In the aftermath of several large fire claims caused by “casual welding work”, insurers are looking to improve risk management practices by strictly enforcing the use of so-called “hot work permits”. Although hot work permits have been around for some time, the approach to these has tended to be somewhat lax. However, things have changed considerably.
Protection against fires is not only good practice, it’s also a requirement of the Occupational Health and Safety Act.

These vary in their detail but in general include steps such as: 

·       ​Ensuring that the person operating the equipment has been fully instructed in the safe operation and use of the equipment and in the hazards that may arise from its use

·       Clearing the surrounding area of combustible materials

·       Making sure that appropriate re extinguishers are available nearby

·       Checking that the work is properly supervised

·       Obtaining permission from the owner of the building

·       Notifying occupants of communicating (connected) buildings or neighbourhood buildings (or both)

·       Ensuring that leads and electrode holders are effectively insulated and that there are no leaking gas pipes nearby

·       Making sure that effective ventilation is provided and maintained

·       Preferably requiring that at least one other person who has been properly instructed to assist in the case of an emergency is and remains in attendance during operations

While some insurers rely on their general policy wording, which requires insureds to take suitable precautions to limit the likelihood of losses, others are addressing the issue more specifically, even including warranty wording in some cases.

Of course, the important aspect of hot work permits is not the permit itself, given the irony that if a fire does are up the permit is likely to be destroyed anyway, but rather the risk management precautions that are taken, using the permit as a “checklist” to ensure that the required actions are taken.

Insurers are also taking steps to better protect themselves against fire claims and are looking to insureds to take additional precautions as well. 

For example, it would be expected that action be taken to avoid the possibility of a re starting in the first place. This means extra attention to staff training, doubling up on re risk measures and added precautions around electrical maintenance, open measures, smoking controls, stacking, waste control (especially flammable material), etc. Where appropriate, adequate re breaks should be strictly maintained.

Insurers have also stressed the need for documented proof of ongoing assessments/tests on sprinkler systems where applicable, to show that they at least remain in working condition. Extra precautions are usually advised in plant where special fire risks may be present – either due to the particular construction of the building, the nature of the work undertaken on site, or where highly flammable or combustible goods are stored on site.

Perhaps surprisingly, some large cold-storage units can also present an additional risk because of the material used in their construction.

Additional precautions have become extremely important in the drought-stricken Western Cape, where limitations on water supplies mean that other precautions, such as doubling up on hand-held fire extinguishers or installing water tanks, are suggested. This also applies in other areas where water pressure may be low.

For a copy of a Hot works Template, that can assist you in your business, simply visit our website and leave your details.
www.esbrokers.co.za.

Article by Peter Atkinson

FIA (Financial Intermediaries Association of South Africa) national technical portfolio manager