RETAILING: Shopping Malls Prove To Be High Risk
Recent Western Cape Business News
Over the course of the past few months, Long Beach Mall, Maynard Mall, as well as the Fruit and Veg City and Sportsman’s Warehouse in the Tokai on Main shopping centre in the Western Cape have all recently been shut down for a period after city fire safety inspectors found the fire detection systems and smoke detectors not in working order.
Manuel Chikwanda, senior risk engineer at Cape Town-based Lion of Africa Insurance, says these incidences raise some major concerns regarding the readiness of many businesses to deal with unexpected fire. He says as fire season approaches – especially in fire-prone areas such as the Western and Eastern Cape, businesses need to take the necessary steps to ensure that all fire safety assessments are conducted and that standards are met.
“The cost of non-compliance far exceeds the cost of compliance when you consider the loss of profits, operational delays and reputational damage that occurs when a centre is shut down by the authorities. Businesses must not fool themselves that they are saving money by ignoring fire-safety requirements,” says Chikwanda.
According to Chikwan-da, shopping centres and big retailers should regularly assess their fire safety procedures. This means ensuring that there are approved fire protections in place and provision of safe passage for all people in an emergency. He recommends that a number of bodies, such as the Automatic Sprinkler Inspection Bureau, Fire Detection Installers Association, and Fire Protection Association of Southern Africa can be approached for professional assessment of fire safety.
“Insurance companies and brokers have in-house risk engineering teams that also assist with assessing fire safety adequacy at shopping centres and large retailers,” he says.
According to Chikwan-da, some aspects of fire safety require daily attention. He believes it is these issues that are often neglected by companies because they do not form a part of the organisation’s key tasks.
“Checking that exit doors and escape routes are free of obstacles and work smoothly as well as testing public address systems should become a part of a business’s daily routines. However, a full fire safety assessment should be scheduled for a shopping centre at least once every year,” he says.
Chikwanda says that in many cases business owners are not aware of the insurance implications of not having sufficient fire protection in place. He explains that the contract of insurance places the duty of care upon the insured, which generally encompasses compliance with relevant statutory requirements for prevention of loss, as well as other best practice requirements that could be imposed by insurers.
Not having sufficient fire protection in place could therefore be construed as a breach of the insurance contract, Chikwanda says, and at worst could result in claims not being honoured. “Inadequate fire protection always results in the severity of loss being much higher than it would otherwise have been. This high loss ratio consequently results in an increased cost of insurance in subsequent periods,” says Chikwanda.
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