Designation:E2557−07AnAmericanNationalStandardStandardPracticeforProbableMaximumLoss(PML)EvaluationsforEarthquakeDue-DiligenceAssessments1,2ThisstandardisissuedunderthefixeddesignationE2557;thenumberimmediatelyfollowingthedesignationindicatestheyearoforiginaladoptionor,inthecaseofrevision,theyearoflastrevision.Anumberinparenthesesindicatestheyearoflastreapproval.Asuperscriptepsilon(´)indicatesaneditorialchangesincethelastrevisionorreapproval.1.Scope1.1Thispracticeestablishesstandard-of-careforevaluationandclassificationofthefinancialrisksfromearthquakedam-agetorealestateimprovementsforuseinfinancialtransac-tions.Assuch,thispracticepermitsausertosatisfy,inpart,theirrealestatetransactiondue-diligencerequirementswithrespecttoassessingandcharacterizingaproperty’spotentiallossesfromearthquakes.Thispracticeisintendedtoaddressonlyphysicaldamagetothepropertyfromsiteandbuildingresponse.1.1.1Hazardsaddressedinthispracticeincludeearthquakegroundshaking,earthquake-causedsiteinstability,includingfaulting,subsidence,settlementlandslidesandsoilliquefaction,earthquake-causedtsunamisandseiches,andearthquake-causedfloodingfromdamordikefailures.1.1.2Earthquake-causedfiresandtoxicmaterialsreleasesarenothazardsconsideredinthispractice.1.1.3Thispracticedoesnotpurporttoprovideforthepreservationoflifesafety,orpreventionofbuildingdamageassociatedwithitsuse,orboth.1.1.3.1Thispracticedoesnotaddressrequirementsofanyfederal,state,orlocallawsandregulationsofbuildingcon-structionormaintenance.Usersarecautionedthatcurrentfederal,state,andlocallawsandregulationsmaydifferfromthoseineffectatthetimesofconstructionormodificationofthebuilding(s),orboth.1.1.3.2ThispracticedoesnotaddressthecontractualandlegalobligationsbetweenpriorandsubsequentUsersofPMLreportsorbetweenproviderswhopreparedthereportandthosewhowouldliketousesuchpriorreports.1.1.3.3Thispracticedoesnotaddressthecontractualandlegalobligationsbetweenaproviderandauser,andotherparties,ifany.1.1.4Itistheresponsibilityoftheownerofthebuilding(...
