Tag Archive: building insurance policies

Commercial Property & Fire Risk – Does your insurance stack up?

James Cullen, Head of Building Surveying talks fire risk in buildings and casts doubt over the validity of building insurance policies in respect of fire safety. Commercial property owners and occupiers, take note.

As a trained Fire Risk Assessor and Chartered Building Surveyor, I am often tasked to inspect buildings as part of a building acquisition, maintenance review, defect inspection, or fire risk assessment. What I often encounter during the course of such inspections, are countless construction defects and failings in respect of fire safety and fire compartmentation.

Owners or occupiers of commercial property must complete a regular fire risk assessment of their building to comply with the Regulatory Reform (Fire Safety) Order 2005, though irrespective of legislation, this is almost always a separate building insurance requirement.

Commercial property owners/occupiers, in my experience, have in most cases completed fire risk assessments themselves in order to satisfy their obligations under the legislation and to ‘tick the box’ on their insurance application. Though in order to complete a reliable and detailed fire risk assessment, the individual must be suitably competent in both the risk assessment process and also in construction, having adequate knowledge about an array of construction components, details, structural aspects, and compartmentation measures.

The failings which I often identify should easily be noted within a fire risk assessment, conducted on a regular basis, and these issues are often serious enough to warrant attention and repair within 1-3 months. If a commercial property owner/occupier was complying with their duties under the order then these issues should have been identified and rectified promptly, though by not addressing these issues, building insurers could arguably withhold cover in the event of a fire.

What commercial property owners and occupiers must ask themselves, is could they cope not only with possible fatalities and injuries as a consequence of negligence in the event of a fire but could they also meet the cost of building repairs or reinstatement in the event their insurance was withheld and a claim rejected, given that they had not complied with fire safety legislation and their insurance requirements.

Again, we continue to see serious fire events in the UK in 2019 with examples such as the Ocado distribution centre fire which destroyed the majority of the centre which handles 4000 shopping orders a day, a figure which could no longer be upheld, raising the question as to how does a business deal with the financial loss of trade following a serious fire. Reference to the Ocado fire is not intended to scrutinise any actions or measures completed by the organisation, but simply listed to highlight the impact of a serious fire on a commercial property/business. The Barking fire in east London which destroyed 20 flats in June 2019 demonstrates again that serious fires can occur in residential property, causing extensive damage. Whilst I am not aware of the risk process for each building, one would assume a detailed and compliant fire risk assessment was in place, given the type and nature of both buildings. However, investigations will of course seek to identify this, the cause of the fire, and whether such events could have been prevented or damage minimised through careful design, compartmentation, management and use.

What remains to be the case however in my personal experience, is that across the commercial property industry, there remains a serious risk of fire in buildings through a lack of understanding and negligence. The validity of insurance policies remains questionable and whether an owner or occupier is fully insured for fire damage is out for debate.

Should you require any advice on fire safety in commercial property, contact James Cullen BSc (Hons) MRICS, Associate & Head of Building Surveying on 0191 605 3481 / 07776 683279 or click here to email James.

X