After a large fire, the first thing a loss adjuster usually examines is not the size of the damage but the state of the fire protection systems when the fire started. When a claim is declined or heavily reduced, the reason very often comes down to one of three things: an impairment nobody reported, maintenance nobody recorded, or an occupancy that had drifted away from its design basis. All three are preventable on the engineering side.
Important: This article is written from an engineering perspective and is not legal advice. Whether a claim is declined depends on the policy wording, any specific conditions, the causal link between a breach and the loss, and the applicable law. Speak to your broker and legal adviser about your own policy.
Why the sprinkler system is part of the policy
For industrial and commercial property, the premium is often priced on the basis that the site is protected. Sprinklers, fire pumps, water tanks and alarm monitoring are recorded in the risk survey as protective measures. Policies commonly contain conditions requiring those measures to be kept in working order, maintained, and reported to the insurer when they are out of service. The system is therefore part of the definition of the risk the insurer accepted. If it fails to operate in a fire, that is the ground on which the insurer can argue it was not the risk it agreed to cover.
Reason 1: Unreported impairments and closed valves
The most frequent finding in post-fire investigations is a closed main control valve or a closed zone valve. Typically it was shut for alterations, a leak repair or an extension, and nobody reopened it when the work finished. Sometimes a pump was switched to manual for tank maintenance and left that way.
The problem is not simply that the valve was closed; it is that nobody knew and nobody reported it. A planned impairment notified to the insurer in advance, with a fire watch in place and hot work suspended, is judged very differently. An unreported closure can be treated both as an increase in risk and as a breach of the protective measures condition.
Typical defect patterns:
- Valves unlocked, with no tamper switch or a tamper switch not wired to the panel.
- The supervisory signal shows at the panel but has been silenced as a "fault".
- Weekly valve rounds are not done, or the form carries only a signature.
- No written tag and permit system for impairments.
Closed-valve patterns are covered in detail in closed valve failures, and monitoring logic in what is sprinkler supervision.
Reason 2: Missing inspection, testing and maintenance records
The adjuster wants to see from the records that the system was maintained. If there are none, the burden of proving maintenance falls on the owner, which is close to impossible after a fire. NFPA 25 and FM Global's ITM guidance call for weekly, monthly, quarterly and annual checks, and for those checks to be recorded. The problem is often not that maintenance never happened but that what happened was never documented.
Common gaps in the records:
- Weekly pump run records exist, but no annual flow (performance) test.
- Main drain tests were done but never compared year on year, so a decline in the water supply went unnoticed.
- No record of alarm valve or flow switch tests.
- No work order showing that defects found (corroded heads, leaks, low pressure) were closed out.
- Records held only by the contractor, with no copy on site, and the contractor's file unavailable after the fire.
For which check is due how often, see sprinkler ITM inspection frequencies and FM Global DS 2-81.
Reason 3: Occupancy or commodity change versus the design basis
A sprinkler system is designed for a specific hazard: a given commodity class, storage height and rack arrangement. The site changes over time. Cartons give way to plastics, block stacking becomes racking, racks get taller, and special hazards such as aerosols or lithium-ion batteries arrive in the warehouse. The sprinkler system stays the same.
After a fire, the adjuster compares the actual storage arrangement with the hydraulic design plate and the design file. Where the hazard exceeds the design, that can be treated as a material change in risk that should have been disclosed. A system that "operated but could not cope" demonstrates a direct link between the change and the loss.
Typical mismatches:
- Storage height above the design value, or reduced clearance between the top of storage and the ceiling.
- A higher commodity class, particularly the arrival of expanded plastics.
- A move from block stacking to racking without addressing in-rack sprinkler requirements.
- Offices or production areas turned into storage.
The logic of commodity classification is explained in NFPA 13 commodity classification. If a change is planned, screen it first with the NFPA 13 hazard classification tool and, for storage, the ESFR suitability checker, then consult the designer and the insurer.
Prevention: a table for facility managers
| Risk | Preventive practice | Evidence to keep |
|---|---|---|
| Closed valve | Lock valves open or connect them to electronic supervision; carry out weekly valve rounds | Valve round sheets, supervisory signal test records |
| Unreported impairment | Written impairment procedure, tag system, insurer notification and fire watch | Impairment permits, notification correspondence, restoration test records |
| Missing ITM records | An ITM programme to the standard; work orders raised and closed for every defect | Dated, signed test sheets, pump curves, work orders |
| Drift from the design basis | Engineering review before any change of use, commodity or storage arrangement | Management-of-change records, current design plate and drawings |
| Lost records | Keep copies off site and in digital form | Backed-up archive |
Management of change: the cheapest insurance
The common thread in all three reasons is a change on site that was never reflected in the fire protection. One simple rule removes most of the risk: any change to storage arrangement, commodity, compartmentation or the protection system itself is approved by the person responsible for fire protection before it is carried out. The approval form should ask:
- Does the change affect the hazard class, density or area on the design plate?
- Will any valve be closed or pump taken out of service? If so, has the impairment procedure been started?
- Does the insurer need to be notified?
- Which test will confirm the system has been restored when the work is complete?
The impairment process is set out step by step in fire protection impairment management, and the particular risks of building work in fire risk during refurbishment.
Frequently Asked Questions
Is every claim declined if a valve was closed at the time of the fire?
No, there is no automatic outcome. It depends on the policy conditions, whether the closure was notified to the insurer, the interim measures in place and how far the closed valve contributed to the loss. A planned impairment that was notified and managed is judged very differently.
How long should ITM records be kept?
NFPA 25 sets retention periods for records and expects some original acceptance records to be kept for the life of the system. Confirm the current periods in the edition in force and your insurer's conditions; in practice, keeping records digitally for the life of the system is the safest approach.
We changed the products stored in our warehouse. Do we need to tell the insurer?
If the change increases the fire risk (a higher commodity class, taller storage, racking, plastics or aerosols), policies generally require notification. Get an engineering review first, then confirm the notification requirement with your broker.
The sprinklers operated but did not control the fire. Can that be a reason for declining a claim?
If the system was built to a design basis that no longer matched the actual hazard on site, and the change was not disclosed, the adjuster may treat it as a material change in risk. That is why the design plate and the real storage arrangement should be compared regularly.
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Download MEP Calc on the App StoreNFPA 25 (current edition) · NFPA 13 · FM Global DS 2-81 · General insurance practice. This article is not legal advice; consult your broker on policy conditions. The findings here are typical defect patterns, not an account of events at any particular site.