Fires can have devastating consequences, leading to property damage, business interruption and worst case, loss of life.
Insurance
Insurance is something we all hope we will never need to call upon but in the event the worst happens is the main port of call to offer reassurance and a plan of action to get back on track.
The first point to consider regarding insurance is to ensure you have adequate insurance cover including both building and contents. In a commercial property that is let to a tenant, the buildings insurance is usually arranged by the Landlord and recharged to the tenant in situ, in line with the terms of the Lease. Contents insurance which is usally carried out by the tenant, covers anything inside the structure of the building that can be moved and isn’t a permanent fixture/fitting. Such items would include tenant stock, desks, production machinery etc.
Most often an insurance broker arranges this cover to ensure that the cover is both suitable and adequate and tendered in the insurance market. The two main parts of this for Landlords is the sums insured and the loss of rent. The former takes account of the cost of reinstatement should the property be damaged or destroyed by a fire or another insurable peril. The latter takes account of loss of rent for the Landlord whilst the building is out of use. A Lease agreement states how many years’ loss of rent should be covered, typically this is 3 years.
It is good practice to consider reinstatement cost assessments typically every 3 years and this should be undertaken by a suitable professional. This calculates the total cost of reinstating the insured premises assuming a total loss and is comprehensive including demolition, clearance, professional fees etc. In between reviews of the cost assessment, the sums insured are index linked to account for inflation.
It is also important to keep your insurer/broker updated of any changes to occupation, voids or use of the property during the term. Upon renewal ensure that the reinstatement valuation, loss of rent and tenant occupation details are all current. In respect of property that becomes vacant there are usually requirements that insurers set out within the policy to comply with, such as regular property inspections, turning off utility supplies/draining down systems and so on.
We are finding insurers are increasingly following up and asking for proof of documents such as the Fire Risk Assessment, Electrical Inspection Condition Reports (EICR) and Gas Safety Certificates not only for common areas if applicable but from individual tenants occupying under fully repairing and insuring terms.
Aside from the insurance cover, practically below is a summary of some best practices to safeguard your commercial building:-
1. Fire Risk Assessment
As is the case for all risks the starting point is to commission a comprehensive fire risk assessment. This assessment should identify potential fire hazards, including sources of ignition (heat or sparks) and flammable materials and consider the use and people who may be at risk within the building. With a multi-let building the Landlord and their agent would be responsible for common parts whilst the occupier would undertake an FRA for their own demised areas. It is important to collaborate between the two parties for a comprehensive overall assessment of risk and evacuation plan.
Any remedial actions that may need to be carried out are stated within a fire risk assessment and usually assigned an urgency rating and timescale. This could range from simple things like additional signage, zone plans etc to additional or amended detection or improved compartmentation between areas of a building.
The frequency of the review of an FRA would depend on the building and nature of occupation but these are ordinarily carried out every 2 years. There would be an annual review or a review at any time it is deemed necessary for example a material change but will be specific for the building. It’s important that the person carrying out the risk assessment is a competent person and suitably qualified to assess the risk and carry out the survey.
2. Fire Detection/Warning Systems
Install reliable fire detection and alarm systems. These systems can quickly alert occupants in case of a fire, allowing for timely evacuation. These should be regularly maintained by a qualified professional alongside suitable emergency lighting if deemed necessary which would provide adequate lighting should regular lighting fail in the event of a fire. Consideration should also be given to whether the alarm should be monitored so it links to a monitoring station. The benefits of this is that a keyholder and the fire service is then immediately informed.
3. Fire Extinguishers and Suppression Equipment
If the Fire Risk Assessment deems it necessary, ensure that fire extinguishers are strategically placed throughout the building. Regularly inspect and maintain them. Additionally, for certain environments, automatic sprinkler systems are used to suppress fires effectively.
4. Emergency Evacuation Plans and Training
Develop clear emergency evacuation plans for all occupants. Regular fire drills and weekly testing of the alarm sounders are essential to ensure that everyone knows their roles and escape routes, generally these are undertaken 6 monthly. Employees should be suitably trained on fire safety procedures and evacuation protocols.
5. Separation of Ignition Sources and Flammable Substances
Keep sources of ignition (such as heaters, electrical equipment, and lighting) separate from flammable materials (wood, paper, plastic, etc.). Proper storage of stock and supplies play a vital role in preventing accidental fires.
Maintain good housekeeping practices at all times. Avoid the buildup of rubbish that could easily catch fire. Regularly dispose of waste materials and ensure that escape routes remain unobstructed.
6. Electrical & Gas Safety
Compliance with legislation in respect of electrical safety includes conducting an EICR (Electrical Inspection Condition Report) by a qualified electrician who is a member of the NICEIC.
Portable appliances should also be periodically tested (PAT testing)
If the property is served by a Gas Supply, the gas boiler should have a service and gas safety certificate annually.
7. Fire-Resistant Building Materials/Compartmentation
Fire Risk Assessment will take account of compartmentation between particular areas and zones of the building, particularly if multi-let with common areas. Fire-resistant materials can slow down the spread of flames and minimize fire damage. Fire Doors also provide suitable compartmentation to prevent/slow down the spread of smoke and fire. These should be regularly maintained and routinely checked to ensure they are in good condition.
Summary
Fire prevention is a collective effort. By implementing these best practices and adhering with legislation, you not only ensure compliance but can significantly reduce the risk of fires, protect lives and property.
Our property management department in Cooke & Arkwright is actively involved in managing a wide range of commercial property assets from multi-let offices, industrial estates, retail parks and high street retail. We administer service charges, collect rents and ensure health and safety compliance across the portfolio.
If you own property and are looking for a managed solution, please do not hesitate to get in touch with our Director of department Philip Angell or Associate Director Ian Hyman.