How to Protect Your Business from Fire

Why You Should Protect Your Business from Fire

Emergencies happen. That’s why commercial insurance exists – to protect your investments in structures, inventory and technology from the peril of fire and related perils like smoke damage.

Fire is one of the most common causes of property damage for business owners. More than 40% of small businesses will experience a fire incident in the next ten years.

Still, it’s always better to prevent a fire from happening than attempt to mitigate the damage as it occurs, or call in a claim to your insurer after the incident.

Here, we’ll cover proven fire prevention tips for commercial, office and industrial space. We’ll also cover fire mitigation and debris cleanup related to business owner’s insurance policies (BOPs) and commercial insurance.

First, let’s consider some fire statistics in the United States.

US Commercial Fire Statistics

The US Fire Administration (USFA) – a division of the Federal Emergency Management Agency (FEMA) – collects data and provides information and analyses on fire problems in the US.

• Roughly 30% of non-residential fires are caused by cooking.
• 5% of them are caused by general carelessness.
• 8% of non-residential fires are intentionally set by arsons.
• Only 7.8% of them result from electrical malfunctions.

Historically in the US, residential fires are far more likely to cause fatalities – about 30% of fire-related fatalities happen in a home.

Still, commercial fires are quite deadly. They cause 9% of all fire-related deaths in the US. Fire is the number one cause of all workplace deaths. According to the report from Occupational Safety and Health Administration (OSHA), workplace fires / explosions kill 200 employees and injure 5,000 more every year.

Beyond the risks to life and limb, fires cause tremendous damage to buildings, machinery and stock.

Commercial Fire Losses

The toll on human lives aside, a fire can quickly become the most costly incident a business will experience. Between damage to the structure and its contents, the interruption of business as usual, and the costs to remove debris and clean the property, the losses associated with fires are staggering.

• Fire / explosion is the top cause of loss to US businesses, causing 22% of all business losses.
• Fires cost US businesses more than $2.3 billion in property damage annually.

Now that we’ve addressed the severity of fires, let’s talk about ways to prevent fire at your place of business.

Fire Prevention Tips for Businesses

Follow these proven fire prevention tips for businesses.

1. Train Your Staff Thoroughly

While most common in the foodservice and construction sectors, workplace fires pose a risk across all US industries. Fire safety training is essential for all employees.

OSHA says employers across all sectors should focus their fire safety training on:

• Fire extinguishers – staff should know the location of fire extinguishers, and employers should be sure they’re charged and well maintained.
• Exits and evacuation routes should be discussed and outlined on paper. Make sure to provide this information in multiple languages if your crew speaks English as a second language.

Remember, many individuals have never operated a fire extinguisher. Provide them with hands-on fire extinguisher experience, so they’ll know what to do should the occasion arise.

2. Delegate Fire Prevention

The safety of personnel, customers and products should always be a high priority in your corporate culture.

Every organization is unique, but consider tasking an individual, or an entire team, with regular fire safety protocols like fire extinguisher / fire alarm maintenance and fire safety training topics.

Ensure that management understands your focus on fire safety. Encourage them to provide public “pats on the back” for fire-safe behaviors.

3. Install Sprinklers or Fire Suppression Systems

Fire alarms are crucial. Consider installing a sprinkler system or fire suppression system as well. They may be required by your local municipal government or your commercial property insurance provider. Both systems help extinguish or control fires before the fire department arrives.

• Most restaurant insurance providers require a UL 300-compliant wet chemical fire suppression system and follow the NFPA 96 standard for ventilation and fire protection.

4. Reduce Clutter & Remove Combustibles Inside

Remove cardboard boxes, stacks of paper, combustible chemicals and rags every day, or more often as needed.

Electrical appliances (even the office coffee maker or fax machine) always present fire risks. Place trash cans far away from them, and inspect cords, plugs and outlets regularly.

Ensure that servers, computers and other running equipment have plenty of space for air to circulate, which will keep them cooler and reduce your fire risks.

5. Landscape Carefully & Maintain “Defensible” Space Outdoors

Some organizations face increased fire risks due to their location. If your business is located in a dry or forested area or an area prone to brush fires, remove any trees, grasses and brush within 100 feet of your building. Remove low hanging tree limbs and ensure plenty of space between landscaped shrubbery, vertically and horizontally.

In other words, realize that fire burns upwards, and that heat and sparks travel up too. When aflame, a three-foot shrub can easily cast sparks ten or fifteen feet above it.

Now that we’ve covered physical ways to protect your business from fire let’s outline how commercial insurance can protect your business from the perils of fire.

Commercial Insurance & Business Owners Policies Protect Your Business from Fire

Commercial Insurance Policies protect a commercial structure and its contents from the peril of fire and smoke damage. It covers things like inventory, technology, office furniture and expensive security systems – always up to policy limits, of course.

• Commercial fire insurance will also cover damage caused by smoke (even if the fire didn’t happen at your business) and debris removal and cleanup – within the limits defined by the policy.
• This is important, because fires don’t leave a tidy pile of ash behind. The destruction can be massive and hazardous – and therefore very expensive to remove.

Business Owner’s Policies (BOPs) bundle the commercial insurance coverage above with other key features like liability coverage, advertising liability, wage replacement for employees and business interruption coverages.

Of course, every policy is a unique contract between an insurer and insured, and there are some minor differences from state to state. If you’d like to learn more about fire insurance to protect your business, you should speak with a licensed insurance agent.