If you live or work near Montgomery County, PA, you’ve likely heard about the fire at SPS Technologies in Jenkintown on February 17th.
The good news is that all 60 employees in the facility escaped safely; however, this fire shows an example of why it’s important to plan for the unexpected.
Emergency Action Plan
The evacuation of a facility is not something that can be done by winging it. OSHA has a requirement that facilities with 10 or more employees have an Emergency Action Plan in place to protect workers from dangers such as fire. Even if OSHA doesn’t require it – it’s an important piece of risk management to have in place to keep your people safe.
By implementing a strong Emergency Action Plan, you can ensure that you have processes in place that minimize the risk of an employee getting left behind in an emergency.
For more info on the Emergency Action Plan, we make resources available at no cost to help businesses in our community protect their employees. Find out more about Emergency Action Plans here.
Common Gaps in Insurance Program
This fire also highlights some important insurance coverages that are often overlooked when businesses are simply “checking the box” of having policies in place.
Pollution Liability
I don’t know if this location had anything particularly dangerous that might have spread in the air or contaminated the ground or local waterways. There’s a creek that runs right behind this facility. Even if there are not hazardous materials being used, there may still be environmental cleanup required if materials get into the local water supply.
Clean up for environmental contamination is incredibly expensive, often takes a long period of time, and can come with long term reputational harm to your business.
Having the right coverage in place can help finance the costs of clean up and potential illness to people in the area.
Civil Authority & Business Interruption Coverage
As the fire continued to burn – and even afterwards – local authorities issued a shelter in place order for one mile surrounding the fire. When a Civil Authority prohibits access to a business within a certain area, businesses may be able to claim loss of business income under the Civil Authority coverage – but only if it’s included in your policy’s coverage.
Many base policy forms include at least some coverage, but it can be significantly limited. With the turmoil int he Commercial Property insurance over the last 4 years, many non-admitted policies may not include any coverage. In many cases, automatic coverage is limited to a waiting period of 72 hours, and only for up to 30 days.
However, this coverage can often be supplemented to reduce the waiting period or extend the period of coverage. As natural disasters continue to increase in frequency and events with major environmental impact (such as the East Palestine, Ohio train derailment), businesses can be easily impacted for more than 30 days.
Checking the Box?
Incidents such as these highlight the need for businesses to do more than simply check off the box of “now we have insurance.” At Stillwell Risk Partners, we don’t just check boxes.
There’s an educational component in everything we do.
We’re always evaluating risk custom to the needs of our clients and make recommendations based on their specific exposures. Our clients may not always purchase all the recommended coverages but they will always know what their options are so they can make an educated decision about their coverage.