Summary: Electrical fires are common in commercial buildings and can cause millions of dollars in damage. This article explains how to prevent electric fires, what causes them and how to keep your business protected from potential risks by implementing loss control procedures.

All it takes for an electrical fire to start at your business is a spark and a split second. A fire in your business or on your property can be a devastating mix of interruption, property loss, financial loss, injuries and possibly deaths. Fortunately, there are steps you can take on how to prevent electrical fires before they start, protecting your business and employees.

Fires are a constant risk for any business owner, and they take a devastating toll every year. According to the U.S. Fire Administration, more than 103,000 nonresidential building fires were responsible for 85 deaths, 1,025 injuries, and more than $2.5 billion in property losses in just one year. Of those losses, electrical malfunctions were responsible for more than $373 million in damages. The report found that electrical malfunctions caused 18% of all warehouse fires.

Causes of Electrical Fires in the Workplace

The average business has hundreds, even thousands of places an electrical fire could start. Most commercial buildings are full of computers, power equipment, appliances and miles of electrical wiring running throughout. With so many possible hazards, it’s crucial to educate yourself and your employees about the causes of electrical fires and the risks unique to your business.

An electrical fire can start in a variety of ways in commercial buildings. Here are some of the most common causes of electrical fires:

• Faulty Wiring: Unsafe wiring is one of the leading causes of electrical fires. These issues include exposed wiring that can reduce connectivity or produce sparks; overcrowded or older wiring that can’t handle modern-day demands and can overheat; wiring that doesn’t match the circuit amperage; and wiring that is otherwise not in compliance with the National Fire Protection Association’s (NFPA) National Electric Code.
• Outlets: A common place for electrical fires to start are electrical outlets. Using an incorrect outlet or overloading an outlet with too many appliances can cause power failure, sparks, melting and fires.
• Extension cords: One of the most notorious risk hazards for fires is extension cords. When these cords are overloaded, they can overheat, melt wires, cause sparks and start fires. An extension cord can also overheat if run under a carpet. Also, running an extension cord through a doorway, window, wall or ceiling can cause the crimping of the wires and loss of connectivity, leading to sparks and fires. Extension cords should not be installed using nails, staples or tape, and they should only be used for short-term, temporary or seasonal use.
• Faulty or unattended space heaters: Space heaters are often placed too close to items such as clothing, curtains and other flammable materials. Also, they are additionally dangerous if connected to an extension cord as they can cause overheating or sparks that can lead to a fire.
• Light fixtures: An often overlooked danger for fires is faulty light fixtures. A malfunctioning light fixture or using higher wattage bulbs than the fixture calls for can also result in arcing, overheating and fires.
• Faulty or damaged equipment: Equipment that is damaged or not working correctly can cause electrical fires if not addressed immediately.
• Greasy or dusty equipment: Electrical issues stemming from greasy or dusty equipment can potentially ignite a fire or an explosion. Bathroom exhaust fans in apartments and commercial buildings should be inspected and cleaned at least annually to remove dust, grease and grime.
• Static Electricity: We’ve all had the experience of getting a minor shock when touching metal or a light switch, usually during cold and dry winter months. When static electricity builds up a great enough strength, the discharge can cause sparks and even ignite fumes, dust particles, or other flammable vapors.

How to Prevent Electrical Fires

In addition to being familiar with the most common ways a fire can start, it’s a good idea to familiarize yourself with the electrical system in your building. In most commercial buildings, electricity comes into the building through an electrical distribution system, a complex maze of circuits, circuit breakers, fuses, transformers and electrical wiring. Good housekeeping around this system is crucial. Whenever possible, electrical distribution equipment should be kept in a separate room that is clean, dry, well ventilated, temperature-controlled and properly sealed against dirt, dust and critters. Keep the area clear of combustible materials and a BC or ABC rated fire extinguisher handy just in case.

Electrical Fire Prevention Tips

Small business owners and their staff must be well versed in electrical fire prevention procedures. Staff must know the signs of electrical fires and be diligent in all safety processes. Review the recommendations below to reduce the risk of some of the most common causes of electrical fires in the workplace. 

Inspect Equipment

Electrical equipment should be regularly inspected, cleaned, and tested by a licensed electrician. One of the best ways of detecting hot spots before they become big problems is with infrared thermal imaging using a hand-held thermal scanner pointed at the electrical panel. A licensed electrician can perform this kind of imaging. If you’re a larger business, you might even want to invest in your thermal scanner and train employees on how to use it. Equipment to be regularly inspected should include:

• Wiring
• Circuit breakers
• Fuses
• Transformers
• Switchgear, switchboards and panelboards
• Disconnect switches
• Contactors and relays
• Motors and motor controls

Follow Recommended Lockout/Tagout Procedures

Any time you have electrical equipment systems repaired, removed or replaced, it’s crucial to follow proper lockout/tagout procedures to prevent accidental reenergizing and possible injury. This involves putting a strictly controlled lock and tag on the main circuit breaker or disconnect the switch controlling the disengaged equipment to let everyone know that maintenance is underway. Always follow OSHA’s lockout/tagout procedures, including The Control of Hazardous Energy (Lockout/Tagout, Title 29 Code of Federal Regulations (CFR) Part 1910.147.

Train Your Workers to Be Fire-Aware

A staff that is aware of fire hazards, educated about safe habits when dealing with electricity, and trained on dealing with fires is your best first line of defense against a potentially devastating electrical fire. It can mean the difference between a small blaze that’s quickly brought under control and a catastrophic loss of business. Conduct regular fire drills so everyone knows proper procedures for evacuating in case of a fire. Train employees in fire response to know what to do when they see a fire and know how to use fire extinguishers.

Fire Safety and Diligence Is Key

It’s impossible to fireproof your business completely, so you and your staff must remain diligent. Protecting your business from a potentially tragic fire loss requires awareness and an ongoing commitment. Your power grid is what keeps your lights on and your doors open, so protect it with periodic inspection and maintenance, employee training and safe practices.

Loss Control Resources from AmTrust Financial

Having a trusted partner that can reduce risks and educate on topics like how to prevent electrical fires is an important step to take to keep your business and employees safe. AmTrust's Loss Control Department provides a variety of commercial property safety resources designed to keep your business, property and employees safe. We have the expertise and the tools to identify the common hazards facing your operation and can help you decrease risk. For more information about our loss control services, please contact us today.


This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.