Zurich warns of rise in warehouse fires

The demand for warehouse space is up due to online shopping, but insurer Zurich says that warehouse sprinkler laws are outdated and should be changed.

Recent research by Zurich reveals that the number of warehouses gutted by fire increased by 42 per cent in the last year. Using Home Office statistics, Zurich found that in 2019/20 the number of warehouse fires stayed steady but the number gutted by fire rose considerably.

The cost of insurance claims has increased across the market.  Zurich claims data shows the average cost of large warehouse fires is £5.9 million

Zurich report that the demand for large warehouses rose massively as retailers responded to the online boom during the pandemic.

Automation, including the use of robots to pick goods has further ratcheted up the risk and costs of warehouse fires. An investigation into the 2019 fire that decimated the Ocado warehouse in Andover concluded that an electrical fault caused a robot to catch fire.

Government rules recommend sprinklers in warehouses larger than 20,000 square metres meaning that many smaller premises do not have this precaution.

Losses have been driven by the demand for same and next-day deliveries which has sprouted an increase in smaller ‘last-mile’ warehouses located closer to, or in, urban centres. These are typically older buildings that pose higher fire risks, says Zurich. 

Zurich cautions that the UK lags behind other countries when it comes to sprinkler rules.

Of the 3,400 warehouse blazes attended by fire crews in England since 2010, half (49%) did not have alarms and just 6% had sprinklers. 

Charles Bush, Zurich’s Head of Property and Energy Claims, said:

“Warehouses underpin the huge and growing e-commerce sector. Against the tens of millions of pounds Britons spend online every day, current sprinkler standards look increasingly inadequate. As well as posing a threat to life, warehouse blazes devastate businesses, send shockwaves down supply chains, and lead to the loss of jobs and productivity. 

“While we’re committed to helping firms of all sizes manage their warehouse risks, and recover after a fire, the government must look to address this issue too.  A failure to make new warehouses more resilient to fire risks damaging Britain’s growing e-commerce economy, and the many jobs and businesses that depend on it.” 

Zurich are supporters of the FPA's Know Your Building campaign which seeks to help building owners and managers, including of high risk properties such as warehouses, to improve their resilience when it comes to the threat of fire. Find out more here.