Fire Safety: Your Firewall in a Hard Market

Fire Safety: Your Firewall in a Hard Market


In today’s challenging insurance market, it’s essential to do everything you can to secure the best insurance rates. Safeguarding your commercial property from fire hazards should be a top priority. Implementing fire safety measures will reduce risks and improve insurance premiums. Review the following sections and make sure you are paying attention to everything applicable to your operations.

1. Regular Inspections and Thorough Housekeeping

Schedule regular building inspections to address potential risks. Check for electrical issues, fire hazards, and any housekeeping issues. Keep workspaces clutter-free to minimize fire hazards. If your insurer sends out a risk control consultant to make an assessment, poor housekeeping is a huge red flag.

2. Maintain Sprinkler Systems and Extinguishers

A properly maintained and fully operational sprinkler system can greatly slow fire and minimize property damage. Annual inspections—at a minimum—are essential to ensure its functionality. Maintain documentation and share it with your insurance provider. Properties with a sprinkler system pay a significantly lower property rate. Be aware that failing to maintain the sprinkler system could mean your insurer rates your property as if there is no sprinkler system! Meaning you pay higher rates.

Don’t forget about your fire extinguishers. Ensure you have the appropriate number and that they are tagged, hung, and inspected by a 3rd party annually. If you need assistance, contact a local fire inspection company. They can advise you on the number required and address any maintenance issues.

Companies engaged in commercial cooking and spray-painting operations must arrange semi-annual inspections of their specialized fire extinguishing systems.

3 Safe Storage: Flammable Liquids and Oily Rags

Store flammable liquids in UL-listed cabinets or fire rooms that conform to NFPA 30. Proper storage significantly lowers your fire risk. The fumes from oil-soaked rags (a common and often overlooked hazard) can sometimes cause spontaneous combustion. Oily rags should be discarded in metal containers with self-closing lids.

4 Take Precautions: Welding and Compressed Gases

Perform welding in designated areas or under a hot work permit. This strategy helps to limit the fire risk associated with welding. Store compressed gas bottles upright, securely, and with caps on. Maintain a distance of at least 20 feet between welding gases and oxygen cylinders. Keep propane cylinders outside in locked metal cages. Protect above-ground fuel tanks from vehicular damage using bollards or concrete and metal posts.

5 Understand Your Building’s Construction Classification

An often-misunderstood aspect of property insurance rates is the construction classifications. Ask your agent to verify your building is rated correctly. A building that is not classified correctly could be costing you.

Metal building classifications are widely misunderstood. Some are metal-on-metal and are properly classified as “metal buildings.” Others are metal on wood and are rated as frame buildings. If a metal-on-metal building has an interior wood paneling (or other combustible material), it could and should be classified as a “frame” building. This fact will raise your rates. If you’re in this situation, consider removing the interior finish. Then request your building be re-rated—it could lead to significant insurance savings.

6 Lighting, Drills, and Extinguisher Training

Emergency lighting, exit signs, and regular fire drills can ensure a safe evacuation. Train employees to use fire extinguishers. Review the PASS technique: Pull, Aim, Squeeze, Sweep. Personnel trained in the use of fire extinguishers can mean limiting or avoiding a significant fire insurance claim.

7 Fire Alarms

Investing in a monitored fire alarm system can positively impact your insurance rates. Alternatively, a local alarm could suffice if an employee is on-site 24/7. Either way, ensure your insurance company knows what you have in place.

8 Pre-planning with your Local Fire Department

Involve your local FD in your fire safety plans. Most departments will walk through your facility at no charge. Provide them with a diagram showing entrances/exits, flammable liquid storage, welding areas, and any other areas with fire hazards. They will look to ensure there are no issues with fire truck access to the property. Their recommendations can ensure the safety of your employees and first responders. In addition, their advice can reduce the potential property damage.

9 Keep Your Insurer in the Loop

Communicate your risk management efforts with your insurer. Provide documentation of your proactive measures during the quoting or renewal process.

In conclusion, proactive risk control measures can preserve lives and property. Also, they play a significant role in securing and maintaining competitive property insurance rates. Your prevention efforts are the key to weathering the hard insurance market. Get going.