By GREG LANG, senior vice president at Munich Re America Specialty Markets
In our view, high energy costs, combined with funding challenges, are also having an impact on the maintenance of many schools' facilities. It appears that electrical equipment in some public schools is not being maintained to proper standards, which is leading to increased electrical fires. We have seen a 24 percent increase in frequency of electrical losses in public schools since 2006.
Proper equipment maintenance is not only good risk management but it is also cost-effective and environmentally friendly. Public schools spend $27 billion annually on nontransportation energy costs. With proper maintenance, estimated energy savings would be 5 percent to 15 percent, or $1.35 billion to $4 billion, according to the U.S. Department of Energy. This does not factor in the possible savings in lives of children in the public school system or the potential liability that could result from improper maintenance.
Bringing schools' electrical equipment and machinery up to higher standards may mean an initial upfront investment, but it will save money and lives in the long term. It is our hope that the additional money planned for education and infrastructure under President Barack Obama's new budget will help address this emerging risk.
April 15, 2009
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