What is the Issue?
The most common cause of fire in commercial premises is electrical fault.
What is it?
Electrical tests need to be seen as an MOT for your buildings and equipment – failure to keep on top of the documents increases the likelihood of a loss and the chances an insurer will reject the claim payment
What are the regulations?
Over 30 years ago in 1989 the HSE introduced the Electricity at Work regulations. This was aimed at stopping electrocutions at work caused by defective wiring.
The regulations recommend different inspection periods depending on the occupation of your premises. Typically this is 5 years for commercial and 3 years for industrial. Please refer to the comprehensive guidance at http://www.hse.gov.uk/electricity.
What is the relevance to my insurance?
Commercial insurance policies now automatically contain a warranty that the premises are inspected in accordance with BS7671:2008.
The practical effect of this is that in the event of a fire or lightning claim your insurer will request sight of the certificate prior making a payment. We have now had a client’s claim rejected on this basis so we are taking the matter very seriously.
What is the small print?
It is a condition precedent to the insurer’s liability that:
- the electrical system at the premises is inspected and tested by a member of the National Inspection Council for Electrical Installation Contracting in accordance with IEE Regulations for electrical installation and an inspection certificate is issued following such inspection;
- any work specified on such certificate to ensure the electrical installation meets IEE Regulations shall be carried out within the timescales indicated on the inspection certificate;
- the electrical installation shall be further inspected and tested within the timescale recommended on the completion and inspection certificate.
- this condition precedent shall not apply to retail premises or where the insured are not deemed to have responsibility for electrical installation maintenance.
Failure to comply with these requirements may result in a claim being declined or reduced.
What do I need to do?
Book a test
Things to remember:
- The person certifying the premises must be competent and accredited. If you are employ your own electrician on the payroll, your standard policy warranty will need amendment.
- Many suppliers offer a 20% survey as this is allowed for in the Regulations. This is only satisfactory if the whole installation is current and revisited within the prescribed period. We recommend a rolling programme if you have multiple sites or buildings to avoid disruption.
- The certification process is a requirement for both landlord and tenant. Typically a landlord pays for the certificate when first letting out the premises and the tenant thereafter as part of the maintenance of the property.
- The periods are absolute and any recertification should take place inside the period not in addition.
- Keep the certificate digitally or off site should the worse occur.
We can arrange a 30-day extension for you to have the inspection carried out.
The contractor trap:
Electrical contractors can see this a significant revenue generation project. If your certificate is expired, be prepared to undertake the remedial work alongside the certification. We have regular issues with electrical tests being undertaken, an “Unsatisfactory” certificate produced with a list of corrective items – resulting in a quote for the work and time spent to return and find each issue. If these issues are simple like a broken socket it is far more economical to do the work as you go. Insurers are also expecting work to be completed in tight timescales.
All priority 1 and 2 recommendations need to be completed within 30 days of the inspection being completed.
We have seen electricians take 30 days to do the certificate alone!
We may be able to obtain a short extension following the assessment depending on the scope of works required.
Most clients arrange PAT testing. The insurers carry a similar warranty for PAT Testing. A claim payment for fire from a portable device is also dependent on being able to evidence in date PAT testing.
The report needs to take into account how much wear and tear the item suffers. For a monitor in an office, a 3 year period is fine. For an extension cable in a builders van, 3 months could be more appropriate.
Founded in 1987, Castlemead Insurance Brokers is an independent commercial insurance broker, specializing in Corporate Insurance, offering a full insurance broking and risk management service to our clients. Offices in the South-West of England, with clients across the UK, including Scotland and Channel Islands. Castlemead are experts in International Insurance Programmes and are partner members of the GBN Insurance network. We also have an EU subsidiary to aid placing insurance policies with modest EU Insurance risk