London, UK – Fire risks continue to pose a significant threat to businesses, often leading to interruptions in operations and supply chain disruptions. According to a recent survey, conducted by Allianz Risk Barometer, business owners ranked fire as the third top cause of business interruption, following cyber incidents and natural catastrophes. The survey also revealed that fire has been responsible for more than a third of the BI insurance claims over the past five years, amounting to over $1.3 billion in losses.
Alberto Barani, a Business Interruption Group Leader at Allianz Commercial, emphasized the impact of fire and explosion incidents on businesses, particularly in sectors dealing with highly flammable and explosive materials, such as pharmaceutical and chemical industries. Barani stated that damaged plants can take years to rebuild and resume full production capacity, highlighting the longer recovery period associated with fire incidents.
Moreover, with the increasing use of lithium-ion batteries and electrification, the risk of fire has escalated due to inadequate handling and transportation of these batteries. Several large fire incidents, both at sea and on land, have been linked to the mishandling of lithium-ion batteries in recent years.
To mitigate the risks associated with fire incidents, businesses are advised to regularly assess and update fire mitigation practices, including preventative measures, fire extinguishing methods, and contingency planning. This proactive approach is essential for businesses to minimize the impact of potential fire-related losses.
The findings from the survey and analysis conducted by Allianz Commercial underscore the importance for businesses to prioritize fire risk management and implement robust strategies to ensure continuity in operations and safeguard against supply chain disruptions. As the threat of fire incidents persists, effective risk management and preparedness are crucial for businesses to mitigate the potential impact on their operations and financial stability.