Fire is among the most frequent and common causes of damage and loss to Canadian small businesses every year.

According to a 2017 Statistics Canada report using data from the National Fire Information Database, there were over 439,000 fire incidents between 2005 and 2014, with structural (building) fires accounting for six in 10.

Recovering from a fire at a place of business is not inexpensive. Thankfully, fire insurance for business property exists as a component of commercial property insurance.

Firefighters extinguishing a blaze

Business fire insurance is a coverage that’s a part of a commercial property policy, which provides financial support to repair or replace damaged property, including buildings, because of a fire, flood, natural disaster, theft, or vandalism. It also covers your business’s contents and inventory (furnishings, electronics, merchandise).

What Does Business Fire Insurance Cover?

Commercial property insurance provides financial support to repair or replace damaged property, including buildings, because of a fire, flood, natural disaster, theft, or vandalism. It also covers your business’s contents and inventory (furnishings, electronics, merchandise).

That policy may include coverage for incidental damage and destruction to your business property from smoke, charring, or damage caused by firefighters. Generally, commercial property insurance covers the cost of fire damage to a business space you own, rent, or lease, your contents, and exterior property like fences, outdoor signage, and landscaping.

After purchasing commercial property coverage, it’s recommended you create and maintain a contents inventory list of all the physical assets and goods on the premises. That list will come in handy if you need to file a claim for damage or loss with your insurer.

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Can Other Insurance Can Help a Small Business Recover From a Fire?

Although commercial property insurance covers the cost of damage or loss from a fire to your office or retail store, including repairing or replacing your inventory, furnishings, and other contents, there are other coverages you may wish to add to enhance your protection.

For instance, most commercial property or business owner’s policies include business interruption insurance but check with your broker to be sure. It is a smart add-on to your policy if you don’t have it. Essentially, business interruption coverage kicks in following an insured loss (like a fire). It is designed to cover operating expenses while your commercial space is shuttered and under repair. Some of the expenses it covers include rent or lease payments, utility bills, employee payroll, and funds to relocate to a temporary location and keep your business up and running while your primary property is uninhabitable.

If you own business vehicles (vans, cars, trucks), you’ll need a commercial auto policy that includes optional comprehensive or all-perils coverage to protect them from damage or destruction from fire.

If your profession or business involves using expensive, transportable tools and equipment, purchasing tools and equipment insurance is worthwhile. It pays to repair or replace tools and equipment damaged by fire or flood, lost, vandalized, or stolen.

5 Fire Safety Tips for Business Owners

While having commercial property coverage as part of your overall business insurance policy is wise and can help you recover quickly from fire damage to your workplace, it’s essential for all small business owners to be prepared and reduce the risk fire poses in the first place.

Here are five fire safety and prevention tips you can use to reduce your risk:

1. Have an emergency preparedness and fire prevention plan

Whether the risk of fire, flood, or extreme weather, you need to have an emergency preparedness and fire prevention plan. Draft a straightforward plan that includes measures to recover quickly from any catastrophic event while reducing the likelihood of injuries to your employees, customers, and damages to your commercial property and inventory. Ensure that plan includes a fire escape map highlighting the locations of the nearest exits and that all employees are familiar with it.

2. Regularly inspect fire extinguishers and alarm systems

Ensure your place of business has an adequate number of working fire extinguishers and train your employees on how to use them.

According to the Canadian Centre for Occupational Health and Safety, there are three types of fire extinguishers: water extinguishers, carbon dioxide extinguishers, and dry chemical extinguishers. Each is designed to fight different kinds of fires. Contact your local fire department if you’re unsure which type of extinguisher your place of business needs.

Also, ensure your commercial space has sprinkler and fire suppression systems and install a 24/7 monitored smoke, fire, and carbon monoxide alarm system.

3. Be mindful of electrical fire hazards

A significant cause of fires is overloaded electrical circuits and faulty wiring. Check and replace electrical cords with cracked or frayed insulation or broken connectors and avoid plugging more than one extension cord or power bar into an outlet. If you need more power outlets in your office, hire a certified electrician to install them.

Stick to using Canadian Standards Association (CSA) approved cords, power bars, and appliances, and don’t run extension cords across floors, doorways, or under rugs. Don’t allow the use of space heaters and other risky appliances. Furthermore, keep liquids and beverages away from your electrical devices and computers. A spill can ignite an electrical fire.

4. Keep your workspace clean and clutter-free

Not only will reducing debris and clutter in your workspace help prevent potential trip-and-fall hazards, but it also helps reduce the risk of fire since there is less flammable material strewn about that could easily ignite and burn.

If your business has manufacturing or cooking equipment, clean and inspect the equipment regularly or hire a professional cleaning service to perform these tasks.

5. Maintain Your Business’s Exterior

Keep the property surrounding your commercial space tidy by establishing a ‘fire-free zone’. That means removing trash, clearing brush and dried leaves, and trimming plants and trees. Also, designate an outside area for smokers away from combustible materials and provide them with a bucket of sand or sealed receptacle to safely dispose of cigarettes.

How to Get Commercial Fire Insurance

Protecting your commercial property and assets from the risk fire poses is integral to protecting your business and finances.

Fill out an online application to get a free quote from Zensurance. Contact our friendly licensed broker team if you have questions about your existing policy or wish to explore your options.

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About the Author: Liam Lahey

Liam is the Content Marketing Manager at Zensurance. A writer and editor for more than 20 years, he has been published in several newspapers and magazines, including Yahoo! Canada Finance, Metroland Media, IT World Canada and others.