Fire

CONSTLINESS: #3

$35,000

Frequency: #4

10%

How Fires Hurt Small Businesses

Although modern safety regulations have saved countless lives (and continue to do so), fire is still a major threat and one of the most common causes of property damage. 

A lit cigarette, a greasy grill, a burning candle, faulty wiring, chemical reactions, a lightning strike, and a thousand other sources can spark a fire. If a small flame isn’t handled quickly and correctly, a blaze can erupt and consume everything in its path.

Which Industries Are Most at Risk of Fire Damage?

Restaurants

Manufacturers

Small Business Insurance Policies that Can Help with Fire Damage

  • Commercial Property Insurance: Property Insurance is designed to provide the funds a business needs to repair or replace damaged property (e.g., equipment, buildings, supplies, and inventory). Nearly every Property Insurance policy covers fire damage.
  • Business Owner's Policy: This is a bundled insurance product available only to small businesses that includes both Commercial Property and General Liability coverage.
  • Keep fire extinguishers inspected and maintained according to the local fire code. Train employees on how to properly use them.

  • If operating a restaurant, ensure you have a UL 300-compliant wet chemical fire suppression system [PDF] and follow the NFPA 96 standard for ventilation and fire protection.

  • Regularly clean and inspect commercial cooking equipment and manufacturing equipment.

  • In offices, keep electrical appliances (e.g., microwaves, toasters, coffeemakers) away from paper or other fuel sources.

  • Keep emergency exit doors open and available. Always have ready access to two exits.

  • If in area prone to wildfires, keep trees and brush from growing next to your building.

More Details on Fire Risks for Small Businesses

If you operate a restaurant, most Commercial Property Insurance policies will require you to comply with the UL 300 and NFPA 96 standards for fire suppression. If you don’t, you may not benefit from the coverage in the event that a fire does happen. Other high-risk industries have similar restrictions, so ask your small business insurance agent about it before assuming your business is covered.

Geography and industry are the two biggest factors that affect fire risk.

Keep in mind that some businesses are at high risk of fire damage not because of what they do, but where they’re located. The American West is particularly vulnerable to wildfires in the summer due to an arid climate and dry vegetation. If your business is located in a dry or forested area, take steps to protect it. Read Colorado State University’s guide to protecting your property from wildfire for tips.

For more information on fire safety in the home or workplace, follow the National Fire Protection Association on Twitter (@NFPA) and check out its online safety tip sheets.