Would your business survive if disaster struck?

 25th Jan 2010

Would your business survive if disaster struck?

As I write this article, my thoughts are drawn to the terrible recent events that are occurring in the Caribbean Island of Haiti. The Capital Port-Au-Prince was hit by an earthquake of magnitude 7. The strongest quake to hit the island in its history has claimed thousands of lives and devastated the infrastructure; rendering the transport network useless, bringing down the power generating systems and destroying most of the communications networks.

It will take the resources of the World's communities, who have offered their time, assistance, and huge amounts of financial aid just to stabilise the situation. The devastation will blight many people's lives; losing loved ones and their livelihoods from their businesses that, in all likelihood, will never recover.

The word disaster is defined by the Oxford English Dictionary as "a sudden accident or natural catastrophe that causes great damage or loss of life, an event or fact leading to ruin or failure"

Fire, one of mankind's greatest assets and also one of the most deadliest, can strike at any time. I have spent my whole career witnessing first hand the devastating effects fire can illicit on people's lives, their businesses and our communities. Fire, by its very nature, is a self perpetuating reaction. Heat is produced from the combustion process, and consequently the temperature of the flame is increased; this, in turn, keeps the material burning at it's ignition temperature. We can categorically state that this process will continue as long as there is fuel and oxygen. This means that once a fire starts it will consume everything within its path until checked.

The costs to society are simply staggering. In 2007, fire and fire related incidents cost the American economy 317 billion dollars (2.8% of their Gross Domestic Product) and the UK 7 billion pounds (4% of their Gross Domestic Product). Added to the financial burden are the hidden post-fire costs. For example, waiting for the Fire Investigator to advise the Insurance Company on whether the costs should be met; in complicated cases, perhaps where civil or criminal actions are involved this could exceed twelve months.

One must then consider meeting the expectations of your customers; your company reputation; losing business to your competitors; relocating to alternative premises; cash flow problems and the high probability that your experienced staff will seek alternative employment.

The sceptics will counter this argument with the fact that the majority of businesses are extremely well protected from the dangers of fire, due to Governmental policy development and Fire Department enforcement of the various pieces of Fire Safety Laws written into the Statute.

The Fire Engineer and the Architect design the building to be structurally safe from fire; the building is fitted with the required levels of fire protection including intelligent smoke detection and fire alarm warning systems. Even life safety measures are considered with the fitting of water sprinkler systems. Yet we still have fires, fatalities and loss.

Following a fire that occurred in a themed nightclub in the district of West Warwick, Rhode Island in the USA in February 2003, that caused the deaths of 100 people and severely injured 230 others, a full investigation was carried out into the cause of the fire. The building was fitted with the required fire protection, a suitable alarm system was in place and did operate, and apart from not being fitted with a sprinkler system, a point that was missed by the local Fire Inspector, the building complied with the Fire Laws. Several people associated with the owning and running of the club have since received lengthy jail sentences and the civil and criminal compensation claims run into the hundreds of millions of dollars; the case still continues to date. The cause of the fire was recorded as the illegal use of Pyrotechnics inside the nightclub.

One would assume that society would have learned some important lessons from this high profile case, yet in December 2009, 113 people lost their lives in a nightclub fire in the city of Perm near Moscow in Russia; the cause of this fire was the use of pyrotechnics inside the nightclub.

According to the US Labour Department at least 40% of all businesses never reopen following a fire, and, of those that do, 25% close within two years.

As a point of interest, fire protection of buildings has existed in one form or another for hundreds of years. One of the earliest recorded examples can be traced back to 1666 following the Great Fire of London in the UK and the Great Fire of Chicago, USA in 1871; following both fires, each country introduced Fire Safety Regulations for buildings.

Clearly the fire safety of your business is critical to your survival. From this we can therefore conclude that it should be integrated into your annual business plan - relying only on the passive fire safety systems and protection measures designed into the building is foolhardy. What is required is to formally develop a strategic business continuity disaster plan. The plan should be based around the following; the establishment of a Management Team to oversee the plan using SWOT analysis; Business Process Data including staff contact details, customer data bases, contractor and business partners; data back up facilities off site; damage mitigation procedures and location of temporary premises.

An integrated and joined up approach will ensure the survival of your business should a disaster strike.

There is however one simple measure that you can take that is as, if not, more important than the points just mentioned: to ensure all your staff are made aware of the hazards and risks within your premises, develop educational fire safety awareness, through ongoing training programs such as fire risk assessment, establish key responsibilities for managers through KPI's and encourage staff to join your team of Fire Marshals; they will then adopt the role of the eyes and ears of your company.

The reality is that the danger of fire is always with us and we must remain vigilant at all times.

By adopting an intelligent approach to the fire safety of your business, you can be certain that the associated costs will be more than compensated for.

Remember prevention is always better than the cure.

Phillip Kilgallon BSc(Hons) DipOSH MIFireE GradIOSH MISQEM
Consultant for Connaught Gulf
 

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