80% of businesses fail within 18 months of a major incident

NFU Mutual paid out £43 million for commercial fire claims in 2012

  • Average claim for a commercial fire was £26,472
  • Homes and businesses in rural areas wait, on average, three minutes longer for the fire brigade to arrive*

NFU Mutual, the UK’s leading rural insurer is urging business owners to make fire safety a priority after it revealed that it paid out over £43 million in claims for commercial fires in 2012.

Topping the list of claims with identified causes were fires caused by arson, electrical faults, electrical equipment and fires in commercial vehicles.

Commenting on the issue, Georgina Farndon, Commercial Development Manager at NFU Mutual said: “Research suggests that 80% of businesses that suffer a major incident such as a fire fail within 18 months. 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.”

Local authority fire and rescue services attended 102,000 fires in England between April and September 2013, and, according to a recent report by the Department for Communities and Local Government, businesses in predominantly rural areas will have to wait, on average, three minutes longer for the fire brigade to arrive than their urban counterparts.

The outbreak of fire is arguably one of the biggest risks to any business and re-building a business after a major fire can take months, if not years. In addition to the damage to physical assets, many business owners neglect to consider how the business might continue to function whilst premises are repaired or rebuilt and new stock and machinery are purchased.

In addition to fire, recent floods and storms have also hit many businesses hard and the correct insurance can help mitigate an interruption to trading and help a business to remain viable whilst it recovers from a major disaster.

Business Interruption insurance will cover a business for any periods when it cannot trade as normal because of an event resulting in damage to property on the premises, such as fire, flooding or an essential piece of equipment breaking down.

Business Interruption insurance will pay an amount to cover the shortfall in pre-tax profits and pays any increased costs of running the business as a result of the event (for example, the extra accountancy fees you may have to pay).

Reducing the risk of fire

You are legally required to carry out an assessment of the risk of fire within your premises and the precautions you have in place, under the Regulatory Reform (Fire Safety) Order 2005. To do this, you need to:

• Identify the fire hazards, such as sources of ignition, flammable materials, and         hazardous processes;

• Identify the people at risk, whether because of where they work within the premises or because of what they do;

• Remove or reduce the risk where possible, by controlling sources of ignition and fuel, and reviewing fire detection and fire-fighting systems;

• Prepare and test an emergency plan, reviewing the means of escape including emergency lighting, and the testing of fire precautions and fire safety training.


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