Sprinkler systems are critical fire safety measures. But knowing whether a building has a sprinkler system is only part of assessing potential property loss. And it’s not just firefighters who want that information. Insurers often want to know precisely how effective the system is. ISO’s commercial property group conducts engineering assessments of the effectiveness and loss reduction capabilities of sprinkler systems throughout the country.
The Sprinkler Assessment Report is an objective engineering review that provides an accurate estimate of the sprinkler system’s ability to contain fire spread for the specific hazards of occupants in the building. It analyzes whether a location’s automated sprinkler system is properly designed and maintained to be effective and grades the system on a scale from 1 to 100. That score is based on ISO’s SCOPES (Specific Commercial Property Evaluation Schedule) national engineering schedule, which uses National Fire Protection Association (NFPA) standards.
Verisk provides two loss estimates to gauge the effectiveness of the sprinkler system in mitigating economic loss to a building and its occupants. Type I Loss is an estimate of the largest loss that a building or occupant is likely to suffer because of a fire, assuming critical protection systems function as expected. It’s expressed as a percentage of the building’s value. Type II Loss is an estimate of the largest fire loss likely to occur, assuming the most important protection system fails.
We recently worked with an insurer on a sampling of its book of business — 2,103 properties — to review for accuracy. The insurer’s records on those properties revealed that 11 percent had incomplete records, and another 21 percent had imprecise information about the sprinkler system. That translates into 447 properties. When compared against our database of field-verified assessments, we found that 64 percent of those 447 properties were on the insurer’s books as not having a sprinkler when in fact they did. Conversely, 36 percent were on the books as having a sprinkler when they did not. Those disparities create potential for tremendous risk.
Besides the book of business, there are many other factors to consider:
- Does the system work?
- Was it designed correctly?
- Does it cover all areas, or are there blockages?
- Is the water supply adequate to support it?
- Has the system been tested within the last year to confirm any of those conditions?
That last question, testing, is the easiest and least expensive for an insured to address — and the only one that confirms all the others. Yet it’s also one of the most common deficiency areas on a sprinkler grading.
ISO receives sprinkler system testing documentation from building owners, real estate managers, and sprinkler contractors. ISO routinely reaches out to communities to maintain the sprinkler documentation. That outreach helps us provide insurers with updated testing information, commercial buildings with updated sprinklered status, and communities with the means to monitor and adjust needed fire flow (NFF), which is the amount of water that should be available for fire protection.
In a building without adequate protection features, a single occurrence might cause a significant loss with a high probability that both the building and its occupants would experience extensive damage. Fire departments and property insurers strive to minimize that potential loss. It starts with a sprinkler system that’s routinely checked.