Show fire risk the door with specialist underwriting

FA NEWS: Stakeholders in the short term insurance industry need to be aware of fire risks. The broker can best serve his or her commercial clients by conducting a proper risk assessment in partnership with the best insurer for the line of risk being written. Would you agree?

Charl: The broker’s role in managing risk begins when conducting the needs analysis with the client. Without a thorough understanding of the exposures, a proper solution cannot be proposed. Etana offers a comprehensive risk management service using our state-of-the-art tool: Advanced Risk Questionnaire (ARQ). If a broker needs assistance prior to broking a risk, Etana will help identify and quantify risk, as well as provide options for risk mitigation. Risk management is a cornerstone of Etana’s business model.

FA NEWS: A number of shopping centre fires have been reported in the local press of late. How does an insurer go about writing covers for the owners of large retail centres and their tenants?

Charl: We insure the owners of many commercial properties, including retail centres and office suites. We also protect every manner of retailer and business that rents space from landlords. Risk management is important because it varies according to the type of business and an array of environmental factors. Etana Commercial and Industrial has the specialist expertise to insure against all kinds of losses, whether your client is the landlord or tenant!

FA NEWS: What process does an insurer follow after a major loss event? What role do loss adjusters play and how closely will they work with enforcement and emergency agencies?

Charl: A loss adjuster or assessor will be appointed for large claims. The assessor would liaise with the police and fire department to gather relevant information about the circumstances surrounding the loss and file these with his report. If the business can still trade we will work with the insured to determine ways to minimise ongoing interruption. If not, we determine the best way of reinstating their operation and getting them up and running as quickly as possible.

FA NEWS: Would salaries of employees be included in the Business Interruption section of the insured’s policy?

Charl: If the insured and their broker have elected to purchase Business Interruption cover, and have included wages and salaries, their staff will be paid during the course of the reinstatement. It is critical to consult with a broker to determine the best level of cover for individual circumstances and for how long a certain type of cover may be needed.

FA NEWS: Do you have any words of advice for brokers with respect to assessing and mitigating the risks associated with fire?

Charl: Prevention is better than cure! Finding and managing inception hazards, minimising fire load and reducing propagation opportunities is key. In addition, preparing for the worst is important which involves having the people training and equipment to deal with a fire should it arise. Finally, ensure the suitable insurance is in place.

FA NEWS: What would happen in the event a tenant suffers fire losses due to the landlord or property developer failing to install and maintain fire fighting equipment such as a sprinkler system?

Charl: The inclusion of a sprinkler system is voluntary unless prescribed by law and it is legally acceptable for certain buildings not to be protected by sprinklers. That said sprinkler systems remain the best form of defence when a fire arises. Sprinklers protect against the spread of fire, localising damage and extinguishing the blaze.

Obviously, preventing fire in the first place is the primary objective.