Scenario

A sprinkler head in a closet on the second floor went off resulting in water damage to the first and second floor, as well as the basement. The exact cause of the sprinkler head going off is not able to be determined. It is believed that the heat in the closet may have been a factor.  The expert hired to determine the cause noted that the sprinkler heads in the house were approximately 30 years-old and were either corroded or leaking.

Result

The final cost of this claim was $498,444. There is no subrogation potential against the manufacturer of the sprinkler system or the company who installed it as the House Corporation did not maintain any records regarding when the system was installed or when it was inspected.

Issues to discuss

  1. Is your sprinkler system inspected on a regular basis? How do you ensure that the sprinkler system is inspected annually?
  2. Do you maintain all of the records from the inspections?
  3. Does your house have an alarm when the sprinkler system is activated?

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Scenario

A member was using a deep fryer in the kitchen to heat oil. The member walked away to another room, and the fryer caught the cabinet and microwave on fire. The fire damage was contained to the kitchen. However, there was smoke damage throughout the house.

Result

A total of $47,972.09 was paid out for the claim.

Issues to discuss

  1. Are residents allowed use of the commercial kitchen equipment? If so, what are the regulations regarding the use of the commercial kitchen equipment? See below for our risk management response to this practice.
  2. Discuss safe alternatives to the members using the commercial kitchen equipment
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Scenario

A fire broke out in the attic of the chapter house from what they believe was some insulation that fell between the wall and flooring landing on some wires and ignited. The attic was not sprinklered and sustained all of the damage below. However, as the claims progress in the cleaning up and repairing of the attic space, the state building code regulations had to be addressed. The wing where the fire originated was built in the early 1900s, and they could not let the members back into that area until some of the original construction items were upgraded even though they were not affected by the fire (e.g. some of the members had to be moved to other facilities, the insured had to pay for additional meals as the kitchen could not be used).

Result

The code compliance issues drove the cost of claim over $1,000,000.

Issues to discuss

  1. What policies do you have in place in the event of a severe and lengthy property claim? (i.e. where will you house displaced chapter members? How can you minimize extra expenses associated with the claim?)
  2. Do you regularly inspect your attic space? Is your attic sprinklered?
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This guide from Travelers, the insurance company for MJ Sorority clients, provides step by step instructions on how to develop a fire safety plan for your building.

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The Indiana State Police have released a series of tips to help residents avoid carbon monoxide poisoning.  Carbon monoxide (CO2) is an odorless, colorless and tasteless gas that does not cause irritation to the eyes or throat.  Often victims don’t realize they are inhaling toxic gas until they become ill.  More than 500 people die annually from carbon monoxide poisoning.

Symptoms of carbon monoxide exposure:

  • Flu-like symptoms with no fever
  • Nausea, vomiting
  • Dizziness
  • Irregular breathing
  • Fatigue and weakness
  • Drowsiness
  • Headache
  • Confusion
  • Feeling better after leaving a particular structure but feeling ill upon return

Safety measures to prevent exposure:

  • Purchase a carbon monoxide detector for every level of your home.  Don’t ignore the alarm when it is activated.  Open the windows and leave the structure until the carbon monoxide has been located.
  • Have your traditional heating system inspected annually.
  • Never warm up a motor vehicle in a garage even if a door is open; have your vehicle checked for exhaust leaks.
  • Be sure all fuel burning sources like has and wood stoves, fire places and portable heaters are working properly and their flues or chimneys have been inspected.
  • Never burn charcoal indoors.
  • Never use a gas range or oven for home heating.
  • Never use gasoline or diesel powered electric generators in an enclosed area.
  • If the structure you are in is air tight and lacks ventilation, crack open a window for fresh air.

Excerpted from IndyStar.com

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This guide provides the ways, whens and hows of installing an automatic sprinkler system.

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This resource from Travelers, the insurance company for MJ Sorority clients, provides an overview of how sprinkler systems operate and the advantages of providing earthquake protection for them. Includes a list of protection features for sprinkler systems provides the basics.

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Excerpt from News & Notes

Year end 2017, the MJ Sorority Department was very pleased to see that we now have seventy-eight percent (78%) of our chapter houses under the additional protection of a fire suppression system. The leadership of the women’s fraternities and sororities are to be complemented on this attention to safety for their members and the preservation and protection of their property.

The goal of having a fire sprinkler system is twofold:

  • To reduce significantly or entirely the risk of fatalities in a sorority chapter house due to fires
  • To reduce significantly the ultimate property damage of the claim and disruption to your operations

As a reminder where a fire sprinkler system is installed, the property owner or house corporation has the benefit of a forty percent (40%) credit to their property insurance premium, which is a substantial financial benefit to the property owner.

Those chapter houses that are sprinklered were generally following the NFPA Code 13R, which required sprinklers except in the attic space. There was the assumption that there would be limited access to the attic space and the attic would be clear of storage and of any other use.  The cost advantages of the NFPA 13R code over the prior code of NFPA 13 are substantial, ranging roughly 40-60 percent less.  This is due to several reasons:

  • Pipe material can be plastic instead of steel (product cost and installation costs)
  • Attics do not have to be sprinklered if limited access and use

A trend has emerged with more fires occurring in the attic which has caused the property insurance underwriter some concern. Since there are no sprinklers in the attic, a fire that begins in the attic burns for a period of time undiscovered. It is only when the roofing is burned through and/or burns through the ceiling of the floor below that the building fire is detected. Valuable time has been lost where the fire department has not been notified as the sprinkler system goes off only after the fire burns through another area beyond the original origin site.

The fire results in more dollars loss per fire, it is harder to detect, it becomes larger in size and causes more widespread flame damage. Water damage also affects the dollar loss per fire since the fire is attached at the highest level by the fire department, affecting all of the floors below as opposed to a fire that is attacked on lower floors only.

We have considered how to address this exposure from a risk management stand point and offer up the two recommendations (applies to both sprinklered and non-sprinklered buildings):

Careful attention needs to be given to any electrical devices that may be operational in the attic, such as electric fans, humidifier, etc. Electrical malfunction is the leading cause of attic fires; three out of four of the largest fires in the MJ Sorority Department were due to electrical malfunction.

Any time that work is being done on these electrical devises, it is important to use contractors that have adequate insurance in case a claim occurs that arose out of their work on the item. Should the contractor cause the fire, then the insurance company would have recourse against the contractors own insurance coverage to pay for the damage to your property. See www.mjsorority.com for more details on this matter.

It would also be wise to pay particular attention to the attic space after the work has been done to ensure that the completed work appears to be functioning as intended.

  • Install a heat detection/sensor or rate of rise detection/sensor, which is hooked up to your fire alarm system to give quick notice to the fire department of a fire in the attic and the occupants of the chapter house so they can evacuate. These devises can alert fire projection when the temperature in the area spikes up from a fire starting in the space. These sensors are relatively inexpensive and are connected to the fire alarm system. You need to contact your fire alarm system company to get more information of the additional risk management tool.

Tattletale is a portable alarm company that distributes important fire safety tools. Tattletale is also a business partner with Travelers Insurance, the property and liability insurance company for MJ Sorority clients, which enables MJ Sorority clients to have access to preferred pricing.  These units are hooked up to the existing fire alarm system and are very reasonably priced.

Of our top four largest claims, three of the four started in an attic and the floors below were indeed sprinklered. As you can imagine when a fire occurs, the liability insurance company underwriter is very pleased that there has been no fatalities; however, the property insurance underwriter is less pleased because with an undetected attic fire, the cost of the ultimate loss is direct damage and loss of use claims are far more substantial than what they would have been if the attic had been sprinklered.

In order to preserve the 40 percent credit, we have two options as we see it:

  1. Install a sprinkler system in your attic, which would be outrageously expensive and impractical or
  2. Install the two or three rate to rise detectors/sensors which has a very reasonable price tag

We urge you to review your system and if the attic is not sprinklered, make arrangements to get the rate to rise detectors/sensors installed. We do believe that in a fairly short period of time that the only way to maintain your forty percent credit will be to have these detectors/sensors installed in your attic.

As a property owner, the safety of your resident members is one of your biggest responsibilities, and we believe that these additional risk management recommendations will help you control your risks.

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