Faulty Sprinkler System Costs Warehouse Until Hylant Discovers a Zero-Dollar Solution
When a property risk advisor is a complimentary part of your insurance brokerage team, you gain critical insights and an advocate for improving your loss control program and bottom line.
Hylant proactively discovered an opportunity to reduce this client’s property risk and lower its insurance premiums. A problem that could have cost tens of thousands of dollars to resolve cost the client nothing.
The client, a $1.2 billion annual revenue warehouse and distribution enterprise, had spent hundreds of thousands of dollars in 2016 to install an early suppression fast response (ESFR) sprinkler system in one of its warehouses. However, the insurer wasn’t giving it credit for the system.
Obstructions are the Achilles’ heel of ESFR sprinklers. Unfortunately, the contractor had installed one-third of the sprinkler heads directly over several-inch-wide bar joists. This rendered the system ineffective, and the insurer considered the warehouse unprotected, which an inspector noted in 2020.
The client hadn’t addressed the issue due to the anticipated cost. Hylant’s property loss control risk advisor went to work to understand the situation and identify an opportunity to reduce risk and save money.
Hylant called together the client, the underwriter and the insurer’s engineer to discuss the issue and its impact on the client’s premium.
Multiple consultants and insurance companies agreed with this finding. But reinstalling the sprinkler system would have cost the company tens of thousands of dollars.
Hylant’s property risk advisor believed that the installer should be held accountable. He wrote a detailed report explaining the nature of ESFR systems and describing the problem. He highlighted the National Fire Protection Association (NFPA) code that applied to the faulty installation and reiterated the importance of adhering to the sprinkler head manufacturer’s installation guidelines. The report also included photos of the incorrect installation and highlighted the financial impact of the problem on the mutual client.
The warehouse owner approached the installer, armed with the report. The installer agreed to address the obstructions at no charge. With the sprinkler obstructions corrected, the ESFR system was now fully compliant with NFPA standards, providing adequate protection to this important warehouse.
Considering the recommendation closed, the insurer reduced the property insurance premium by $18,000 annually.
Results for the Client
The insurer’s recommendation was addressed and closed.
The contractor fixed the problem at no cost to the warehouse owner.
Effective fire protection is now in place.
Working together, the team now proactively considers how choices such as equipment placement might affect safety. Team members prevent problems before they start.
Hylant team members are ready to advise you and help you confidently address your needs.