An insurance provider specialising in rural businesses has urged company bosses to prioritise fire safety, warning that most firms that experience a serious incident never recover and fail within 18 months.
NFU Mutual paid out £43 million for commercial fire claims in 2012. The average claim for a commercial fire was £26,472. Topping the list of claims with identified causes were fires caused by arson, electrical faults, electrical equipment and fire in commercial vehicles.
The outbreak of fire is argued to be one of the biggest risks to any business. Building the business back up in the wake of a fire can take years, not months, but according to NFU, too many owners neglect to consider how their business would continue to function while its premises were being repairs or rebuilt and new stock and machinery purchased.
"Research suggests that 80% of businesses that suffer a major incident such as a fire fail within 18 months," said Georgina Farndon, NFU Mutual's commercial development manager.
"Firms need to have a business continuity plan and know how to deal with what happens after a fire. Many are simply not equipped to survive after a major catastrophe. It's not just physical assets, such as premises and equipment, which are at risk from fire; the loss of data can be equally devastating for a business."
Under the Regulatory Reform (Fire Safety) Order 2005, companies have a legal obligation to carry out an assessment of the fire risk within their premises along with the precautions they must have in place. This includes:
- Identifying the fire hazards, such as sources of ignition, flammable materials, and hazardous processes.
- Identifying the people at risk, whether because of where they work within the premises or because of what they do.
- Removing or reducing the risk where possible, by controlling sources of ignition and fuel, and reviewing fire detection and fire-fighting systems.
- Preparing and testing an emergency plan, reviewing the means of escape including emergency lighting, and the testing of fire precautions and fire safety training.