Food Industry Risks: Fire and Explosion

With complex processes and flammable materials, fire and explosion risks are ever-present in facilities handling food and beverages. Fires and explosion incidents are the No. 1 cause of corporate insurance losses overall, accounting for $19.5 billion in insurance claims or 21% of the value of all claims during a recent five-year period. Here are some of the food sector risks that may lead to a fire or explosion:

• Cooking equipment: Ovens, fryers, and other cooking equipment can be a significant fire hazard, especially if not properly maintained or operated. Grease and oil buildup increases the risk of a fire, as well as equipment that is not functioning properly.
• Dust and other combustible materials: Food-and-beverage companies often have large quantities of raw materials, such as flour or sugar, that generate dust. Dust can be highly combustible and can easily ignite if not properly controlled.
• Refrigeration equipment: Walk-in coolers and similar equipment can also be a fire risk as electrical issues or equipment malfunction can lead to a fire.
• Improper storage: Improper storage of raw materials and finished products can increase the risk of a fire. Combustible materials should be stored away from heat sources and in a manner that allows for proper ventilation.
• Building and equipment age: Age of the building and equipment can also increase the risk of fire. Outdated equipment may not meet current safety standards and older buildings may not have up-to-date fire safety systems.

With supply chain delays and inflation sending equipment costs higher, no food-and-beverage company can afford business interruption. Every peril facing the food-and-beverage industry can interrupt business. As they clean and sanitize and/or rebuild, they lose production, lose the ability to sell products, and lose market share to the competition. In an industry where most companies run at or above 90% production capacity, losing any time is detrimental.

The Solution: Risk Engineering

In the current hard market, risk engineering has become an essential tool for risk managers in any food-and-beverage company. It helps them understand their full risk profile, stay compliant with laws and standards – and ultimately helps to secure better insurance terms and conditions.

Experienced risk engineers can conduct a thorough risk assessment to identify potential hazards and risks unique to your operations. Once risks have been identified, risk engineers work with risk managers and other company leaders to develop and implement safety measures and procedures to reduce the likelihood of incidents occurring and minimize the impact of any that do occur.

Risk engineers help to ensure compliance with food safety regulations, fire codes, and other appropriate standards, and develop reports that can help communicate the risk profile to insurance markets.

TÜV SÜD Global Risk Consultants has delivered more than 400,000 risk recommendations representing nearly $700 billion in loss exposure reduction. If you’re interested in learning how risk engineering can help your business, contact us now.