Fire Sprinklers and Insurance: How They Affect Your Premiums

  • May 23, 2023
Insurance paperwork

Insuring your business against fire is essential for preventing disaster and leaving you with nothing. While fires make up a smaller number of total business insurance claims, they account for 21% of total claim value due to the extensive damage they cause. While you can’t afford to go without insurance, implementing fire sprinklers and other protective measures can reduce your premiums and keep you safer

Meeting Local Fire Codes Is Mandatory for Insurance

When it comes to fire sprinklers and insurance, you might be required to have them installed regardless of your premiums. Instead of receiving a discount for improved fire safety, your business is likely obligated to have fire sprinklers as a bare minimum.

If your local fire code stipulates that your type of facility must have fire sprinklers, you’ll need them to maintain insurance protection. Your insurance provider won’t be willing to pay out claims if your property isn’t up to code at the time of the fire. While individual policies can vary, you could find yourself left out of luck.

This goes for both fire sprinkler installation and other areas of fire safety. You’ll need to keep up with routine fire sprinkler inspections and avoid any difficulties with insurance. Having fire extinguishers and following industry-specific precautions can also affect any potential payout from your coverage.

Going Above and Beyond Can Reduce Your Premiums

That said, there are cases where installing a fire sprinkler system or augmenting a current system could reduce your premiums. There are many aspects of safety and maintenance where insurance companies have higher standards than simply meeting code requirements, and they can provide discounts to incentivize those standards.

For example, you might be able to score a discount by expanding fire prevention systems to include auxiliary buildings that aren’t necessarily covered by those fire code regulations. Installing new hardware, such as smart monitoring tech, is another initiative many insurance providers are pushing. Contact your insurance provider to discover any potential incentives.

Simply Installing Fire Sprinklers Isn’t Enough

Installing a fire sprinkler system is the first step to meeting your insurance policy terms, but it isn’t the only one. You also need to keep your fire sprinklers in good working order. That includes getting certification to back up future claims.

Routine inspection schedules can vary depending on your local fire code. Businesses should expect annual inspections (or potentially more often). There are also less frequent maintenance requirements, such as five-year flushing investigations. Your insurance provider may lay out specific terms above what your local fire code requires.

Make Sure You Know Your Policy

Knowing your policy is the most critical aspect of dealing with your insurance. The requirements you face will vary between different insurance providers and plans. Read your policy carefully—you don’t want to encounter unpleasant surprises when rebuilding after a fire.

There’s no standard mandated fire code nationwide, but organizations often refer to the National Fire Protection Association (NFPA) when outlining agreements. There’s a good chance that your business must meet NFPA codes.

Fire Protection Is About More Than Just Saving Money

Improving fire safety at your business can reduce your risk, which may help you save on insurance. However, choosing the right fire protection system is about more than that. Fire poses a severe hazard to your employees and any other visitors.

Even if your insurance doesn’t provide discounts, you must ensure fire safety at your business. While the right solution will vary depending on the specific type of facility, fire sprinklers are among the most widespread and versatile fire protection systems.

Take Steps Today to Protect Your Business

Putting the appropriate fire protection systems in place and maintaining regular inspections and maintenance are vital for protecting your business and meeting insurance policy terms.

A&A Fire Protection can provide for all your safety needs with custom installations, routine inspections, and more. Contact us today to learn more about our fire protection services.