When it comes to fires, the best defense is prevention
By Connie Lannan

When it comes to fires, the best defense is prevention

A fire at a rental operation can be devastating. There is the initial damage as well as the monetary and emotional costs associated with the disruption of business, the possible loss of equipment and the rebuilding of the facility if the fire is extensive.

With the increased prevalence of wildfires in many areas of the country, conversations on risk mitigation and proper coverage have taken even greater urgency, say ARA Insurance Preferred Agents Chip Arenchild, vice president, InterWest Insurance Services, Sacramento, Calif., and Catalina Avila, owner, Premier Insurance Brokers, Eastlake, Colo.

“Fire safety is certainly top of mind with our clients, especially since the fires four or five years ago illustrated how a wind-driven fire can create total losses,” Arenchild says, adding that the rating agencies have changed their criteria on what could be a wildfire risk. “We are in a hard market for property insurance. We are fortunate that ARA Insurance continues to offer this and helps our insureds mitigate this problem.”

Those conversations “lead into more in-depth conversations about fire prevention, what to do to protect their building and what their game plan is to rebuild. It has given us a chance to provide some risk management and mitigation around this,” Arenchild says.

That builds on the loss-control reports ARA Insurance offers all insured clients — the annual inspection that reviews “everything from extension cords, emergency lighting and fire extinguishers to making sure emergency doors aren’t blocked and such,” Avila says.

Arenchild refers to it as going “back to the basics” because fire damage can result from many things, not just wildfires.

“We will do a walkaround and start on the surface. Are fire extinguishers being checked and marked as the law requires? If there is a sprinkler system, can the insured demonstrate they have had their annual check test? Is there a copy of those tests to prove the sprinkler system has been maintained? We will look at processes, what insureds are doing to prevent fires and how they are documenting that. We are paying attention to basics,” he says.

Arenchild encourages every operator to:

Fire-harden the building: “Make the facility less susceptible to fire — changing the siding, making sure vents don’t allow sparks to go up inside it and keeping combustible material away from the building. Ensure nothing will contribute to a fire becoming greater and mitigate your exposures,” he says.

Train staff: “Look at your processes. Would employees know what to do if there was a fire? Make those back-to-basics habits be part of their fire-prevention DNA,” he says.

Document that training: “Prove to the carrier that you are doing what you say you are doing. When the market tightens and you want the best rates, you need to have records and proof,” he says.

Use available technology and software: “Technology can help manage your risks and track it. From mobile forms to thermal scans of circuit boxes, technology gives you something to show that you are doing more than giving it lip service,” he says.

Examine correct limits of insurance: “Start by looking at the square footage of the building and what the building is made of. Understand the cost per square footage you are insuring for your building and then check that cost against local market conditions. When you talk about rebuilding your facility right now, you have all the supply chain issues. Can you get the material? Pricing will fluctuate and permitting will take longer. In a wildfire situation, we have learned there aren’t enough contractors to do the work,” he says.

Also think about replacement of business income, Arenchild says. “If you have a loss, how long will you be down, what do you have to do to get back in business and how can we build a plan that you are comfortable with to make sure you have money to stay alive?” he says, adding that if you have more than one building or location, blanket coverage can be helpful.

Connie Lannan

Connie LannanConnie Lannan

Connie Lannan is special projects editor for Rental Management. She helps plan, coordinate, write and edit ARA’s quarterly regional newsletters, In Your Region. She also researches, writes and edits news and feature articles for Rental Management, Rental Pulse, supplements, special reports and other special projects. Outside of work, she loves to bake for others, go for walks with her husband and volunteer for her church and causes she believes in.

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