When it comes to fire damage, a staggering 44% of businesses fail to reopen in the event of a blaze, with companies not open within 10 days most likely to stay closed. With such statistics, businesses must have a plan in place for recovering in the event of a fire. From insurance and surveys to repairs and ensuring employee safety; Dakota Murphey addresses some of the most important considerations businesses must make to recover from fire damage.
No fire in the workplace is good but there are degrees to the damage they can cause. Smaller fires may be contained with good fire safety practices, while others will rage through the premises, perhaps due to combustible materials in proximity. While life safety is the primary factor in the event of a fire, in the aftermath, time is money where organisations are concerned and any downtime will be costing a company additional revenue on top of whatever has been damaged.
Implementing a disaster recovery plan before anything bad happens is a good idea. This should include what types of insurance your business needs, how or where you can operate if your building suffers damage and how to repair and replace equipment.
Image credit: FirePhoto/AlamyStock
Broadly speaking, there is no all-encompassing ‘fire damage insurance’ that companies can fall back on in the event of a disaster. Instead, a business may require a combination of insurances that cover all of their activities, buildings and equipment.
Repairing and replacing
Naturally, if it has been a serious fire, you may worry that it could be too much to recover from. Fortunately, provided that you comply with your insurance conditions, certain types of cover will help to get you back on your feet again.
Buildings insurance covers the rebuilding costs if the property, or part of it, has been destroyed. Equally, contents insurance can help businesses to recover the cost of replacing any equipment or furniture that has been damaged beyond repair.
This is particularly useful in the scenario where you aren’t the building owner, as you may still recover the value of your property while the landlord deals with the structural costs. Companies can even protect their stock from accidental damage with a separate stock protection policy that allows them to recoup the lost value of damaged items.
Business interruption insurance
The smoke from the flames won’t discriminate over what it damages and you may find you have to shut your business down until the damage has been repaired. For such a circumstance, business interruption insurance can cover the loss of income your company suffers due to a disaster like a fire or other catastrophic event.
One thing to note, regarding all ‘fire damage insurance’ is that you should read the fine print carefully. Many policies only cover damage if you follow and can prove that negligence wasn’t afoot. Additionally, things like closing fire doors and safety procedures will have to be followed to the letter to ensure your claim is valid.
That’s why it’s so important to instil stringent and comprehensive fire safety procedures in your place of work. One; for the safety of everyone concerned and two; to ensure your insurance claims can be upheld.
Assessing the damage
For a fire damage insurance claim to succeed, most covers require an assessment of the damage and the cause to be established. You, or your insurance company, may wish to hire chartered surveyors to assess the structural damage caused by the fire.
For instance, a Specific Defect Report from a chartered surveyor provides a detailed analysis of a property and is used to assist insurance claims to help find a root cause. Finding the cause of a fire is important for insurance claims but also to protect a business from any legal action. If a business is found to have been in breach of fire safety regulations it may face a fine.
The two primary areas that can prohibit your business from reopening include damage to structure and equipment, so company directors and leadership teams must have a plan for getting back on their feet.
There is also a significant threat of documentation loss, either physical or damage to company servers. Backing data up electronically, perhaps on cloud storage, ensures that this disruption is kept to a minimum.
Businesses must also take into consideration the likelihood of staff absences and morale issues in the aftermath of a fire. With staff unable to enter the premises due to damage and the risk of inhaling toxic fumes, businesses must have a contingency plan in place in the event they cannot use their premises.
Once the smoke has cleared and the dust has settled it’s time to bring in a cleaning crew to get your premises back in action. A cleanup specialist must be hired to make the working environment safe for staff and to ensure reconstruction and repairs can be carried out.
Fire damage brings the following risks to returning staff:
One of the biggest concerns is the smoke and soot damage to the building. This can be toxic to breathe and thanks to the acidic reaction when soot is in contact with the moisture from fire defences, further damage can be caused.
Not only do businesses suffer damage from the fire but also water damage to property and equipment when the flames are extinguished. There is also clear smoke and odour damage that needs to be removed from an aesthetic perspective to ensure it’s business as usual when opening back up.
Enjoy the latest fire and security news, updates and expert opinions sent straight to your inbox with IFSEC Insider's essential weekly newsletters. Subscribe today to make sure you're never left behind by the fast-evolving industry landscape.
Sign up now!
