Commercial insurance article archive
Fire and floods - how to manage the risks
Going up in smoke? A third of all businesses do not carry out basic fire risk assessments
Fires in business premises continue to cost nearly £1bn a year and the trend is towards less incidents but when a fire occurs it causes far more damage. The reduction in numbers is because of improved construction in buildings and a better awareness and management of risks. The higher cost is because of more concentration of values and fire brigades’ understandable emphasis on protecting lives rather than property.
A major fire is a disaster for a business and many companies never recover. Even if well insured, it is an uphill struggle to rebuild the premises, and retain and rebuild its customer base. It is always better to prevent an event in the first place.
The Framework for prevention is covered in the Regulatory Reform Fire Safety Order (RRFSO) 2005 which came into effect in October 2006. This is the bible for fire safety together with insurers and brokers providing individual advice. However a recent survey suggested that 78% of fire safety professionals were unsure about the regulations and over a third of all UK businesses have failed to carry the crucial risk assessment. This failure can leave businesses not only open to prosecution but also putting into jeopardy the lives of staff as well as business property.
Risk assessments are required for any premise where 5 or more people are employed or where an enforcing authority requires it.
It must be carried out by a responsible person who takes corporate responsibility for it. This person is normally someone who owns or has control over the business or premises. This person can appoint a competent person to assist. This can be an employee or outside body. We can introduce you to someone if needed.
The tasks of a responsible person are to:
- Assess the risks of fire
- Consider who may be especially at risk
- Take steps to reduce or remove these risks
- Satisfy specific requirements such as - adequate means of escape, appropriate signs etc
- Take steps to ensure any plant or substance on the premises are safe
- Carry out effective planning etc of fire safety arrangements
- Provide relevant information to all occupants and visitors
- Co-operate with others sharing the premises
- Provide fire safety training
- Appoint competent persons to help comply with conditions of the order
The repercussions of not complying with the order can be disastrous, In most case its requirements make good business sense and are far less cumbersome that the old regime of strict controls and rules. It would be wise to ensure that your business is not one of the third who have done nothing.
Any business who would like help in carrying out an assessment should contact Stride Limited as we are able to provide you with full information and, in many cases, practical help.
Beware of Floods! Consider the risk of flooding before moving or buying property
The insurance industry is still lobbying the government hard to spend more money on flood defences but so far what has been offered falls far short of what is felt necessary to prevent further large scale flooding in the future. Climate change, continued building on flood plains and the concreting etc of land are all adding to the risk and any solution, even if agreed, will take years to have an impact. Insurers are therefore becoming increasingly careful in insuring businesses which are felt to be at risk of flooding taking the view that insurance cannot provide a solution if the government does not do its fair share of investing in flood prevention for the future. This impasse is resulting in more and more businesses that are at special risk being unable to obtain insurance or have to take an increasing share of the risk themselves.
Stride Limited will always do our utmost to get the best cover available and for those where this is just not possible provide advice on how to reduce the risks. However, it would make good business sense to consult us if you are moving premises or opening up a new operation to make sure that no insurance problems exist. It is likely to become more and more difficult to sell a business in a high flood risk area apart from being uninsurable. It is better to be sure of the situation before making any commitment.
02 Mar 2008