Chp 1: Causes of fire, fire inception and propagation, fire risk controls

What to look for in the insured's Storage and handling of stock

(In the case where insured uses high-piled/high-racked storage system) - Segregating stocks; reduce chance of fire hazard ("fire load") and easier to detect/fight a fire

How do you minimise the risk of contractors and application of heat?

- "prevention" checklist / "hot work permit" - Clearing the area of operation of combustible materials before work commences and examining it an hour after work has finished

Examples of Moral Hazard (eg. mindset, character and actions of the proposer)

- (In Prior claims) the insured has not been spontaneous in providing evidence and proper explanation to substantiate the claim or else the evidence and explanation provided seem incredible - Deliberate or irrational postponement in regard to carrying out risk improvements - Unwillingness to revise the sum insured where the size of the risk has increased - Evasive answers to questions posed by the intermediary, underwriter or surveyor

How to control the inception risk?

- Absolute control of admission of tentants - Frequent inspections by the insurer's surveyor to noteany likely problems

What is the Smoking (Prohibition in Certain Places) Act (Cap.310) do?

- Banning smoking in designated premises (to counter 2nd hand smoke) - Reduce the risk of smoking-related fires - Should post suitable warning signs and supply non-combustible reseptacles for smokers

What are the benefits of Contingency plans

- Beneificial for the insured to maintain its own fire brigade with equipment approved by and compatible with those of a public fire brigade - The private brigade meets the insurers' standards of availablity (costly), training and appliances. -> the fire premiums maybe discounted in recognition of the risk improvement.

What results in a Spontaneous Combustion?

- Chemical/Bacterial Reaction - Occurs in an undisturbed mass of organic matter of similar or complementary consituents

Whar are common moral hazards

- Concealment of material facts Eg. Previous losses & claims Eg. Prvious conviction of insurance fraud Eg. Storage of flammable substances without licence - Not concerned with risk management and control - Reluctance or delay in carrying out risk improvements recommended by surveyors (common excuse: cost)

Spread of fire (3 causes)

- Conduction - Convection - Radiation

In Fire inception, propagation and fire load, what is inception hazard?

- Considered the risk of fire starting

What is the definition of Arson?

- Describe the crime of setting fire to one's own property or the property of others, with the intention of destroying or damaging that property.

What are the problems associated with Multi-tenture Buildings

- Different type of trade and processes each with its inherent physcial and moral hazard all under one roof - Inadequate seperation of risks and security - Inadequate fire detection systems - Difficulties in identifying the point of origin of fire for investigation purposes

What is Insurance for spontaneous combustion

- Excluded in the standard fire insurance policy - NOT INSURED - Only can cover the damage to other insured property caused by the spontaneous combustion. Eg. If farmer's hay loft is destroyed by a fire cause by the spontaneous combustion of hay stored in a barn the farmer can claim for the damage to the hay loft but not the hay which spontaneously combusted.

What are the methods in remedying moral hazard

- Explain the benefits Eg. Preventing the loss of property, lives and business interruption Eg. saving in premiums and related insurance cost - Re-survey - Increase in premium and higher excess - Imposing warranties and stringent policy terms and conditions - Terminate policy

How do you inhibit the spread of the fire?

- Fire resisiting compartmentation - Sprinkler installation - Automatic fire alarm system, hand operated fire extinguishers/hose reels

What is a similar matter?

- Hay loft or grain store - Materials maybe in a slightly damp state - Causes decompostion - Generates heat to ignite a fire (Mainly caused by raw materials)

Whare are the 2 categorises that you can catergorise physical hazards?

- Hazards that the proposer/insured can control - Hazards that the proposer/insured cannot control

How does radiation occur?

- Heat is radiated or "lost" from every surface of the body util the air is attained by then the reduced temperature of the hot body - If a cold body is placed near the hot body but not in contact with it, the cold body will warm up on its surface nearest to the hot body - It is similar to the emission of light from an electric light bulb which radiates both heat and light when working

What can problems can poor housekeeping cause?

- Increasing the likelihood of the inception of a fire - Allowing fires to smoulder undetected - Aiding the propagation of a fire once it has started - Hindering a fire brigade's efforts in trying to extinguish a fire

Risk Survey (Roles)

- Inspect the risk - Identify the "target risk" - Recommend risk improvements

What are the basic requirements foor survey?

- Letter of appointment - Letter of indemnity - Security clearance for cameras - Site and floor plans, production flow charts, plans of fire protection and security - Fire and security manual (SOP)

What do you look out for in the insured's Maintenance & Operator's competency of heaters, machinery, equipment (7 items)

- Look for evidence that the insured has taken responsibility for training operatives in the safe operation of machines and heating systems - Insured able to prove that he has identified and rectified any problems/potential problems - Procedures in place - Training provided to all the staff - Kept records of the all the routine preventive maintainance - Arranged for professional inspection - Regular testing and servicing of the safety equipment

What are the sustainability of machinery, equipments and heaters?

- Machinery & Equipment (able to cope with stress and strain) - Heaters (portable and therefore dangerous cause it depends on where you place this heater) vs (fixed heating: segregated & Non-segregated systems)

What are the important factors of location & sitting of machinery, equipment & heaters?

- Machinery and Equipment (function effectively/ pay attention to hot effulent(gaseous and liquid) tp ensure safe transit to open air/conduit ducts) - Oil containtment or liquid overspill (Should a brick bounf compartment that is a size to allow for a spill of at least 20% of the tank contents)

What is complementary matter?

- Occurs with oil-soaked cleaning pads or rags - Oil oxidise when exposed to air - Speed up the heating process in the rags > fire r

What kinds of places are prone to be the target of arson?

- Org. Involved in testing of product on animals - Abortion clinics - Religious/political activities that goes against social norms

What are the causes of Electrical Apparatus fires? (5 items)

- Overload - Lack of Maintenance - Externl factors (eg. water) - Environment (sparks + flammable vapour)

What are the means to reduce physical hazards (5 items)

- Paying extra attention to the cleaning and maintaonance of machines - Selecting a non-radiant enclosed fixed heater, equpied with consistent waster removal to a safe designated area, whether manually or through an automatic system - Maintaining overall cleanliness and orderliness - Installing proper firefighting systems (alarms, sprinklers and extinguishers) - Separating each property into individual untis or storerooms, with appropriate loacks and intruder alarm systems in place. If the property is situated ina remote area, installing an intruder alarm system and linking it to a central alarm station.

General Causes of Fire

- People (Careless discarding of smoking material, unrupervised cooking) - Industrial Processes (Overheating, Sparks) - Heating Systems - Lighting and Power System (Misuses of fuses and circuit breaker) - Other Occupiers (Neighbours, other tentants) - Waste (Careless disposable of dry, oily, greasy waste) -Materials (Self-heating/ignition: spontaneous combustion)

What do you need to consider as an underwriter when insuring for arson?

- Physical security of the place

What are the Surveyor's duties in relation to the underwriter

- Provide details on the type of business and specific industrial processes that are performed in the insured premises - Provide detailed descriptions of harmful or hazardous processes - Describe the production process and nature of construction of the premises in relation to a spread of fire - Conduct and apprasial of the Estimated Maximum Loss by insured perils on premises, goods and contents - Outline the various equipment used in fire detection and fire fighting (+ intruder alarm) - evaluate their effectiveness - Investigate actions taken following any previous losses - Comment on the standard of management as it relates to insured perils - Comment on the risk with regard to other similar types of risks - Conclude whether the risk is acceptable or if more improvements are needed for it to be acceptable

Dealing with moral hazard- What should you do when there is insufficicent or no action taken to limit a loss

- Refuse to pay for the value of that part of the loss

What are the Major Causes of Fire (6 items)

- Smoking - Electrical Apparatus - Static electricity - Housekeeping - Arson - Contractors and the application fo heat

How should the storage and handing of stock be carried out? (5 items)

- Stock should be isolated from any potential fire hazard - Storage of stocks should be in small quantities - Warehouse should be unheated or heated by low-pressure hot water from a fixed boiler in a safe space - Keep flammables away - By law, need to keep flammables in a incombustible construction and fixed with flameproof lighting heating, natural ventilation, self-closing incombustible doors + a door sill of a height that will retain any leakage

How do you make improvements to avoid such problems?

- Stringent safety checks by landlords/surveyors/authorities - Installation of sprinkler system and automatic fire and burglar alarm systems

What are the important factors of Heating and Industrial Processes

- Sutiability of the heater or machine for the function that it performs - Location - The use of the machine - Upkeeping and maintainence/repair of the machine - Safe storage and handling of stock from the raw material to finished stock stages - Contingency plans to deal with fire

How does convection occur?

- The air currents which are created in a still atmosphere when a body is introduced whose temp is higher than that of the atmosphere - The heat from his body is transferred to the surrounding air - The warm air expands and so becomes less dense than the next "layer" of air from the body which pushes the hot air out of the way - Being less dense than the surrounding colder air, the warm air rises - The heat of the hot body is spread throughout the room

What is the practical application of fire insurance?

- The insurer's intention is to provide indemnity for damage to property by fire which occurs fortuitously or by the spread of fire fortuitously from its origin and where it should have contained - IT IS NOT CONCERNED with granting indemnity for fire damage for something legitmately on fire. Eg. Fires in ovens, burners etc

What is Static Electricity

- The moving apparatus or parts of a machine may generate static electricity, even if not directly moved by electric power. - An explosion or fire may result if atmosphere contains flammable vapour or dust. - The underwriter or his surveyor should ensure the insured has fitted a suitable static electricity discharge system onto machines that may generate static electric.

Catergorisation of moral hazard

- The natural reluctance of any business proprietor to reveal how the business operates - The perisstent refusal of the proprietor to change his management of risks and who is dishonest or intent upon "getting away" with "poor" practice for as long as possible

What are the Surveyor's duties in relation to the proposers

- The proposer gains from the surveyor's expert advice that can help them to reduce the risk faced from various insurable perils. - Risk reduction helps with the risk transfer - Periodic inspections and review of the propser's safety standards to verify compliance with requirements - Proposer's responsibility to declare all material facts to the insurer - Some insurer would like to assess the proposer's risk management practises based on safety compliance policies in place. - The surveyor's risk improvement recco which implemented may result in the insurers granting special concessions to the proposer for being more risk conscious

What is propgation risk?

- The risk of a fire developing and spreading - Underwriters will assess the quantiy and nature of the combustible material in a building when evaluating the propagation risk

What are Physical Hazards

- Those that may cause an insured peril to operate - Those that may contribute to the size of the loss - Those that may hinder our attempts to stop or contain the damage - Those that may cause delay in detection

Spread of fire is dependent on

- Time of discovery - Response time from fire department - Type of building construction - Fire load and combustibility of stock/ general contents - Wind

Risk Survey (Aspects covered)

- Trade/business - Location - Geography of site - Process risk - Fire and security protection - Maintainance / Housekeeping - Values at risk - Loss and claim history - Exposure risk - Maximum Probable Loss (MPL)

What are examples of poor Housekeeping (5 items)

- Untidy or congested premises - No proper division between different trade processes - Allowing waste to accumulate - Unsuitable storage of flammable liquids - High piled storage

What consitutes as the contractors and application of heat?

- Using blowtorch or welding equipment - Fire takes place after the contractor left the premises

How does conduction occur?

- When 2 articles with different temperatures come into contact with each other - Heat from the hotter body is transferred to the cooler body until the level of heat becomes the same in each body

What are the 3 things to note when it comes to machine and equipment?

1. Located where work can be put through them effectively 2. Particular attention needs to be paid to hot effluents (both gaseous and liquid) to ensure safe transit to the open air or to collection tanks 3 Conduit ducts need to be clear of any combustible material

What are the 4 things to note when it comes to oil containment or liquid overspill?

1. Location of supply of bulk fuel such as heating oil 2. Secure area, purpose-built metal tank, fitted with a vent pipe and level gauges 3. Cater for situations when the tank might rupture, leak or suffer a vehicle impact 4. Brick bound compartment that will allow the spill of 20% of the tank contents.

What are the different class ranges for heating systems?

A to F (with F being the worse) A&B ususally do not apply premium loading but F will need special consideration.

What is EML

Estimated Maximum Loss

Dealing with moral hazard- What should you do when there is unreasonable claim demands

Refuse to pay the claim, cancel or refuse to offer renewal

What are the types of central heating systems?

Segregated and non-segregated

What are fixed heating systems?

Space Heaters

Property can be referred to as?

Tangible and Intangible elements

In Singapore,, is insurance for spontaneous combustion available? How is it carried out?

YES - Under the special perils - But needs to be specially considered and will usually attract a higher premium rate as the underwriter will treat this as a selection against them

Dealing with moral hazard- What is under insurance?

Application of average

Fire Triangle (Actual Ignition)

Heat, Oxygen & Flammable Matter

Do insurers charge higher or lower for portable heaters in comparison to fixed?

Higher; cause greater hazard as the user may place them in a position that creates a greater fire risk.

Exclusion for fire

Inherent rise claim

Dealing with moral hazard - What should you do when there is a concealment of material facts?

Void the contract from inception if there is no satisfactory explanation