ABI Says U.K. Fires Cost Industry Nearly $3.5 Million a Day

March 9, 2006

The Association of British Insurers has calculated that fires are “burning into the profits of British businesses at a record rate.”
According to its most recent figures the cost of business fires in 2005 for the first time ever topped £2 million [$3.473 million] every day.

“During the year insurers paid out £790 million [$1.372 billion] in commercial fire claims – up 60 percent on 2004,” said the bulletin. “In addition, business interruption claims following fire damage, at £220 million [$382 million], were the highest since 1997. Insurers expect one in every hundred businesses to make a fire – related claim this year, making fire the main cost -driver for commercial property insurance.”

“Too many firms are seeing their profits literally going up in smoke”, observed Jane Milne, the ABI’s Head of Property Insurance. “Fire is increasingly putting jobs and services at risk, threatening the existence of some small businesses. The disruption caused to a firm can be devastating unless good fire safety and business continuity plans are in place. Insurers and the fire service play an important role in supporting fire prevention. But ultimately it is the responsibility of every business.”

The ABI noted, however, that “changes to fire safety legislation in October will place greater emphasis on fire prevention. Key areas where firms need to improve now are:
— Risk assessment. Firms should regularly review the potential fire risk and take steps to minimize it. For example, assess any processes involving heat and inflammable materials.
— Staff responsibility and awareness. One individual within the firm should have overall responsibility for fire management, including ensuring that staff are aware what to do in the event of a fire.
— Arson control. Arson accounts for about half of all commercial fires, so ensure that premises are secure to deter arsonists.”

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