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Facilities Management & Fire Safety – Business Continuity Insurance – Part 20

September 26, 2019 8:56 am

In LWF’s blog series for those working in Facilities Management, or who have an interest in or responsibility for fire safety, we have been looking at business continuity insurance and its impact on fire protection issues. In part 19 of this series, it was ascertained that it was not enough to simply replicate the current requirements of a business in a plan to protect an organisation against business interruption due to a fire, but rather, planning should incorporate discussions with relevant personnel such as production staff, marketing management and financial teams to ensure that the provisions made reflect the current and future needs of the company.

In part 20, we continue from that point in considering the elements required in compiling a fire protection strategy to avoid business interruption from fire.

A visual inspection of a building or organisation can only tell you so much about the current operations and would be of little assistance when determining a fire protection strategy. As a computer once took up several rooms to exhibit a fraction of the processing power now contained in a smart phone, and equally, a piece of equipment which might have cost tens of thousands of pounds might now be obtained for hundreds of pounds (or in some instances, vice versa) it would be pointless to simply assume a like-for-like replacement facility would be the most appropriate course of action.

Equally, the loss of a large data facility housing millions of pounds worth of equipment would be disastrous, however, the equipment would be covered by a buildings and contents fire insurance. Business continuity insurance is concerned with the consequential losses suffered by the company due to down time. Therefore, if the facility operates ‘back to back’ with another location, the business process is not lost, the company can continue to operate and the business continuity concern would be in finding a suitable back-up facility in the interim.

Equally, a company operating a small plant room containing only a few thousand pounds worth of equipment might not seem especially important when undertaking a fire safety audit, which is mainly concerned with life protection. However, from a business continuity point of view, the entire operation of the business may be reliant on the equipment remaining functional.

While we have considered the subject of business continuity mainly in terms of industrial organisations, either with a manufactured product or those who store the ‘business’ of the organisation on computer equipment, it should be borne in mind that business continuity contingencies apply to those organisations offering a service, such as hospitals and patient care facilities. Such organisations rely entirely on information contained within patient records and with being able to use equipment and facilities such as scanners and operating theatres.

In the case of hotels and residential care facilities, the re-housing of residents is the prime consideration and the potential for consequential loss might be best off-set by contingency plans such as a mutual arrangement with a similar facility.

Where business contingency plans are not practical or even with the best contingency plans in place, consequential losses would still be incurred, it may be that increased standards of fire protection are warranted.

In part 21 of this series, LWF will consider how organisations should look to mitigate the potential effect on the environment from a fire. In the meantime, if you have any queries about your own facilities or wish to discuss this blog series, please contact LWF on Freephone 0800 410 1130.

Lawrence Webster Forrest is a fire engineering consultancy based in Surrey with over 25 years’ experience, which provides a wide range of consultancy services to professionals involved in the design, development and construction and operation of buildings.

While care has been taken to ensure that information contained in LWF’s publications is true and correct at the time of publication, changes in circumstances after the time of publication may impact on the accuracy of this information.

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