By: Jodi Balido, PE, CFPS, Senior Life Safety Engineer
When it comes to risk management and loss control, the damage to a facility due to a fire event can have a negative impact on the Owner and the Owner’s business. A loss due to fire can come in various forms, such as lightning strike, hot work gone wrong, electrical panel fire, process equipment malfunction, combustible gas release, or ignitable fluid spill. Not having the proper protection systems in place can hurt the Owner’s business in terms of actual equipment losses, stop in production, operational downtime, stained reputation, bad publicity, federal fines, and even personnel injuries and fatalities.
To deal with these fire risks, Owners often look to insurance companies for help. By transferring the cost of the risk to an insurance company, the Owner is actually opening a door to the insurance company to come in, evaluate their facility, and start mandating certain requirements in order to draw up the premiums and coverages for certain types of losses. Insurance companies have an internal team of loss control consultants with several years of combined experience, presence in the fire protection industry, and knowledge of fire protection and loss control standards and guidelines.
For Owners that don’t have an internal risk management and loss control department, this can be a great service. Even with this service, Owners should be aware that the insurance company shifts the burden of protection to the Owner. To supplement the support from insurance loss control consultants, Owners should look to seeking additional help from a type of professional engineer who eats, sleeps, and breaths fire protection, which would be a Fire Protection / Life Safety Engineer. A licensed professional Fire Protection / Life Safety Engineer has thorough knowledge of fire protection codes and standards, fire protection equipment manufacturer guidelines, and fire protection design and construction practices, which can prove to be very valuable when dealing with risks and trying to prevents losses.
These are the top 5 reasons why Owners should consult a Fire Protection / Life Safety Engineer for risk management and loss control:
- A Fire Protection / Life Safety Engineer can provide a deeper level of attention
The portfolio of properties handled by an insurance company can be quite extensive, covering a huge breadth of facility types from commercial buildings, manufacturing plants, power generation stations, industrial facilities, and so on. Owners can feel comfortable knowing their insurance company is experienced with their particular facility. However, with such a large portfolio of sites to constantly evaluate, insurance companies may just take a high-level look at a site or only identify a few areas of their own interest. There is possibility of not having the up-close-and-personal attention a facility needs to be fully protected against risks due to fire. A Fire Protection / Life Safety Engineer can provide that deeper level of attention to really evaluate the facility thoroughly. Treating an Owner’s site as a project, a Fire Protection / Life Safety Engineer will dig down to understand all the details to ensure the Owner ends up with a system and strategy that will preserve the livelihood and safety of personnel and equipment.
- A Fire Protection / Life Safety Engineer can be readily available for a visit
With such a large portfolio, insurance companies will put an Owner’s facility on a schedule of inspection visits, which means a site will most likely be visited once in a year or maybe once every few years depending on the particular insurance inspection program. At a minimum, this is good so the insurance company can see the site and provide their evaluation of risks and recommendations for risk mitigation. However, this is not so good if an Owner needs support in between inspection visits, such as a fire protection system performance issue or planning for a fire protection system improvement project. Some issues need to be dealt with immediately, and an Owner can reach out to a Fire Protection / Life Safety Engineer that is readily available to visit with an Owner whenever such loss control issues arise. A Fire Protection / Life Safety Engineer’s usual project duties require regular site visits, so a visit with an Owner at their facility would a regular day for a Fire Protection / Life Safety Engineer.
- A Fire Protection / Life Safety Engineer knows code requirements
Keeping a database of inspection records and being present and industry conferences allows an insurance company to detect and learn of the different trends of asset losses. The insurance company will then push certain requirements and recommend certain upgrades to prevent the trending loss event from happening to a particular facility. This is beneficial as an Owner will be made aware of a lesson learned that didn’t happen to their particular facility. An Owner needs to evaluate their own facility and operations to determine the likelihood of such an event happening to their facility. Many factors affect the likelihood of a loss event occurring, such as facility cleanliness, personnel procedures, maintenance routine, and existing fire protection and safety systems. What happened to one site might not be a reasonable occurrence at another. A Fire Protection / Life Safety Engineer can help to determine whether or not an industry trend is applicable to an Owner’s facility. Further, a Fire Protection / Life Safety Engineer can utilize code requirements to determine the appropriate course of action an Owner should take for a particular issue.
- A Fire Protection / Life Safety Engineer is a fire protection consultant and designer
Insurance risk inspections are a useful tool for Owners as these inspections serve as a “health check” of a facility and will receive feedback on how their site is being run and if there are any recommendations to reduce risk. The insurance companies are great at identifying issues and providing code references or industry precedence to support their findings. Correcting an issue of deficiency may require an existing fire protection or safety system to be repaired, upgraded, or even replaced. Such modifications can be “easier said than done” which may have a significant impact in terms of cost and interruption to an existing process. Insurance companies will recommend changes, and a Fire Protection / Life Safety Engineer can work with an Owner to plan the design, budget, and schedule a risk improvement project. Even further, a Fire Protection / Life Safety Engineer can also develop the design and produce actual drawings to help an Owner bid out and award a project.
- A Fire Protection / Life Safety Engineer considers an Owner’s best interests
Insurance companies are in the business to protect an Owner’s assets, help them manage their risks, and provide the monetary support needed in the event of a loss. An Owner needs to understand that the insurance company is also a business, and like all businesses that serve clients, insurance companies must balance the interests of their clients with their own interests to protect capital and increase profits. The insurance company will in truth provide the coverage and require the risk mitigation systems to insurance and protect an Owner’s facility. The insurance company will insure what they are comfortable with, and they will require what they feel is necessary for the particular insurance policy and coverage. Sometimes, this can provide an Owner’s facility with the bare minimum for protection against fire risks. However, an Owner may need more protection based on their own company’s business goals and contractual obligations which would exceed the minimum levels of protection that an insurance company is placing onto the Owner. A Fire Protection / Life Safety Engineer can help an Owner determine the additional risk mitigation measures needed to keep an Owner’s business running and remain profitable.
Insurance companies are a necessary and valuable resource in the world of risk management and loss control, but Owners that team directly with a Fire Protection / Life Safety Engineer for risk management and loss control consulting can receive a more face-to-face and hands-on type of fire protection engineering support needed to fully mitigate and address risks.