The use of expanded polystyrene (EPS) for insulation and temperature control is a necessary fact of life for many businesses. It also represents a major issue for insurers as EPS constitutes a fire risk that demands effective management.
EPS has been associated with multi-million dollar claims, with the result that many insurers are reluctant to provide property insurance where EPS is present.
If you have EPS panels on your property you must have strong safety and risk controls to get optimal insurance outcomes. For example, demonstrating sound risk management protocols, ensuring hot work permits are current and following risk recommendations from insurers in respect to processes such as welding will help you get the best coverage and premium for your business.
How managing EPS fire risks can optimise insurance outcomes
Insurers that are prepared to provide cover are subjecting EPS risks to stringent underwriting criteria in terms of management, prevention, mitigation and containment measures.
An EPS assessment is critical to support insurance submissions. Making an EPS assessment involves 3 key steps:
- inspecting how EPS is used in the premises
- identifying the potential fire exposure
- documenting measures such as retardants, fire-proof barriers, suppression systems and FM approved sprinkler systems.
Why hot work is an insurer concern, and how to mitigate it
The largest area of concern for insurers is the protection of the EPS insulation and how businesses are mitigating potential fire loss in relation to any type of 'hot work'.
Insurers will require detail about the protection of EPS insulation and fire risk mitigation relating to cooking, heating, welding, battery charging, gas extraction and electrical cabling.
Business owners need to be prepared to provide proof of:
- hot work permits and controls
- cold work permits and controls
- thermographic imaging for all switchboards, fire panels
- regular checks on the integrity of the EPS panels
- stringent housekeeping processes to ensure no combustibles are stored inside or outside the EPS panel buildings
- detection systems for ammonia, smoke and fire events.
Should I replace or improve EPS panelling?
It is strongly advisable that if possible, old or damaged EPS panelling be replaced with fire retardant alternatives. In deciding the correct panel to use, consider the area and size of the building, as well as whether retrofitting sprinkler systems is the best way to mitigate potential damage.
Documenting these measures and the capital expenditure undertaken demonstrates that a proactive approach to limiting and containing EPS risks is in place, which may help influence premium pricing from your insurer.
Anticipate and respond to fire safety scrutiny
Having thorough and far reaching fire safety management procedures in place can significantly mitigate the risk of loss due to having combustible EPS panels in your buildings. Precautions around these older EPS panels is critically important to how the fire hazard in its totality is assessed.
Implementing the following high standard fire protection practices into your engineering, maintenance or operations teams' day to day activities reduces the opportunity for a fire event to occur.
- Site security is paramount and preventing any unauthorised access to the site should be enforced with either 24/7 security or regular security patrols, to prevent any intrusion and reduce the possibility of a fire starting on external EPS panels.
- Externally any potential ignition source, like wooden or plastic pallets, cartons or paper wrappings, should be removed and placed more than 25-30 metres away from the building. This will help ensure the building is not exposed to a heat source.
- It is imperative that any apertures in EPS walls or doorways are completely sealed. Having no passage for a fire to spread through panel walls or doorways limits potential damage.
- To ensure that there is no heat source near the combustible inner core of the EPS panel, electrical equipment or power sources should not be fitted to EPS walls.
- If it's unavoidable for power sources to penetrate EPS walls they should be sleeved in a fire retardant conduit and in the case of IT cables sleeved and located on metal trays away from switchboards and panels.
- Situate any charging stations for forklifts or two-way radios well away from EPS walls. If this isn't achievable then install stainless steel mounting in the charging bay on the outside of the EPS panel to the height of 2.5-5 metres, depending on size of the area and the number of charging stations.
- If the site has any kitchen facilities for staff meals or a cooking function as part of the product itself the flues for extracting hot gases and oils should not pass through combustible panels without adequate protection. Weekly cleaning of the flues and/or extraction fans should prevent build-up of grease or fats that might provide an ignition source.
- If fire sprinklers can't be fitted during the construction of the building or retrofitted to an already existing and operational building, then fire detection systems, gaseous suppression systems for switch rooms, ammonia detection, fire walls and doors installed where appropriate are essential. These detection systems also should ideally be fitted above ceilings as well as below.
Taking these actions helps provide your insurer with the assurance that you are being proactive about risk management in your business, making your enterprise a more attractive insurance prospect and improving your chances of securing more favourable terms on your cover.
Get expert insurance and risk management advice
Commercial property risks and insurances can be one of the most crucial areas of focus for a business. As a high value asset and high cost risk, expertise and support from a broker is of critical value.
