Insurers Lobbying To Make Fire Sprinklers Compulsory

21/04/2017

The Association of British Insurers (ABI) has called for the law to be changed to make sprinklers compulsory in all new warehouses.

Currently, guidance from the Department for Communities and Local Government recommends sprinklers be fitted in warehouses of more than 20,000 square metres.  It is estimated that only 20% of warehouses between 2,000 and 10,000m2 are fitted with fire sprinklers.  This compares sharply with other EU countries such as France and Holland, where sprinklers must be installed in warehouses as small as 3,000 square metres.

In 2016, individual insurance claims for warehouse fires topped £25,000 for the first time and the number of claims has increased 165% in the past decade.

Examples of catastrophic warehouse fires

• In November 2016, fire ripped through two floors of a 700,000 sq. ft. Amazon warehouse in Rugeley, Staffordshire.  Much of the stock was destroyed, resulting in the online retail giant having to pull many products from its website.  The fire turned out to be a result of arson.          

• Sony suffered a major warehouse fire in 2011 during the London riots.  Rioters set fire to the warehouse, resulting in a loss of around 25 million CDs, resulting insurance claims topped £80 million.          

• Clothing retailer Asos suffered a warehouse fire in June 2014 which damaged 20% of the company’s stock, forcing it to halt orders for two days.  The insurance reimbursement totalled £6.3 million. 

According to a report in the Evening Standard, the London Fire Brigade support the call for more fire sprinklers, 

“As well as limiting fire damage and being potentially lifesaving devices, sprinklers also help with business continuity by minimising disruption and allowing businesses to get back to normal as soon as possible”

deputy assistant commissioner for fire safety Andy Hearn told the paper.

Do sprinkler systems in warehouses protect against fire?

A report by the Fire Protection Research Foundation on fire detection in warehouses, considered the issues facing UK businesses relying on warehouses to store stock.  One of the major challenges for organisations is the increasing size of warehouses and the complexity of the stock they now hold. 

The report states that, 

“according to the Fire Safety Advisory Board Chair, Pamela Castle, the risks of modern warehouses in the UK are increasing due to the use of remote controlled storage retrieval, insulating core panels, plasticized goods and storage, and factory built construction.  Such methods increase efficiency but simultaneously increase potential fire loads and hazards, and often result in faster fire spreads. In addition, the replacement of wooden with plastic pallets has introduced additional hazards for flame spread and noxious emissions.”

Ms. Castle also commented that British regulations are focused on health and safety rather than the protection of property; this is the responsibility of the insurance industry.  Therefore, because the installation of compulsory warehouse sprinkler systems is unlikely to result in lives being saves, the government has been slow to update legislation to bring it in line with other countries in the EU.

Could commercial pressure result in compulsory sprinkler systems for warehouses?

With the continued growth of online retail, organisations are more reliant on large warehouses for storage.  Insurance disputes can result in thousands of pounds being spent on solicitors acting for both sides.  Profits can also be hit hard if a company cannot fulfil orders for days, or even weeks because of a devastating warehouse fire.  Heavy reliance on and the increasing size of warehouses is now putting additional pressure on the insurance industry.  It is likely that the government will respond soon with a regulatory change.

Because of the considerable outlay in capital involved with installing a fire sprinkler system in a warehouse, sometimes only a change in the law can justify the expense.  According to ABI, Sony has not installed a sprinkler system in its new depot (this has not been commented on by the company).