Can Sprinkler Installations Reduce Insurance Premiums?
As most of us already know, insurance premiums are determined by the level of risk that’s posed. In general, the greater the risk, the greater the cost. That’s why homeowners who install a burglar alarm may pay less on their contents insurance than someone with no advanced security features. It’s why drivers with a black box often pay less on their car insurance than someone driving without the device.
So does this apply to fire protection, such as sprinkler systems and dry & wet risers, too?
It’s certainly possible. Many businesses have already benefited from reduced insurance premiums, due to the enhanced protection that high quality, reliable sprinkler systems can provide for buildings.
How do sprinklers lower premiums?
A sprinkler system works by automatically suppressing a fire with water as soon as excessive heat is identified within a particular area of the building. The water slows the spread of the fire, helping to reduce damage to both buildings and contents. This can significantly reduce insurance claims following a fire.
What many people don’t know is that, unlike in the movies, sprinkler heads don’t all activate across a building in the event of a fire. Only the heads in the immediate vicinity of the fire are triggered. This minimises water damage throughout unaffected areas of the building to further reduce insurance claims.
Do businesses really save with sprinkler systems?
Yes! Larry Stokes, Head of Property at Zurich Insurance Group, says that “the installation of sprinklers can cut property premiums by as much as 50%’. But how much are organisations really saving on insurance?
- A report by the Building Research Establishment (BRE) Group found that the cost of insurance over the course of a warehouse’s lifetime could vary significantly depending on whether sprinklers were installed or not. For a large warehouse of more than 10,000 square metres, the average lifetime insurance without a sprinkler totalled £723,504. That compares to a much lower £361,731 with an installation.
- When looking at ways to reduce costs, Worcester County Council discovered that insurance premiums for the local schools could be reduced by 65% by installing sprinkler systems throughout the buildings. Unfortunately, the report notes that the council – along with other councils such as Warwickshire – were concerned about upfront costs of the installations, sadly deciding not to install systems in schools.
How much can I save?
That’s a tricky question to answer. A document issued by the London Assembly Planning Committee states that “in general, the better protected the building, the more favourably insurers will look at it.” However, it also states that “it is very difficult to quantify the level of insurance premium offered for sprinklered buildings, as this varies on a per-risk basis, and also varies company-to-company”. For example, even though two buildings may both have sprinklers installed, the chance of a fire breaking out may still be greater in one building than the other. This could be due to the nature of the business or a variety of other factors.
What we do know is that sprinklers must be properly maintained to ensure insurance remains valid, and that, according to the document, systems that are installed poorly may result in higher premiums.
Do all insurers offer reduced premiums?
Unlike standard policies for reducing premiums for enhanced road safety or home security, there is currently no official policy for reducing insurance costs for sprinkler systems or dry & wet risers. But this could be about to change. Speaking in 2019, Scottish National Party MP Alison Thewliss noted that “people’s insurance premiums can be reduced if they have a burglar alarm fitted; we need the same incentive for sprinklers.” This suggests that a general policy could well be on the cards for the near future.
Ready to save?
If you’re keen not only to enhance fire protection at your premises, but also to see if you could save on your business insurance costs, get in touch with Eversafe. We’re always happy to discuss our commercial sprinkler design, installation, and maintenance services. Call us on 01795 713123, or email email@example.com.