COMMENT: “Are you adequately protected?”

PATRICK ELSTON

 

I am frequently asked by Insurers and Reinsurers to conduct risk surveys of commercial, industrial and semi-Government organisations to assess fire and security risks. In the public sector, where new buildings are involved, fire detection and security alarms are common as are modern in-house fire fighting systems such as hose reels, dry risers for use by the Fire Brigade and industrial standard fire extinguishers. It is clear from this that the message of safety first has got through to those responsible for designing and equipping public buildings.

Unfortunately the private sector lags far behind and there are a considerable number of commercial and industrial premises without any significant detection or security systems. In one recent case where I recommended a comprehensive smoke detection and burglar alarm system, coupled with sprinklers, hose reels and a comprehensive supply of fire extinguishers the owner’s response was “if I have all those I will not need insurance!”.

I was at some pains to explain that security and detection systems on the one hand and insurance on the other are not mutually exclusive. Protections and security systems can reduce the likelihood of a serious loss by fire or burglary but they do not remove the requirement to have adequate insurance protection. The security systems can be the first line of defence against disaster, but should the protections fail to prevent, say a fire, for a number of perfectly valid reasons, the insurance policy is the ultimate protection against financial disaster that will help and organisation get back on its feet. As Cyprus becomes more and more European it will be of benefit to persons seeking insurance to be able to notify their Insurers that they have adequate fire and burglary protections. It is common practice in Europe for premiums for well protected premises to be lower than those without protections and this will and should become the universal practice in Cyprus.

Some years ago fire detection and security systems were relatively expensive in the Cyprus market. In the last five to ten years the number of companies specialising in this field has increased and prices have become competitive to the benefit of the customer. It is my strong conviction that well manufactured and effective protections can be purchased in the Cyprus market at a cost-effective price and that for a business to avoid doing so is a grave commercial mistake.

Insurers are often prepared to share the cost of the services of a company such as my own for a risk survey report. Even if Insurers are not prepared to contribute a study by a professional firm at a cost varying between Euros 500 – 850 will produce a report specifying the necessary protections. When the protections have been completed the certificate of the installer, accompanied by the risk survey report should result in a saving of insurance premiums which should pay for the survey report itself within three years. Being safety conscious will save money in the long run.

My message on this occasion is that security systems and insurance go hand in hand and should be regarded as complimentary components of a commercial organisation’s protections against fire and other disasters.

 

Patrick Elston, MIILA; F.C.I.Arb., Solicitor, is an expert on property, marine, liability and engineering insurance. He is Director of Cunningham Lindsey Cyprus the Regional Office of Cunningham Lindsey International a worldwide Insurance Loss Adjusting Group.

 

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