Fires increase the potential for environmental liabilities.
The physical damage and the business interruption due to fire at industrial, manufacturing and business premises is well documented and are generally well covered by insurance.
Whole industries have been developed around fire prevention, property protection and business interruption mitigation measures.
Is it safe to assume that all aspects of the impact of a fire have been addressed? The answer is sadly no, as many organisations have found to their cost. And it is only going to get worse.
In the efforts to control a fire large amounts of water are used, but in sprinkler-controlled fires this is 25% of the volume required to control and extinguish a fire with fire-fighting hose streams alone.
Fire is a chemical reaction
Fire is a chemical reaction and it is safe to assume that materials involved in the fire will undergo some form of chemical changes. Otherwise inert materials may decompose in to toxic compounds, similarly a fire situation can be likened to a large scale uncontrolled chemical experiment.
Contaminated fire-fighting water can enter the environment through direct run-off into a water body, soaking away into the ground or by entering drainage systems.
As the property owner/operator you will be liable for the damage caused by the material released from your operation and the cost of the remedial action. If a criminal case ensues and you are found guilty the environmental cover you thought you had may be invalid and may not cover any fine. You will not know if the contaminated water is environmentally friendly of not, so you will need to contain it.
After the Buncefield disaster in 2005, the Health and Safety Executive found that protective bunding had many flaws that caused large volumes of fuel, foam and fire-fighting water to leave the site. The site’s last line of water pollution defence was practically non-existent, amounting only to the site’s surface drainage systems which were not designed to cope with any large-scale releases. In July 2010 five companies were fined a total of £9.5 million for their part in the Buncefield disaster.
Environment Agency (England) data in 2013 revealed there were 1,587 fire related pollution incidents, ranging from Category 3 (minor environmental impact) to Category 1 (major environmental impact). This represents approximately 11% of all pollution events and with significant costs attached for the environment and industry.
Unless active measures for containment are taken there will be an environmental pathway
It is not limited to fire-fighting water run off
Cancer-causing chemicals and other potentially harmful toxins have been found close to Grenfell Tower in fire debris and soil samples that could pose serious health risks to the surrounding community and survivors of the blaze, a study warns.
The research has uncovered “significant environmental contamination” from a range of toxins, including in oily deposits collected 17 months after the tragedy from a flat 160 metres from the site.
It is not limited to an insurance issue
It is not limited to the site, the insurance coverage and prosecution. It can affect the brand.
The 2019 Aon risk survey determined, the second highest concern facing business is Brand Damage.
When consumers were asked what will make you look negatively at a brand / company, the second highest was environmental impact.
Deepwater Horizon should be a clarion call
The large compensation pay-outs, the environmental clean-up costs and fines following the Deepwater Horizon explosion and subsequent pollution, have reached $65 bn.
It is unlikely these values will be repeated, but the precedent has been set; the environmental costs associated with a fire / explosion can far exceed the direct physical and revenue losses.
With brand sensitive markets the loss of customers can be immeasurable and completely uninsurable.
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