In this article, Richard Forrest Smith, CEO, ECIC, takes a look at the fire risks inherent in the construction sector, the number of causes involved and how insurers can
A recent report by Construction News[i] has revealed some surprising statistics for the insurance and contracting sectors. For instance, Home Office construction fire data indicates a 43% rise in deliberately caused fires between 2015-2017. By contrast, there has been an overall decline in fires caused by construction site activities over the 2015-2017 period. Despite this, of the fires that had to be reported to the HSE, 26 in all, over half were caused by an electrical short circuit or overload.
As an insurer specialising in the mid-size contracting market, with a particular focus on the electro-technical sector, fire statistics are a potential cause for concern.
So what’s at play here? If fires are deliberate what are the root causes?
We know the contracting industry is under strain from all sides. Late payments put pressure on cashflow, skills shortages drive up labour costs, material costs are also rising and Brexit only adds to these strains. When businesses are under pressure, there may be a temptation to take short cuts on compliance processes and training, cut corners on working methods, use cheaper, lower quality materials and reduce overheads where possible – including perhaps, site security.
The different reporting regimes mean that it is difficult to obtain a universal view of construction site fire data. The GlobalFire Forum[ii] is encouraging more reporting and inspection requirements around fire risks. Currently not all smaller fires are reported to RIDDOR – the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations, leading to gaps in knowledge about how fires occur and therefore how they could be reduced.
In addition, the GlobalFire Forum has highlighted that the Joint Code of Practice on the Protection from Fire on Construction Sites and Buildings Undergoing Renovation is voluntary on projects valued under £2.5m. They fear the code and audit checklists are not being implemented during periodic and robust site inspections. The upshot is that chances to prevent, mitigate and manage the risk of construction-site fires could be being missed.
As insurance providers our job is to protect our policyholders from the risks they face. Fire risks whether deliberate or accidental all have root causes and we have a duty to help our policyholders think carefully about the short and long term consequences of a fire.
This starts with being conscious of the stresses a business may be under – brokers are our eyes and ears in this regard. Ensuring levels of competence are in place as an insurance requirement will help push up standards of practice. There’s also access to risk management support, legal advice, tax and financial advice to help support the contractor beyond insurance cover.
We need to find ways to tackle the problem of construction site fires before they escalate further. It’s not just one single solution, but a combination that will stop the lives of workers and the public being put at risk each year.