Identifying potential hazards and having a plan in place will help your business survive.

By Denise L. Rondini, Executive Editor

A fire at your dealership could not only be disruptive, it could put you out of business for good. Seventy percent of all businesses that experience a fire do not reopen or fail within three years following the fire.

According to Zurich in a Loss Prevention newsletter, “Insurance will generally reimburse you for the building, equipment and stock lost in a fire. The one critical loss they cannot replace ― customers.” If you cannot open quickly after a fire, and therefore cannot service your customers, they will take their business elsewhere.

Zurich believes the best way to keep your business and customers is to invest time and effort in fire prevention.

A good place to start is with a fire risk assessment. To do this you must be aware of the things necessary for a fire: a source of ignition, fuel and oxygen.

For most dealers the most common sources of ignition are electrical equipment, cutting and welding, spontaneous ignition or chemical reaction, smoking and furnaces or hot water heaters, according to Zurich.

“Once the ignition sources have been identified and located within your facility, they must be separated from all flammable and combustible materials,” Zurich advises.

Specifically, the company suggests that you establish a three-foot clear zone in front of electrical panels and transformers. Other experts advise checking all electrical wires and cords for fraying. Throw out all broken electrical equipment and do not overload outlets and circuits.

You also should make sure employees are not using things like space heaters that you have not authorized them to use.

Zurich suggests having a competent electrical contractor perform a regular inspection of your electrical system.

If you are performing cutting and welding operations, try to confine them to their own area, which should be free of combustibles, swept clean after cutting and welding activities and equipped with fire extinguishers.

To avoid spontaneous ignition or chemical reactions, make sure battery charging areas are well ventilated. Zurich says this will help prevent a build-up of explosive hydrogen gas and keep combustible materials away from sources of heat as they can undergo chemical changes that result in a lower ignition temperature.

Flammable and combustible materials provide the fuel that can cause a fire to spread throughout your entire dealership; therefore it is important to institute some control measures.

Suggestions from Zurich include: not using gasoline as solvent, storing gas or diesel fuel outside the building and cleaning spills as quickly as possible.

As for furnaces and hot water heaters, have them inspected prior to the beginning of each winter and do not store cleaning supplies near furnaces or water heaters.

If the state you are located in has not banned smoking, you still may want to consider making your facility smoke free. If, however, you choose to allow smoking in your facility, restrict it to designated areas outfitted with appropriate receptacles for cigarette butts. Your paint and body shops should be posted as “No Smoking” areas, according to Zurich.

You may want to invite your local fire department to your dealership so you can discuss its ability to respond to a fire at your facility. You also could speak with them about your operation and ask them to offer advice on the materials within your dealership that could cause a fire.

Install as many fire extinguishers as needed for your operation and make sure they are inspected on a regular basis. Establish fire escape routes and make sure they are clearly marked. Make sure exit doors are not blocked and that there is emergency lighting over all exits.

Conduct training so your staff will know what to do in the event of a fire and consider holding fire drills to test your dealership’s preparedness.

Consult with your insurance provider to make sure you have appropriate coverage for your building and property. You may want to ask them about business interruption coverage and coverage for data as property.

You also can ask your insurance company to assess your dealership’s fire risk and to recommend fire prevention and protection measure.