TT Talk - Throwing light on warehouse fires

Causes of warehouse fires are many and varied. A startling statistic is that up to half of all warehouse fires are started deliberately. Of course, it is not just the warehouses themselves that are destroyed; it is also necessary to consider potential injuries or death and the contents (both stored cargo and handling equipment).

Whilst the number of fires over the last decade may be reducing, the cost is increasing. Obviously, cost is dependent on each incident, but the scale is breath-taking. One total loss case comprised building loss of USD70 million, contents of USD135 million and handling equipment a mere USD2 million. A more modest claim totalled about USD8 million, 25% of which was business interruption.

Rather than rely simply on the TT Club’s data, it is valuable to look at broader industry information (such as the National Fire Protection Association in USA and the Fire Protection Association in UK) relating to the causes of warehouse fires. Aside from the preponderance of intentionally set fires, the highest risk (typically approaching 20%) arises from electrical failure or malfunction, including arcing. Other recurring risks include ‘hot work’ and even smoking, both of which should be rigorously controlled by procedures. Another risk that must not be excluded from assessment is spontaneous combustion, which tends to be caused by self-reactive chemicals held in storage.

The speed at which warehouse fires spread is frightening – and primarily down to the way in which these structures are built and the nature of goods stored.

  1. Typically, modern warehouses tend to be sandwich panel buildings, because they are big, cheap and light. The problem occurs when they are not protected properly: if a fire does occur the building may be destroyed if not tackled within 15 minutes, exacerbated by the spread of heat causing flash fires. Older buildings may have smaller internal spaces that can restrict the spread of fire, where the contents may become more significant.
  2. The nature of goods in storage is, therefore, a key factor influencing the speed at which warehouse fires spread; shrink wrapping and cardboard are highly flammable and fires spread up vertical surfaces of stacked boxes in seconds. The stacking of theses boxes in back to back rows creates flammable chimneys through which fires spread with breathtaking speed.

There are a number of quick tips which will allow you to improve your risk.

Protecting Against Arson

If we start with intentionally set fires, there are some housekeeping steps, such as looking at your site security, access control, ID checking and vetting of employees, all of which can reduce the risk of arson. Statistics from the US show that more than half those arrested for arson in 2009 were under 21 years old. Unauthorised access through a broken fence and the ready availability of fuel sources such as wheelie bins, pallets etc can be mitigated to prevent casual opportunities. There is, however, one thing that has revolutionised fire investigation and mitigation – CCTV. It has been proven time and time again to aid the reduction of fire losses.

In general, housekeeping is critical. Sometimes the contents of a warehouse would not readily have gone on fire but for debris and the degree to which the fire takes hold may be determined by inaccessibility for fire services, due to imprudent use of defined spaces for storage.

Fire Risk Assessment  

Turning to other fire types, it is recommended that thorough processes are followed. A comprehensive ‘Fire Risk Assessment’ is fundamental, containing accurate building plans, a smoking policy, how fires are to be detected and the alarm raised, and escape route analysis, together with clear documented chains of accountability. It is also worth noting that a focus on every element of the building itself may be comprehensive, but can be fatally compromised if the dynamics of fire risk analysis are not assessed in relation to seemingly minor building alteration, such as the installation of phone lines or insertion of vending machines. In addition, consider unexpected sources of ignition, from your own machinery and fuels to contractors’ tools of trade. From a risk management perspective, remember that the fundamentals of fire risk assessments and health and safety standards are designed to prevent loss of life in buildings, as opposed to loss of the building itself.


A thorough and on-going fire risk assessment needs to be reinforced by appropriate training, ensuring competence, tests/practices and, of course, effective insurance. While these provide comfort and help alleviate the probability of a fire in the first instance, what further measures can be adopted to mitigate loss should the worst happen?

Sprinklers are often considered the be-all and end-all in fire prevention. However, it is not good enough to just ensure you have sprinklers in place, there must be a highly strategic assessment of sprinkler placement, water pressure and water flow, which can make the difference between having a building left in the event of a fire or not. The incentive – the cost of fires in buildings with sprinkler systems is on average 80% less than those occurred in building with no sprinklers in place. 

Other mitigation measures for consideration include the compartmentation of a building, assessment and management of ignition sources, circuit breakers and arc detection. Building fire prevention measures differ from country to country; make sure you are aware of the regulations appropriate to each individual building. Regulations will also require fire breaks as a minimum for the storage of certain cargoes, such as Ammonium Nitrate.

Finally, an independent evaluation of the fire risk can materially reduce your risk, through the identification of trends in losses and common factors of major cases.

[We gratefully acknowledge the assistance in the preparation of this article of Dr Jim Lygate, Principal Investigator at IFIC]

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Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

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