Probable Maximum Loss | PML | Seismic Assessment

Are you buying, selling, or developing a property in a geologic zone where there is a probability for earthquakes? Are historic earthquakes documented in your site area? Is there seismic activity in the area of your property?

A Probable Maximum Loss (PML) Seismic Assessment, or Seismic Damageability Assessment of a property, is completed to assess the potential for losses from an earthquake occurrences in an area. The Scenario Expected Loss (SEL) and Scenario Upper Loss (SUL) assessment recognizes that earthquakes are randomly distributed in time and are usually defined on a probabilistic basis.

Diablo Green Consulting Inc. specializes in conducting probabilistic studies of the expected loss to buildings from damage associated with earthquakes, and are used to characterize the earthquake vulnerability of buildings. The reports assess the probable and scenario loss potential. They are intended to allow the user to satisfy a critical part of the transactional due diligence requirements with respect to assessing a properties’ potential for building losses associated with earthquakes.

Probable Maximum Loss (PML) Seismic Assessment

The purpose of the proposed PML Seismic Assessment is to provide a preliminary seismic vulnerability assessment to establish a general level of seismic hazard and earthquake damage potential at the site. The PML is completed in general accordance with the ASTM E2557 - 07 Standard Practice for Probable Maximum Loss (PML) Evaluations for Earthquake Due-Diligence Assessments and ASTM E 2026-07 Standard Guide for Seismic Risk Assessment of Buildings.

The review within a SEL/SUL Seismic Assessment will consist of a seismic hazard assessment, a seismic risk analysis, and the preparation of a letter report of findings. This assessment will be completed to provide the Client with an evaluation of the structural integrity and seismic risk at the project building(s). Testing of systems or materials will not be performed as a standard with this assessment.

The PML generally identifies the seismic intensity at the site and is estimated by employing data pertaining to earthquakes that have a reasonable probability of occurring during the lifetime of the facility. The PML is the hypothetical seismic scenario most commonly used to evaluate potential earthquake losses by the insurance and mortgage lending industries. Historically, the term “PML” has been applied to a group or class of structures and is meant to represent the maximum monetary loss that will not be exceeded for 9 out of 10 structures of that class. In other words, on average only 10 percent of similar buildings will experience greater damage for the same seismic intensity. The PML damage prediction is based on construction type, geometry, quality of construction, on the geological characteristics of the site and its susceptibility to major ground motion and the soil response to a predicted ground motion, and is based on the perceived ability of the design to resist the predicted ground motion. Engineering judgment is a necessary component of this review since analytical methods do not exist that will encompass all parameters necessary to determine a precise estimate of the extent of any damage caused by a probable maximum earthquake. The process involved in developing the PML is subject to a number of estimations and projections. These typically include: the underlying soil response, the possible magnitude and duration of the earthquake, the effects of the distance to the causative fault, the type of building structure, and the quality of the structure's design and construction.

Diablo Green Consulting Inc. provides a professional opinion regarding the damage to be expected as a result of projected earthquake ground motion based on the observed building type, condition and site location. The opinion expressed in the PML is an estimate based on probability of seismic activity and the resistance of this type facility to damage from the seismic activity. The PML estimate is for the structural and major architectural elements only and does not include special features such as finishes, MEP systems and so forth, nor does in take into account associated costs from death or injury or loss of service.

The PML is calculated utilizing the industry-standard risk model developed by Messrs. Charles C. Thiel, Jr. and Theodore C. Zsutty, and published in an article entitled “Earthquake Characteristics and Damage Statistics” in 1987.