A well-maintained fire sprinkler system is essential for almost any type of business. These fire prevention systems protect lives and prevent serious property damage, and they can also help reduce commercial fire insurance policy premiums. For business owners, understanding how and why fire sprinkler systems are important from an insurance standpoint can help you save a significant amount of money.
Not only that, it’s also important to understand why the condition of your fire sprinkler system can influence your payout standing in the event of a fire-related insurance claim. This article will explore the relationship between fire sprinkler systems and commercial property fire insurance.
We’ll also cover the legal requirements of these systems in Canada. To help you mitigate other unnecessary and substantial costs, we will also introduce the Shutgun Fire Sprinkler Shut-Off Tool, an invaluable device for preventing water damage resulting from fire sprinkler issues.
So, let’s get started!
The Relationship Between Fire Sprinkler Systems and Insurance Premiums
Given that fire sprinklers are among the most effective and reliable fire prevention and suppression systems, it makes sense that insurance companies consider them incredibly important when making risk assessments about a business they insure.
These automated systems are capable of greatly reducing the potential damages caused by a fire and provide year-round, 24/7 protection. Even when the commercial property is unoccupied, a well-maintained fire sprinkler system can contain and suppress fires before they can spread and cause serious damage.
Risk Mitigation and the Impact on Insurance Premiums
As you are probably aware, the higher the risk a business has of suffering fire damages, the higher that business’s commercial fire insurance premiums will be. A suitable and well-maintained fire sprinkler system can reduce that risk in the following ways:
1. Containing and Suppressing Fires Early
Since fire sprinkler systems are automatically activated when exposed to high temperatures that indicate the presence of a fire, they can greatly reduce the extent of fire damage. Reducing potential claims is incredibly important for insurance providers that would otherwise need to pay out funds to compensate the insured client for these damages.
To reward companies that have adequate fire protection and keep their fire sprinkler system in good working order, it only makes sense that insurance providers would reward them with reduced premiums.
Even if the fire sprinkler system cannot extinguish the fire completely, it will help to contain it, which can buy fire responders much-needed time to arrive on the scene. Again, this reduces the likelihood of costly damages to the building and the property held within it.
2. Protecting Lives
Fire sprinkler systems protect the building and its valuable contents and greatly reduce the risk fires pose to human lives. Reducing the risk of fire-related injuries and fatalities is incredibly important for comprehensive commercial fire insurance policies. Commercial insurance providers need to measure the risk of potential payouts to employees, clients, customers, supplies, and just about anyone visiting the commercial property.
Insurance providers need to consider the risk of needing to deliver payouts to injured personnel or, even worse, their families in the event of a tragic fatality. This explains why they weigh fire safety systems and equipment so acutely when calculating premiums for a potential client.
3. Decreasing Business Interruptions
By minimizing the scale of fire-related damages, fire sprinkler systems also reduce the downtime businesses need to resume regular operations. Given that a loss of business due to fire damages could result in an insurance claim, insurance policy providers also evaluate this when calculating the risks associated with insuring a client.
An effective fire sprinkler system lowers payout amounts, reducing risk and lowering insurance costs.
Fire Sprinkler Maintenance and Insurance Claims
Having a fire sprinkler system that provides the correct amount of coverage for the building is essential, but it is also important to ensure the system receives maintenance at regular intervals.
In the event of a fire insurance claim, insurers typically require claimants to provide documentation proving that all fire prevention systems were inspected and serviced. Routine fire sprinkler inspections, functional tests, and timely repairs and replacements can all significantly impact insurance claims.
Not only can this type of documentation help reduce premiums, but providing it when requested can also lead to a smoother and faster claims process. If your business suffers serious fire damage, clearly demonstrating that your fire sprinkler system was well-maintained and fully functional at the time of the fire can help ensure that your claim is settled in your favor.
Rather than deal with the financial headache of a back-and-forth battle with your insurance provider over your fire coverage, you can get your payout and make the necessary repairs to get your business up and running as quickly as possible.
What About Water Damage?
While fire sprinkler systems offer vital fire protection, they are susceptible to accidental activations, misfires, leaks, and impact-related damage. These issues can lead to significant water damage to the building and the inventory and equipment held within it.
Even though water damage and business interruption insurance can help to mitigate the impact of water damage, coverage varies according to your policy. Even with coverage, the fact that a single sprinkler head can release as much as 60 gallons of water per minute means these accidents can be incredibly expensive and disruptive.
Fortunately, there is a simple and affordable solution to this risk—introducing the Shutgun! With the Shutgun, you can quickly and easily deactivate a running sprinkler head. Rather than waiting for the fire department or qualified maintenance personnel to shut off the fire sprinkler for you, this handheld tool allows you to do it yourself, even from a ladder.
It is highly recommended that you keep a Shutgun with every fire extinguisher to ensure easy access in the event of an issue. Building a Custom Shutgun Case allows you to have the exact number and type of Shutgun tools for your property’s needs.
Using Shutgun Wall Mounts helps ensure they are always visible and accessible. To learn more about how effective the Shutgun Fire Sprinkler Shut-Off Tool can be, we recommend reading real-life case studies and reviews.
Check out our product page and protect your commercial property from costly water damage:
Final Words
First and foremost, you should ensure that your commercial property is protected by a well-maintained fire sprinkler system for safety. They can also lower commercial fire insurance premiums and ensure that your business meets all of the relevant legal requirements, which is an added reason to keep your fire sprinkler system in good working order.
Commit to maintaining your fire sprinkler system and equipping your property with the Shutgun. The peace of mind and insurance coverage benefits are well worth it.