Articles - What fire claims reveal about modern risk interdependencies

By Richard Toomey, vertical market manager, UK and I, LexisNexis Risk Solutions

A single location may sit within a dense network of dependencies — neighbouring businesses, shared buildings, transport infrastructure, utilities and heritage assets. As a result, traditional, isolated risk assessments are increasingly insufficient, and insurers need to adopt location-centric, interconnected approaches to assessing fire and property risk.

A shop fire can expose several key interdependencies that influence the scale of loss:

1. Historic Buildings - Is the affected property part of a heritage streetscape? Fires in older buildings can spread quickly due to timber structures, limited compartmentation, and complex layouts, amplifying both safety risks and economic impacts.

2. Transport Infrastructure - The temporary shutdown of a train station due to a fire can trigger national-scale disruption. Even a short-term closure affects commuters, tourism, logistics and regional commerce.

3. Adjacent Businesses and Shared Structures - Modern urban centres often have tightly packed commercial units, shared roofs and interconnected utilities. This increases the probability that a fire spreads or requires full-building evacuations, business interruption claims and structural assessments long after the fire is contained.

4. Emergency Access and Urban Density - The ability of fire services to gain access in congested city centres is a critical variable that shifts the risk profile dramatically, especially where multiple ignition hazards exist.

Improper charging practices, such as the use of mismatched cables or overnight charging, can be a common cause of battery failure and thermal runaway.  Furthermore, retailers often store large quantities of vape devices or batteries together. A failure in one unit can ignite others, rapidly intensifying an incident.

The result is a rising fire threat not just to the premises selling vape products, but to the broader built environment surrounding them.

Disposal of vape products presents another new and growing hazard. The sustainable waste management company, Biffa’s “zombie batteries” warning, reinforces the scale of the issue, with batteries responsible for over 1,200 fires in the waste sector from 2023 to 2024[ii]. This equates to more than three fires every day. Nearly half were caused by lithium-ion batteries, with vapes the biggest culprit.

Geospatial data visualisation enables insurance providers to visualise interdependencies as part of a swift quote process. They can understand exactly what surrounds any given location — down to neighbouring businesses, traffic density, footfall, historic sites, public infrastructure and utilities.

Insurance providers can also identify compound risks, pinpointing properties where certain business types intersect with high-value or vulnerable surroundings. They can even calculate how fire might spread from building to building in an urban location. This enables the Estimated Maximum Loss and Potential Maximum Loss can be calculated based on ‘live’ data.

 By incorporating high-resolution, up-to-date location intelligence into underwriting, insurance providers can improve risk selection, support more accurate pricing and strengthen risk mitigation strategies across their commercial property portfolios.  

For insurance providers, this means embracing data-driven, contextual intelligence as the core of risk assessment. In increasingly interconnected urban environments, understanding where a risk exists is just as important as understanding what the risk is.