It’s no secret that small business owners typically have a healthy risk appetite, but even they never mess around with fire. These are not irrational fears because a fire can cause devastating damage to a business, leading to loss of equipment, structural damage as well as loss of data, and danger to the lives and limbs of employees.

For instance, structure fires in Minnesota alone led to losses of $31 million in a single year in 2018. Did you know that 10% of all insured businesses make a fire-related claim annually? This should come as no surprise because it’s estimated that a fire breaks out in a structure every 64 seconds in the US.

To add fuel to the fire (so to speak), wildfires are also a great risk for small businesses in vulnerable areas. The largest wildfire known has caused over $1 billion in property loss, which is one of the most expensive wildfires in US history. What’s alarming is that 8 out of 10 of the most expensive wildfires have occurred in the US over the past 4 years alone.

Fire hazards that loom over small businesses

Read on to understand some of the most common causes of workplace fires and how they can be prevented by taking the right measures.

1. Electrical fires: These are common and are usually sparked by faulty electrical equipment and wiring. Another cause of electrical fires could be overloaded circuits, damaged cords, and old wiring which are seen as big risks in a workplace. The spaces that are most susceptible to these kinds of fires are server rooms or offices that have a lot of computers in general. However, even stores and FnB outlets with their haphazard storage of waste materials around poorly set extension cords are not immune to these outbreaks. The best preventive measures are to have regular inspections, replace damaged outlets, and avoid overloading of electrical strips. Hire only licensed electricians for repairs and installation, even if it means spending a little extra. Even if you do take all the measures you can, accidents still happen, and if you are a victim of an electric fire, our commercial property insurance can cover your structural damage, as well as damage to moveable assets in your business.

2. Fires caused by flammable liquids or gas: These are common in workplaces that handle flammable liquids and gasses, such as labs, manufacturing hubs, kitchens, warehouses, and so on. And it’s not just manufacturing or research labs, sometimes cleaning supplies in any workplace can also be corrosive or flammable. To prevent this kind of fire, storage of flammable materials needs to be as per standard operating procedures and must be handled responsibly, and should be kept away from heat sources, in well-ventilated spaces. It’s a no-brainer but no-smoking policies in combustible areas are a must, as is the proper training on SOPs for employees who are handling such materials. If your workplace ever suffers damages from such a fire, our Business Owners Policy will be able to cover your damages so you can bounce back to business as usual as soon as possible.

3. Fires caused due to negligence: Fires caused due to improper storing of files or flammable materials, cluttered workplaces, and accumulation of dust and debris, which can urge fires to spread even more are usually classified as fires caused due to negligence and should be avoided at all costs. Preventive measures include being organized and keeping areas dust-free as a good start, employees must also be trained on the dangers of improper storage and the fires that can be started. Standard operating procedures detailing the proper storage of waste materials should be set and enforced. But what if it still goes up in flames? We have always got your back. At Gonzalez Insurance, you can choose to get General Liability Cover and commercial property insurance which should cover all the damages as well as possible lawsuits that may arise.

4. Fires caused by faulty heating: Furnaces, space heaters, and boilers can malfunction and cause fires if not well maintained and handled. As preventive measures, there should be regular inspections and maintenance, and combustible materials should be kept safely and securely.

5. Fires from cooking areas: It’s normal for small businesses to have kitchens and break rooms, which are all susceptible to fires, especially when cooking with stoves, toasters, and ovens. To combat this, ensure habitual ventilation, safe storage, and safe cooking practices in place to prevent such fires.

Insurance covers that shield small businesses from fires.

While prevention is always better, having insurance cover in place to protect your small business from fires is imperative. All it takes is one spark to burn through everything your business may have achieved, and bouncing back from a fire can cost you thousands of dollars out of your own savings unless you have a good policy in place. Here’s an overview of what we offer and what could be right for you.

1. Commercial property insurance: This covers the building and structure of your business and protects tangible assets like inventory and movable property like furniture and equipment. This type of coverage can also extend to outdoor signage, fences, and structures as per the policy. At Gonzalez Insurance, we offer custom, flexible coverage, so you can take only what you need.

2. General liability: This policy covers all third-party damages and injuries. It protects small business owners from legal actions that third parties can take if they feel they have been harmed. For instance, in the scenario that a vendor or a client suffers some losses on your commercial property, the liabilities and medical expenses are covered. These policies are a must-have as they protect you from uncertain and sensational lawsuits. We offer custom general liability plans, and our agents are available to walk you through the policies as, being a small business, we understand the need for tailor-made policies.

3. Business interruption: This is especially important if you have to pause operations due to damages sustained in a fire. Business interruption policies are a broad cover offered by us which covers natural disasters and perils, induced fires. We offer cover for loss of revenue during the shutdown, staff wages till they can get back to work, business loan installments, taxes, and the cost of relocation to another facility. Business Interruption policy can be a lifeboat that keeps businesses afloat after facing a fire which can potentially destroy not just the structure, but also the machinery and invite a whole lot of lawsuits from 3rd parties.

4. Business owners policy (BOP): Most favored by small business owners, this is a bundle policy for small businesses that combines the three essentials into one package, it includes general liability, commercial property, and business interruption insurance. This is one of the most popular policies for small business owners as it provides the right amount of coverage at a great price. At Gonzalez Insurance can tailor make a plan that suits the unique needs of every business.

It’s always better to be safe than sorry.

At the risk of sounding like alarmists, we would like to leave you with a note of caution. 129 insurance companies operated in the city of Chicago before the Great Chicago Fire in 1871, and 81 of them offered fire insurance to their clients. Unfortunately, no one was ready for a disaster of that magnitude, and 58 companies were left to file for bankruptcy. For the few companies doing their due diligence that did survive to tell the story, we can see that history is full of lessons, and the insurance market has been through enough unprecedented times to stay prepared for disasters.

At Gonzalez Insurance we are always ahead of the curve, offering tailored solutions to small businesses, because being a small business ourselves, customer centricity is at the heart of their offerings, so you can be sure to get the best covers and the best service. Get in touch to explore the right cover for you.