By Rakesh Gupta
A fire in the workplace can adversely affect a business in many ways. First and foremost, it can cause injuries or even fatalities to staff, customers, and others. Fires can also quickly destroy a company’s facility and its contents, from equipment to inventory. Then, of course, there is lost revenue if you have to close your doors while making repairs. Although it may seem like your business is unlikely to be impacted by a fire, you never know. Something impossible to predict, like a lightning strike or faulty wiring behind a wall, can occur at any time. Consequently, everyone in your organization must understand their role in preventing workplace fires.
Putting Workplace Fire Damage in Perspective
The most recent data from the U.S. Fire Administration (USFA) indicates that 18,700 office and store fires occurred in the last reporting year (2019), resulting in $744 million in direct property damage. But if you own or operate a small business, the cost of a workplace fire doesn’t have to be in the millions to cause your company severe financial hardship.
Even a loss in the tens of thousands of dollars can be difficult to contend with, particularly in challenging economic times. Small business insurance can help cover the expenses associated with a workplace fire. However, even better than reporting a claim and being compensated is preventing fires from occurring in the first place.
Leading Causes of Workplace Fires
According to the USFA, the leading cause of workplace fires in the last reporting period was cooking (32.3%). Other common causes include electrical malfunctions (10.9%), heating issues (8.0%), other unintentional or careless actions (7.9%), and problems with appliances (7.7%). Just as concerning is the fact that those figures don’t include another 33% of workplace fires. That means the list of potential causes is likely long and probably includes entries that have never occurred to you. So, ongoing vigilance and a proactive approach to fire safety are essential.
How Your Business Can Minimize Its Fire Risk
No amount of preparation can guarantee that your business will never be affected by a fire. But taking the 10 actions below can greatly reduce the risk of a fire and related property damage and injuries.
1. Purchase and maintain a fire sprinkler system and fire extinguishers. In many instances, a sprinkler system or employees with fire extinguishers can keep a small fire from becoming a large one. Of course, you must make it clear that personal safety is more important than saving property. If a fire “gets the upper hand” in any way, everyone should evacuate immediately and leave the firefighting to first responders.
2. Check for unsafe wiring or overloaded outlets. Outdated knob-and-tube wiring exists in many buildings constructed prior to the 1930s. Insurers and mortgage lenders may require that owners replace those systems. Overtaxed outlets are another fire risk. They may continue to function properly indefinitely, but can just as easily fail and spark a fire in an instant. If you spot an
overloaded outlet, take action promptly to address it.
3. Never leave portable heating devices unattended. Any device that emits heat from food-warming equipment to space heaters can overheat. The last person to leave a room must consider it their responsibility to turn off and unplug all heating devices.
4. Keep combustibles far from flames. In the blink of an eye, a slight breeze can carry a scrap of paper or other combustible items onto a stove or into contact with some other ignition source like a dining table candle. That same breeze can then bring the burning paper into contact with other combustibles, creating the conditions for a workplace fire to develop.
5. Store and use chemicals safely. Failing to understand how different chemicals interact and follow the instructions for their use and storage creates a serious fire and explosion hazard.
6. Keep equipment in good working order. Devices should be clean, dry, well-ventilated, and operating as designed. To ensure your business, you may be required to show that you have a service contract for things like cooking hoods and exhaust ducts, and that service has been performed according to the agreed-up schedule—often twice yearly.
7. Identify and educate staff and customers about escape routes. People are much less likely to suffer injuries in an emergency if they know how to exit a building in an efficient and orderly manner.
8. Ensure that exit routes are clear of obstacles. Items that people might easily navigate around under good conditions can be dangerous roadblocks when a blaring fire alarm is elevating everyone’s blood pressure, smoke is obscuring escape paths, etc. Declutter exit areas and ensure doors, windows, and screens function as designed.
9. Make fire safety training part of your employee onboarding process. Each time you hire someone, explain your fire safety plan to them and point out the fire exits in your facility.
10. Create a fire safety plan with defined roles and responsibilities. From regular fire preparedness inspections to ensuring everyone has made it out of the building, each team member should know what is expected of them and how to respond in an emergency. And while it may elicit some groans, you should regularly review the fire safety plan and your escape routes with your team.
Reducing Your Financial Risk From Workplace Fires
The actions above are crucial to reducing the risk of a fire at your place of business. However, even the most fire-conscious company can be affected by an incident that nobody could have predicted. And after your team or first responders extinguish a fire, the financial ramifications can continue to smolder. Fortunately, having adequate small business insurance—including coverage for your building and assets in a business owner’s policy (BOP)—can protect you. That policy can be the difference between your business rallying quickly and being forced to cease operations permanently. Just be sure any fire prevention or mitigation measures you have noted in obtaining your insurance are functional at all times. If they aren’t, and your business suffers fire damage, your coverage may be affected.
Rakesh Gupta is chief operating officer at biBERK, part of Warren Buffett’s Berkshire Hathaway company. biBERK specializes in commercial insurance for small businesses. In his role, Gupta focuses on simplifying the insurance buying experience using technology and process innovations that make it easier for small business owners to get the coverage they need.