happen not an engineer. This can be scene in the case studies to gave in his presentation, the hotel in Binghamton where the issue was known and they were only concerned with getting back and running. Another is the fire at the card board recycling facility, if I remember correctly Mr. Dimenno was there withing two business days after it happened with the expectation there would be a plan to get things back and running in a week. Another area where a contractor seems the right contact is for getting pricing, this is a very important number for an owner and insurance company, and while and engineer can tell what is safe, or repairable, or too far gone with some expertise estimating isn’t something they’re sure of.

    • Eric I
      October 17, 2018 at 1:55 pm #

      Sam,

      I think you brought up an excellent point in differentiating the roles of the contractor and engineer in a failure event. Obviously these are two very different perspectives to think from but both are equally important to the processes of investigation and remediation.

      We’ve heard from quite a few engineers so far this semester and their roles all seemed to directly relate to one another. I agree that their focus was more along the lines of determining what can stay, what needs replaced and what is salvageable but needs some repair. All of these things are centered around redesign or analysis to determine if something is still structurally sound/safe. This expertise certainly requires an engineering background and is not something you would necessarily go to a contractor for. Ultimately, the safety concerns need verified or nullified by someone with design experience.

      While the contractor may have a relatively good guess about these concerns, numerical backing is still required for a final determination. However, their responsibilities include pricing, scheduling and figuring out the means and methods for repair. Contractors are better equipped for these tasks than designers anyways due to their experience in these fields. A successful forensics investigation and remediation plan requires both party’s skills and leveraging their respective strengths can optimize success.

    • Abby S
      October 18, 2018 at 8:05 am #

      Sam,

      I agree with you about the engineers’ area of expertise and that it usually extends only to the physical damage rather than the cost to repair it. I think this is very important because it requires other people to be involved in order to estimate the repair cost. With more people on the project, it seems like it could make it more difficult to get everyone (owner, engineer, insurance, contractor/estimator, etc) to agree. I also like that you brought up the schedule of returning to operation. A need to get back to business has a large impact on the thoroughness of investigations and estimates, which may be outweighed by the benefit of resuming operation and receiving income from residents, guests, and events. I think it would be very interesting to see how owner’s react to a failure and whether their main initial concern is returning to operation as soon as possible or getting the best possible evaluation and repair. As you said, the cardboard plant hoped to get back and running in a week, so it’s clear that having a short timeline is critical to some owners.

  6. Clayton T
    October 16, 2018 at 8:34 am #

    Mr. DiMenno from JS held presented some new ideas about forensic building analysis with less of a focus on the cause of the failure and more on how the outcomes affect the involved parties. Damage assessment comes along with the responsibility of millions of dollars in many cases, so I was interesting listening to Mr. DiMenno points out some aspects that often become the most important to the insurance companies. With Failures such as fires or natural disasters, the extent of the damage is often measured in what failures may be there but are not part of this given event and what aspects of the building can still be salvaged. I was surprised to hear about such the separation between the insurance process and the estimate of the building repair cost, in my mind I would expect a building owner to be aware of the amount that may be covered and work with the forensic investigator to fit a solution into that budget but that process comes later once the insurance company correctly allocates the funds. As a whole, the forensic investigation to provide insurance information combines all aspects of building systems, assessing the damage of each whether it may be structural, mechanical, electrical and the construction process that comes along with it to produce their final result

  7. Josiah M
    October 16, 2018 at 12:46 am #

    Mr. DiMenno’s presentation of JS Held and the work that he has been involved gave a different perspective into the insurance side of the forensics world. Throughout the duration of the class, we’ve been hearing more about the repair of and lessons learned from failures. But during this presentation, we got to hear more about the insurance side of forensics.

    Mr. DiMenno gave some examples of past projects and how he’s dealt with the insurers. Mr. DiMenno mentioned that JS Held does conduct design work for repair as well, but sometimes they aren’t even used because the expense to repair would exceed the expense to build an entirely new building. It was interesting to hear that. The thought that something is so expensive to repair, it’s easier to rebuild, is hard to imagine. Mr. DiMenno brought this to light in one of his examples and it was easier to see how this could happen. In this case, there were portions left of the building that were still seemed to be structurally sound. But upon further investigation, it was found that additions were made to the building that were sort of pieced together and did not meet code. That was one of the biggest contributing factors to the repair cost, bringing the building back up to code. With that taken in consideration, coupled with the rebuild of the destroyed portion of the structure, it was decided that the more economical option would be to rebuild rather than repair. A good question related to rebuilding due to code issues that Sierra mentioned is, would insurance cover a code update? Or is that dependent on the insurance policy?

    • Katie W.
      October 18, 2018 at 8:00 am #

      Hey Josiah,
      You bring up an interesting point about the code updates. I was curious myself so I did some research on the internet and it seems to be mostly dependent on the policy. Most, at least for homeowners, do not have code updates built into their insurance plan. The are only insured for the replacement cost or actual cash value of the building. The actual cost to build the building exactly as it was with no updates. Anything extra would have to be paid for by the owner unless you have coverage for building code updates.

  8. Eric I
    October 15, 2018 at 11:51 pm #

    Mr. DiMenno gave a very interesting presentation about the insurance side of building failures. In his role with J.S. Held, he frequently works with insurance companies as a property damage consultant to determine damage extent, financial losses, and the proper course of action to address the losses. This is a very interesting career path in the construction industry because so many different things come into play.

    When a catastrophic event does occur, he explained how the first step is often to identify the cause and origin of the failure. This can not only aid in determining the responsible party but also helps to identify other potential problem areas within the building. After that, he went into depth about pricing out an estimate and developing a repair scope. At J.S. Held, he said he relies heavily on printed data such as RS Means to deliver his estimates. As for the repair scope, a lot of different factors can contribute. For example, in the manufacturing plant case study he spoke about, the initial evaluation of the site looked like nothing more than a routine rebuild totaling about $500,000. As he looked more into the building, however, the structure was full of hazardous materials that made renovations extremely expensive and time consuming. This case that seemed so simple on the surface quickly turned into a $3 million dollar project. This showed how necessary the expertise in our field is for insurance companies and is what can really make it an exciting profession.

    The case study I found most interesting was the recycling plant fire. He explained that bails of pulverized cardboard caught fire and basically destroyed the entire facility. As an insurance company, assigning a price tag and repair scope would have been near impossible without the expertise of J.S. Held. Determining the cost of the buildings alone would have been a tall task but sorting through the claims and determining what was legitimate may have been worse. It takes an industry professional with years of experience to determine these things and to advise the insurers. I was also very curious if there were any new resulting regulations or code changes for this type of facility. It seemed odd that all of the flammable material was stored next to buildings so I’m curious of any kind of negligence was assigned to the owners of the plant.

  9. rgstanza
    October 15, 2018 at 11:20 pm #

    I think it is interesting how an insurance adjuster and a hired structural engineer work in tandem to determine coverage and assign an appropriate repair plan in the event of a structural failure. While I definitely agree that a structural engineer should be cautioned not to comment or speculate on insurance coverage, as it is not their field of expertise, I wonder if this dynamic ever backfires.

    It seems like there is somewhat of a disconnect between the adjuster and engineer, as the adjuster is there to understand and interpret insurance policies but has no structural expertise, and the engineer is just the opposite. I’m sure this works great for the majority of cases, but are there outliers where expertise is needed in both to appropriately assess the complexity of a case? Is it necessary to have a niche field where a professional could be fluent in both worlds, or would this cause too many problems with conflict of interest?

    • Jordan O
      October 18, 2018 at 3:55 am #

      Ryan,

      I think it definitely could be possible, and even cheaper for an owner, to have someone fluent in both fields on the project. A company that trains their workers in both areas has an added appeal to an owner looking to hire a consultant and an adjuster, and the company can charge more than they would for just an engineer or just an adjuster to compensate the employee for their additional skill set. It could absolutely get tricky with what they are allowed to say from a structural evaluation standpoint or from a legal standpoint, but with enough training and experience, I think it could be possible to eliminate these worries.

  10. Steven B
    October 15, 2018 at 8:53 pm #

    As discussed before, in the construction industry the level of detail you dedicate to your processes may actually make the difference between having a failure or not. The level of detail that a forensic engineer has in their processes will also determine if they are able to reconstruct the circumstances of a failure in order to correctly diagnose the cause of that failure.
    Mr. DiMenno, through his presentation, was able to convey the importance of your process and the level of detail that is required when the issues at hand are, what happened, whose fault is it, what is the cost of the damages, and how much should be paid for the repairs? An Engineer could be correct in their evaluation of the incident, but without documenting all steps that they took to get to that conclusion, a lawyer may be able to discredit you by pointing out small inconsistency’s or gaps in your analysis. Let’s say that you did not add your review of a specific section of the building code that might be related to the cause of a failure. It is not that you did not do the review, but due to a flawed process the review was omitted. A lawyer could point out that this review is not in your report and if you that review is missing, then what else could be missing? They could call into question the entire report and especially the conclusion. This could result in you loosing that client and possibly any future clients. It takes years to build a relationship with a client but you can lose a client with one bad move.

    • Sierra S
      October 16, 2018 at 5:24 pm #

      I completely agree with what you are saying. The section of the industry that Mr. DiMenno introduced to us is very particular and exact in its findings. When you are calculating the loads on the building during a forensic investigation, you are not going to use the assumed dead load like in design. Instead, the exact materials and weights are used. Even though 5 psf isn’t going to make a difference the engineer need to build their credibility and show their attention to detail to be seen as a trustworthy source in court.
      Unfortunately, going to court is such a large part of our industry that I believe it should be covered more in the engineering curriculum. Next semester I am taking the master level law class. I am hoping to learn what steps need to be taken in my everyday practice so that if I ever had to go to court what I say in previous emails or show in my designs are viable in court. Also, I want to know what process occurs when a case ends up in court. I haven’t had to consider any of these factors previously but the closer to graduation I come I see the reality ahead. As much as no one wants to go to court, or see their building fail, it is something we have to prepare for.

  11. Abby S
    October 15, 2018 at 7:19 pm #

    In his presentation, Mr. DiMenno discussed negotiations involving the building owner and insurance company. He mentioned that the owner often tries to acquire money in excess of what is actually needed to repair the building, and they may even end up suing the insurance company for a larger sum. Part of the work that J.S. Held does involves specifying what is actually needed to repair the building. The article “Consulting to Insurance Companies” states that a “misconception is that the insurance company has deep pockets and can afford an over-conservative repair design or addresses claimant-desired repairs unrelated to the loss event.” The reality, though, is that when structural engineers abide by this misconception and support unnecessary repair work, the final designs can waste resources and lead to extra construction costs for the engineer. I thought this was interesting because I typically think of the negotiations having benefits and costs only for the owner and insurance company, but it is important to note that improper claim evaluations can actually cost the engineer. I think this is an interesting lesson and would be curious as to how often the engineers are left responsible for the costs of an overly conservative scope of repair.

    • Smithr
      October 18, 2018 at 9:05 am #

      Abby – Interesting point you bring up with the insurance companies having “deep pockets” because honestly that is what my first conclusion as an outsider is. I think often times folks are so eager to get the building back together that they lose sight of the complexity of building construction. Owners or insurance agents who are unfamiliar with construction seem to have a linear mentality about who is at fault. We need to consider that everyone involved in the project has a slice of the pie.

    • Jackson H
      October 18, 2018 at 9:14 am #

      The trend of business owners attempting to claim more in damages than what actually occurred during a failure incident and leaving it to the engineers and insurance companies to sort out reminds me the same situation that Mr. Bechtel talked about with how he believes that he shouldn’t have to hire full time QA/QC staff just to make sure that the contractor’s QA/QC is good. He’s paying for something that should have been done in the first place. Similarly, should the Engineers and Insurance companies have to deal with business owners attempting to claim excessive damages in the first place? It seems like it is almost a malicious waste of time and resources on the owner’s part. Is there any legal recourse for insurance companies to hold owners accountable for the additional costs associated with trying to decipher what claims are within the scope of damage? I wonder how often suits over insurance fraud get brought against owners since it seems like it is so commonplace for owners to try to sneak every repair they can into what is covered by the insurance company and squeeze as much money as they can out of a claim.

  12. Ryan L
    October 15, 2018 at 9:11 am #

    The cost of repair after considering code compliance regulations is an interesting point. In the DoD, once you reach 50% of the plant replacement cost, seismic, wind/hail, and other code requirements must be met.

    On a side note, the NYT had an interesting article about one home in Mexico Beach, FL that was the only remaining home in the area after Hurricane Michael came through. The house was built last year and the owners built the home to withstand large hurricane force winds even though the panhandle typically doesn’t have the same hurricane building code requirements as souther Florida. the article didn’t say what the cost premium on the construction was, however the architect was quoted as saying the cost was roughly double of what it would have been to build to code only.

  13. Sierra S
    October 13, 2018 at 1:31 pm #

    John DiMenno gave a great talk. It was interesting to hear the insurance side of failures. I understand J.S. Held is a consultant for insurance companies but they hold the insurance companies interest at hand. With this being the case it seems that it isn’t necessarily their job to find the root of the failure. Of course, knowing the cause helps their investigation. How I understood it is that it is their job to determine what system components are beyond recovery and determine the price of repair. This method of pricing is largely done by using resources, such as R.S. Means. During their cost determination they need to be mindful of documenting where they found their numbers and for what items that are to replace. This is crucial due to the increase chance that these claims can enter into court.

    A big component that stood out to me was the requirement to make the building up to code when the repair is made. This requirement can increase the payout the insurance company is required to provide, especially for older buildings. For example, there was a major price increase (from about 0.5 million to 3 million) for the repair of the Manufacturer Plant Fire due to code regulations. The issue they encountered was asbestos. Asbestos was discovered throughout the entire building, so even though the fire was located at only one corner the entire building required “repair.” I am curious if all insurance companies are required to pay for the different of bringing the building up to code once a failure occurs or if it is dependent on the coverage.

  14. mkev
    October 10, 2018 at 10:07 pm #

    Interesting that we have a guest speaker discussing some of the work they do for the insurance industry the morning after a historic hurricane landfall in Florida. This article https://weather.com/storms/hurricane/news/2018-10-10-hurricane-michael-cat4-historic-landfall-gulf-coast-florida is just one update of what is happening with Hurricane Michael. Lots of engineering lessons likely to come to light as we review the damage.

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