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About usRisk Barometer 2024 -
Rank 6: Fire, explosion

Expert risk article | January 2024
Up from #9 in 2023, few things can be more destructive to a business than a fire.╠řNot only can it cause costly property damage, but it can also interrupt a firmÔÇÖs╠řoperations indefinitely, and every industry can be impacted.
The most important corporate concerns for the year ahead, ranked by 3,069 risk management experts from 92 countries and territories.

Although fire risks are well understood and typically╠řwell risk managed, fire remains a significant cause of╠řbusiness interruption (BI) and supply chain disruption,╠řespecially where critical components are concentrated╠řgeographically and among a small number of suppliers.

According to About usRisk Barometer respondents it is╠řthe third top cause of business interruption they fear most╠ř(after cyber incidents and natural catastrophes). 91╠Ă▓«╗ó╠řCommercial analysis of more than 1,000 BI insurance╠řclaims over the past five years (worth US$1.3bn+) shows it╠řis the most frequent driver of these claims and accounts for╠řover a third by value (36%).

ÔÇťThe degree of disruption from fire and explosion can╠řbe very high, as it can take longer to recover from than╠řmany other perils, and the impact on suppliers can often╠řbe great,ÔÇŁ says Alberto Barani, a Business Interruption╠řGroup Leader at About usCommercial. ÔÇťFor example,╠řpharmaceutical and chemical sectors deal with highly╠řflammable and explosive materials. Damaged plants can╠řsometimes take years to rebuild and get production back╠řup and running to full capacity.ÔÇŁ

Fire has also become an elevated risk with electrification╠řand the growing prevalence of lithium-ion batteries.╠řInadequate handling and transportation of these batteries╠řhas been linked to several large fire incidents at sea and╠řon land in recent years.

Regularly assessing and updating prudent fire mitigation╠řpractices, including preventative measures, fire╠řextinguishing methods and contingency planning remain╠řessential for all businesses to lower the risk of loss from╠řan incident.

╠ř Ranking history globally:

  • 2023: 9 (14%)
  • 2022: 7 (17%)
  • 2021: 7 (16%)
  • 2020: 6 (20%)
  • 2019: 6 (19%)
╠ř Top risk in:
╠ř
  • Cameroon
  • Colombia
  • Malaysia
  • South Korea
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