Remind your auto recycler clients of fire risks and best practices to keep their claims low
Producer, if you have clients in the dismantling industry, remind them of auto recycler fire risks and how they can best mitigate the possibility of fire onsite. Fires continue to be the primary loss leader for operations in the automotive recycler industry. Accidents happen, but with the proper precautions, auto recycling operations can greatly reduce the likelihood of incurring a large loss.
We recently read an Automotive Recycling article that interviewed auto recycler owners who experienced a large losses due to the use of a cutting torch in a dismantling area and other causes. These businesses suffered not only severe to complete building losses, but in one case, serious injury to their employee. The owner stated, “The most important thing in my opinion is for recyclers to realize that torches have come and gone in our industry.”
He added, “I would advise you to really look at your business and other businesses around you to see how you can run your dismantling business without using torches. I would also advise that you put in place all safety protocols in order to prevent not only a fire but other possible hazards that could affect the safety of your employees or your business.”
Producer, we recommend you share these safety protocols to help reduce auto recycler fire risks.
Remind clients not to use cutting torches inside any buildings. Replace cutting torches with reciprocating sawzalls, which don’t produce flames or sparks, whenever possible.
Lithium-Ion Battery Removal
One of the emerging auto recycler fire risks is batteries catching fire. Many recyclers now handle the batteries from electric and hybrid vehicles in the same manner that is used for lead-acid batteries: These batteries are harvested before they reach the shredder stockpile. While the primary reason for this may be recycling them to maximize value – your recycler client is also minimizing his risk of fire. What’s harder to spot, though, is smaller lithium-ion batteries that may be present in a cell phone left behind in the vehicle.
Recyclers are concerned as to how some of these batteries may react to conditions found in scrap metal stockpiles. Toward the middle and bottom of these stockpiles, temperatures may reach high enough to cause lithium-ion batteries to overheat, smolder and cause a large fire. Experts urge shredder operators to avoid building large stockpiles, so that if a fire occurs, the piles are small enough to be torn apart for the fire to be put out.
Remind your clients to have safety and fire training procedures in place to help mitigate auto recycler fire risks. Many associations offer safety and fire courses for your client and all employees. Be sure they’ve implemented fire extinguisher training for all employees and have an adequate amount of regularly inspected fire extinguishers throughout your facility. The more the merrier; as one auto recycler said, his team was able to use 50 extinguishers to at least contain a blaze until the fire department arrived.
We recommend the fluid recovery storage not be connected to the dismantling building, but instead located in a separate building. Empty any portable fuel tanks/carts properly at the end of every business day into UL approved tanks for storing.Good housekeeping allows for fire trucks and support vehicles to easily get close to the area in the event of a fire. This also minimalizes potential fuel sources that could allow a fire to quickly spread beyond the initial area. Doors that connect buildings should be closed to prevent fire from spreading.
Business Planning and Insurance
Of course, you’ll want to help your clients reduce auto recycler fire risks by making sure their property is insured adequately, as they add new equipment, change operating procedures or increase in size. Help them to realize this isn’t the place to cut corners and budgets: Carrying the correct amount of insurance is crucial in the event of a loss, as it helps them get up and running again more quickly. Help them create a video and photo record of their building and contents. Said one recycling business owner quoted in the article whose business suffered a fire, “It’s difficult to remember all the tools, details and such that are contained in each room. Yet, that is necessary in submitting the correct claims and rebuilding your facility.”
He went on to say, “Having a business continuity plan in place in the event of a fire or other disruption to your operations is crucial. If we had not had any other locations to place the employees and continue payroll and other functions, we would have gone out of business. The fact that we had multiple locations helped us to weather it.”
Your client’s business continuity plan includes files safe-keeping, a communications plan and much more. Review earlier blogposts on business continuity plans or back-up plans. Although addressed to insurance agency owners, both include tips and guidelines that will be valuable for your recycler clients.
For additional information on loss prevention available to your auto recycling customers, please contact your Arrowhead Underwriter.