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Understanding the True Cost of a Fire to Your Business

Understanding the True Cost of a Fire to Your Business

Posted 7/7/2022

Alt Title: Can Your Business Survive a Fire?


A fire can break out at any time and quite literally take your business down to the ground. And if you aren’t prepared ahead of time, it’s possible that even a small fire could spell the end of your business altogether. Planning in advance could literally save your business.


The Average Cost of a Business Fire


If you study the data from the National Fire Protection Agency (NFPA), you’ll see pretty quickly that it isn’t pretty. Fires are serious – and they wreak total havoc on everything in their wake.  A fire won’t stop for your business. 


According to NFPA, most fires happen at industrial manufacturing properties, merchant and retail stores, bars and restaurants, health care facilities, schools, office buildings, religious properties, and warehouses. Here’s the breakdown:


Business Type

Average Annual Fires

Industrial Manufacturing Properties


Merchant & Retail Stores


Restaurants & Bars


Health Care Facilities




Office Properties


Religious Properties





When you add it all up, that amounts to well over 200 fires at U.S. businesses each and every day. So if you think your business is immune, think again. And wait until you see the costs.


Business Type

Average Property Damage From Fire

Industrial Manufacturing Properties


Merchant & Retail Stores


Restaurants & Bars


Health Care Facilities




Office Properties


Religious Properties





When you analyze the cost of a fire, you have to understand that there are both primary costs (property damage) and secondary costs. While the primary costs are obvious, most people aren’t prepared for the secondary costs (which may actually be more expensive).


Here’s a look at some of the secondary costs that may come into play:


  • Collateral damage. If you’re using a traditional sprinkler or water-based fire suppression system, there’s going to be collateral damage to items in your building. This may include electronics, equipment, paper files, drywall, or other sensitive materials. 


  • Cleanup costs. The cleanup costs associated with a fire are steep. This may include water restoration, smoke removal, debris removal, rebuilding, renovating, and other related costs.


  • Fines and fees. If you’re governed by particular groups, bodies, or organizations that license or certify you to do business, you could receive fines and fees. (OSHA, for example, is quick to hand out steep fines for fires when the business showed a lack of proper safety, control, or oversight.)


  • Business interruption. Take a moment and think about what would happen if your business had to be shut down for, say, 30 days. As an illustration, let’s say your business, which generates $10,000 in sales per day, has a fire at its only manufacturing facility. This fire forces you to pause manufacturing for an entire month. That equals $300,000 in lost revenue. (Not to mention the fact that you have to keep paying your staff over this time.) And guess what? That’s a conservative number. It could take months to get your business back on track after a serious fire. 


  • Reputation damage. Here’s the secondary cost that almost nobody acknowledges. While it might not be a factor for certain businesses – especially if you run an industrial plant that isn’t exactly customer-facing – but for retail stores, bars and restaurants, and healthcare facilities, this is serious stuff. A fire can damage your reputation as a safe and healthy establishment and make people less likely to continue doing business with you in the future. 


So while the property damage from a fire at your office might be somewhere around $27,000, you also have to add up the collateral damage, cleanup costs, fines and fees, interruption to your business, and potential reputation damage when calculating the total cost. No matter what the number is, it’s way too high. 


How to Prevent a Fire From Ruining Your Business


Now that we’ve hit on the financial and ancillary costs of business fires, let’s dig into a few practical pieces of advice you can use to prevent a fire. Here are several pieces of advice: 


1. Know the Risks


It’s important that you know which fire risks are most pertinent for your business. This will largely depend on the type of industry you’re in and the different equipment and materials that are present. (For example, an industrial manufacturing plant faces much different risks than an outpatient surgical facility.)


Generally speaking, the biggest risks are things like combustible materials, hot work (like welding), defective equipment, the presence of flammable gasses and liquids, and vehicles. Understanding these risks helps you keep a more watchful eye and take proactive steps to neutralize them. 


2. Train Your Team


You can’t assign a “safety officer” and expect them to handle every issue related to fire risk and fire response. The reality is that when a fire happens, you need the closest person to the fire to be capable of responding. The only way to guarantee your business is prepared is to train every single employee.


Training should happen both when onboarding a new hire, as well as throughout their tenure with your company. An annual fire prevention and response training is well worth the investment. The key is to make these training sessions hands-on, so that people feel prepared to step in.


3. Equip Your Buildings


Finally, you must equip your buildings with the right fire suppression systems to keep fires contained. If a fire does break out, you want to know that your system will be automatically enacted and that the fire won’t spread beyond its current footprint. 


There are numerous types of fire suppression systems, but we specialize in dry chemical fire suppression systems, standalone fire suppression systems, and other related systems that are quick, reliable, and leave less mess. 


Protect Your Business With CeaseFire


If you’re looking for advanced fire suppression systems that are pre-engineered to quickly and efficiently stop fires on contact, CeaseFire has you covered. We offer a variety of systems, including waterless and clean agent fire suppression systems that are effective at both eliminating fires and preventing secondary damage.


Want to get a quote for your business or facility? Click here to learn more!