Fire Sprinklers and Building Insurance




On March 7, 2007 the Planters Hotel in Brawley, CA (pictured above) burned down.
P. Allen Early, the building owner, filed a claim with his insurance carrier for the $3.1 Million loss.
Although fire investigators ruled that the fire was an act of arson, Early faced a problem:
The hotel's fire sprinkler system was shut off when the fire occurred. Documents presented in court indicated that the fire sprinkler system was discovered shut off the day before the fire by the local Fire Department during a routine inspection.
Early's insurance carrier, the Chubb Custom Insurance Company, originally denied the claim for fire loss because of the shut down fire sprinkler system.
"There was an insurance policy issued by Chubb Custom Insurance Company that had a provision that required the insured to maintain the sprinkler system in complete working order. At the time of the fire the sprinkler system was turned off, and it is Chubb's position that a minimum, maintaining it in complete working order means having it turned on, otherwise there's no way it can work and it accomplishes nothing. The policy says it is the insured's responsibility to maintain in in complete working order, and whether or not he knew it was turned off, he was the one in control of the situation," explained the insurance company's attorney.
The two sides later settled after a lengthy legal battle, but this unfortunate incident should be a lesson we can all learn from. Let's look at how this could have been prevented:
1. Fire protection systems, including fire alram and fire sprinkler should always be on in operating condition. The International Fire Code, adopted in most states and localities, requires owners of fire protection systems to notify the local Fire Department of any impairment.
2. The Fire Department found this system shut off the day before the fire and testimony indicated that the Fire Chief intended to take legal action against the owner the following business day. Perhaps if the Fire Department would have taken immediate action when the impairment was discovered, the building would not have been lost in the fire.
3. The owner indicated that he had no knowledge of the sprinkler control valve being turned off. Yet, the Building and Life Safety Codes clearly indicate that owners of fire protection systems are responsible for maintaining them in operating condition. NFPA 25, which regulates maintenance of fire sprinkler systems, requires valves controlling fire sprinkler systems to be inspected weekly to verify they are open. The owner was apparently not performing this task.
Owners of fire protection systems have both legal and contractual obligations to maintain their fire sprinkler systems. Failure to do so could result in serious financial and legal penalties, from loss of insurance coverage to negligent wrongful death or injury claims if someone is injured.
A qualified fire protection contractor can assist the owner in meeting obligations through discussing the required maintenance and inspections and determining which items the owner can self-perform and which items the contractor can perform.
Cherokee Fire Protection Co. serves clients throughout Ohio, Indiana, Kentucky and Michigan. We work with clients to develop maintenance plans suitable for their systems which meet legal requirements and reduce overall risk for the systems owner.
For further information, please contact Forest Wilson, Vice President of Cherokee Fire at 937-376-2333 or email: fwilson@cherokee-fire.com

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