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Case Studies & Whitepapers

Real business problems solved by Society

When disaster strikes our policyholders, they count on Society to step in and help piece things back together. With over 100 years in business, we’ve handled all sorts of issues for the industries we specialize in. Here are a few real-life examples detailing how we’ve helped small business owners like you overcome unique industry challenges.


Avoiding an Electrical Fire at Your Business

Case Study, Risk Management, Small Business, Society Insurance

Download a pdf of this whitepaper here.

Fire.

It's a word you never want to hear in association with your business. Even small fires can cause a great deal of damage, and frankly, damage is just the best-case scenario when it comes to fire—if nobody is hurt, you consider yourself lucky.

But any fire is serious, often being followed by months-long investigations to determine the cause of the fire. As that process plays out, there's also teh need to clean up the mess, which typically takes close to a week and requires a short-term shutdown even with a small and contained fire. That's because when it comes to fire, the damage often goes beyond what actually was burned: Smoke and water damage from sprinklers typically extend far beyond the original location of the fire.

The best response to fires is to mitigate the potential causes before they occur. While some of these causes may seem obvious—as you would expect, smoking materials and cooking equipment are two of the leading causes of fires (see teh full chart of loss types for a better picture of the categories of fires Society Insurance customers have suffered from 2011 to 2013)—others can be almost impossible to detect.



Fortunately, if you know what to be aware of and what to look for, you can go a long way toward avoiding even the fires that start from unseen sources.

Electrical Fires

In 2011, the National Fire Protection Association (NFPA) reported that more than 16,000 fires in non-home structures were ignited due to some type of electrical failure or malfunction. These fires resulted in 13 deaths, 243 injuries, and $501 million in direct property damage. From 2007 to 2011, electrical fires were responsible for nearly a quarter of all direct property damage to non-home structures.

The majority of electrical fires—about 66 percent according to NFPA—are indeed caused by wiring issues that are unseen and that most people would call unknowable. These causes included:

  • Faulty lighting fixtures
  • Animals chewing through wires
  • Electrical surges from outside the building
  • Overloaded wiring (for example, connecting an appliance that has a greater electrical draw than the wiring was designed to support)
But with the right amount of prevention and vigilance, you can actually take some steps to mitigate these issues:
  • Ensure that everyone who works on your building's wiring is a qualified electrician with their own insurance coverage. Check references!
     
  • If you had a pest problem in the attic or walls, make sure you mitigate the issue and take steps to prevent a recurrence. Have any exposed wiring checked for damage.
     
  • When purchasing new equipment, make sure your electrical system can handle the voltage or amperage needs of the new equipment. Equipment should be listed and approved by an authority such as Underwriters Laboratories. For example, using a residential electric range is not acceptable for commercial cooking operations.
Another major source of electrical fires is from the improper use of extension cords. Most large appliances are not designed to be plugged into an extension cord, and most appliances do not move once they have been positioned. Since by definition an extension cord is a temporary electrical service, plugging an appliance into an extension cord violates most electrical codes and OSHA standards (1910.305). If an extension cord is an approved optionfor the appliance in question, the manufacturer will typically provide specific guidelines regarding the type and/or gauge of cord that may be used (it's not likely to be the run of the mill extension cord you have lying around). In most cases where you need power in a place without a plug, you should consider having additional circuits, outlets or drop cords installed by a qualified electrician.

Extension cords should not be run through a doorway—they often get pinched and damaged this way—not should they be run underneath a heavy object. Although you may not immediately see the damage on the exterior of the cord, chances are that extension cords used in this fashion are damaged and can become major fire risks.

Finally, power strips should never be plugged into extension cords. Power strips should only be plugged directly into an outlet. Furthermore, power strips are not designed to support appliances; the power draw on most appliances is too great for power strips and can lead to fires.

Other important tips to follow:
  • When purchasing used equipment, make sure to have it inspected by a professional to ensure the wiring, controls and safety features are functioning properly.

     
  • Ensure that devices have both a high temperature limit switch that will shut the heating device down if the primary thermostat fails and a tip-over feature that will shut the device off if it tips over. If it doesn't have these features, don't make the purchase.

     
  • If your building's electrical system is more than 15 years old, have it inspected by a qualified electrician to ensure there are no obvious weaknesses.

     
  • If you have a circuit that causes the breaker to trip when you turn on two pieces of equipment at the same time, this is a sign of an overloaded circuit—immediately call an electrician and get it fixed. Constantly resetting the breaker is not a solution.

     
  • Read and retain the owner's manual for all equipment and appliances. Use it to train your employees.
     
  • The only person who should work on your building's electrical system is a qualified electrician—not your cousin's nephew who is good with his hands.
     
  • Set up a preventative maintenance schedule for all appliances and have a qualified technician perform an inspection to ensure they are functioning properly. This is particularly important for equipment that is 15 or more years old.
     
  • Avoid overloading outlets. Plug only one high-wattage appliance into each outlet at a time.
     
  • If outlets or switches feel warm, you have frequent problems with blowing fuses or tripping circuits, or you have flickering or dimming lights, call a qualified electrician.
     
  • Make sure you have ground fault circuit interrupters (GFCIs) in any areas where water may be a factor.
     
  • Install circuit breakers that include arc fault circuit interrupters (AFCIs) in your electrical panels or AFCI outlets in branch circuits. An AFCI is designed to prevent fires by detecting an unintended electrical arc and disconnecting the power before the arc starts a fire. Some areas will require both GFCI and AFCI protection.
Combating Electrical Fires

Let's face it. Despite the best efforts of everyone involved, sometimes things just happen.

To combat fires as an employer you have some choices to make. The Occupational Safety & Health Administration (OSHA) standards 29 CFR 1910.38 and 1910.39 require the employer to have an Emergency Action Plan and Fire Protection Plan. As part of those plans, you will have to determine if you want your employees to use fire extinguishers to respond to incipient fires. If you do, then you will also have to comply with 29 CFR 1910.157 regarding the use of Portable Fire Extinguishers.

This whitepaper is too short to cover all three of these standards in detail, but below are some important aspects of employee safety training that you would have to include for employees:

Types of Fires

For electrical fires or fires on electrical equipment, use a Class C extinguisher. Other extinguisher types and their uses include:
  • Class A: Fires with ordinary combustibles such as wood and paper.
  • Class B: Flammable or combustible liquid fires such as oil or gasoline.
  • Class D: Combustible metal fires, such as magnesium.
  • Class K: Combustible cooking media such as vegetable or animal oils and fats
PASS

PASS is an acronym on how to use a handheld fire extinguisher. This handout on the Society Risk Control website can be used to train employees in this system:
  • Pull the pin while holding the extinguisher away from you to unlock the mechanism.
  • Aim low toward the base of the fire.
  • Squeeze the lever.
  • Sweep the nozzle from side to side at the base of the fire.
Society's team of loss control experts, association partners and agents can help restaurant and bar owners ensure that they have the proper practices and policies in place—right down to the smallest details—to prevent and recover from a fire. With extensive experience in insuring all kinds of small business, Society can provide policyholders with a cusotm plan that fits their needs. Get in touch with a Society agent today by visiting societyinsurance.com to learn more about how to best protect your business.

Download a pdf of this whitepaper here.