Site security inspections and dedicated loss prevention measures will help ensure a successful and safe reopening after shutdown, as businesses are warned that fires, machinery breakdowns and faulty workmanship or maintenance are among the most expensive causes of insurance claims.

This is the advice of risk consultants at Allianz Global Corporate & Specialty, in a back-to-work checklist issued today for businesses preparing now to reopen after a period of inactivity.

“Restoring operations at a facility that was once idle or vacant presents another set of loss prevention challenges, particularly to manufacturing plants with hazardous equipment or processes,” explains global technical and expertise manager for Property Risk Consulting at AGCS, Stephen Clark. “For example, fuel-fired equipment may need to be restarted, which creates an additional risk of fires and explosions. There may be a reduction in workforce available to operate and maintain production equipment safely or to respond to emergencies. Also, lapses in maintenance of buildings, equipment and fire protection systems may create hazardous conditions.”

Special attention should be paid to the condition of electrical equipment and installations, given that around 20% to 30% of AGCS fire claims are related to these. Insurers have also seen a number of claims from fires resulting from technical defects or operational error after machinery has been restarted or cleaned in preparation for reopening of facilities. AGCS' own analysis of insurance industry claims shows that fires already account for almost a quarter of the value of all business insurance claims over a five-year period – the major cause of losses – while faulty workmanship and maintenance (8%) and machinery damage (5%) rank as the 3rd and 7th top causes of claims respectively.

To restore a site securely, a thorough self-inspection of the site, including all buildings and equipment, to detect and correct any unsafe or abnormal conditions, such as damage, maintenance issues, improper housekeeping or storage or signs of vandalism should also be considered.

Businesses should also complete and reinstate any inspection, testing and maintenance procedures that may have lapsed since the shutdown.

When restarting idle machinery, operators should follow standard operating procedures and manufacturer guidelines for bringing shutdown equipment or processes back online.

Facilities introducing alcohol-based (flammable) disinfectants, such as hand sanitisers, should implement proper fire safety precautions. AGCS says this should include keeping them away from ignition sources, such as open flames, encouraging employees to rub their hands dry to allow vapours to safely dissipate, disposing of all waste rags in approved, normally closed containers, and storing flammables in designated cutoff rooms or approved cabinets.

“Prior to restarting operations is the ideal time to review the effectiveness of your business continuity plan,” adds Clark. “Revise the plan as needed based on lessons learned during the temporary shutdown to keep your emergency planning up-to-date.”

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