When are Insurance Site Visits Necessary?

MeyerFire University | FX102.07

By Franck Orset

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TRANSCRIPT

When are insurance site visits necessary? 

PROSPECT SURVEY

 In this series we’re covering site visits from the perspective of an insurance carrier.  

But when do site visits need to happen? The easy answer – anytime it is deemed necessary.  

This is sometimes difficult to determine, as there’s a fine balance between too often and… too late!  

Normally, a survey is required before proposing any insurance coverage. We call this a prospect survey. This survey helps to roughly evaluate the facility. Ideally, this is done well in once and in a timely fashion so that underwriters can make a quality evaluation.

WHEN SURVEYS ARE PERFORMED

Once insured, regular surveys are usually performed. The frequency may depend on several factors, including the internal rules from the insurance company.  

Most regular surveys are normally performed on an annual basis. These annual visits give an opportunity to view and evaluate changes that happened during the prior year, as well as follow up on prior recommendations.  

Longer intervals are sometimes set up for very small facilities. It’s not always cost effective for an insurer to frequently spend time on surveys at relatively low-exposure locations. There’s also a limit to the amount of change that can happen within a small facility. 

On the opposite end of the spectrum, visits can be made to happen at smaller intervals. This is the case, for example, for Highly Protected Risk or HPR facilities, where favorable insurance treatment may be offered because of the high quality of the risk mitigation. If these conditions change, because of a building addition, or a poor maintenance of the fixed fire protection systems, this facility may not be considered as an HPR facility anymore. The increased frequency of site visits can help clarify this assessment. To be sure that all conditions are met, a 6-month frequency is often the norm for HPR facilities.  

SMALL INTERVALS

If a facility needs to improve it’s fire prevention practices, or improvements need to be made to fire suppression systems, then smaller-intervals between visits could also be deemed necessary. These can be especially helpful at the beginning of an insurance program.

These visits could take the form of full facility surveys on a more frequent basis, or additional separate surveys just to evaluate a specific topic or component of the facility protection. 

TOO LONG OF INTERVALS

The downside to having too much time lapse between surveys is that unwanted situations could occur, and it may be too late to improve it at low cost. If there is design or renovation work happening within a facility, for instance, then being aware and involved in the process can allow changes to happen easily while the project is underway, and not six months after all the contractors have left the site. 

A good relationship, with regular exchange between the facility and the insurance company is key to avoiding costly situations and keeping a high degree of fire protection practice. If there are any new projects or conditions that may impact the fire protection systems, or general exposure to fire events, then it should be reported and communicated between both parties.  

Special surveys can be organized in-between the regular intervals that a carrier intends to visit a facility. 

SUMMARY

When are insurer site visits necessary? In general, insurer site visits need to happen on a planned frequency that matches the company policy, relative risk, and insurance strategy, such as HPR, but then also whenever major changes happen that could impact the fire exposure or ability of a suppression system to respond to a fire. 

I am Franck Orset, this is MeyerFire University.