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Although fire risks are well understood and typically��well risk managed, fire remains a significant cause of��business interruption (BI) and supply chain disruption,��especially where critical components are concentrated��geographically and among a small number of suppliers.

According to �ǿմ�ý Risk Barometer respondents it is��the third top cause of business interruption they fear most��(after cyber incidents and natural catastrophes). �ǿմ�ý��Commercial analysis of more than 1,000 BI insurance��claims over the past five years (worth US$1.3bn+) shows it��is the most frequent driver of these claims and accounts for��over a third by value (36%).

“The degree of disruption from fire and explosion can��be very high, as it can take longer to recover from than��many other perils, and the impact on suppliers can often��be great,” says Alberto Barani, a Business Interruption��Group Leader at �ǿմ�ý Commercial. “For example,��pharmaceutical and chemical sectors deal with highly��flammable and explosive materials. Damaged plants can��sometimes take years to rebuild and get production back��up and running to full capacity.”

Fire has also become an elevated risk with electrification��and the growing prevalence of lithium-ion batteries.��Inadequate handling and transportation of these batteries��has been linked to several large fire incidents at sea and��on land in recent years.

Regularly assessing and updating prudent fire mitigation��practices, including preventative measures, fire��extinguishing methods and contingency planning remain��essential for all businesses to lower the risk of loss from��an incident.