Safety routines can help prevent disasters in service department, expert says

John Hyland is president of direct writer for Sentry Insurance, which currently insures more than 3,000 dealerships and automotive service shops. He spoke with Editor Dan Shine about the fire risks in dealerships and how to prevent them. Here are edited excerpts.

Q: Can you give some background on dealership fires and what's happening around the industry?

A: Dealership fires are a multimillion-dollar problem for the industry. We see specific challenges within dealership service centers, where significant amounts of flammable liquids, combustible materials and built-in electrical systems all serve as potential trigger points. The result of these fires cost dealerships their facility and months of interruption while they rebuild. When those operations come to a halt, revenue stops. At some point, customers need their vehicles serviced in the months after a fire, leading them to competitors. You can replace facilities, but it's much harder to rebuild your relationships and customer base.

What are the most common fire risks for dealerships?

Vehicles brought in for service with electrical or fuel-related problems. Staff leave the vehicle unattended in the building overnight, and a spark occurs. Unfortunately, many dealerships aren't aware a problem exists until they get a call that a fire destroyed their facility.

Think of vehicles with electrical issues like a time bomb. They have gallons of flammable liquid wired to an electrical system that isn't working properly. You wouldn't consciously leave a risk like that in the middle of your building, but unfortunately, it happens. It's why we encourage dealers to store vehicles outside overnight.

It doesn't sound like the dangers are necessarily new. Why do you suspect this continues to be such a large risk for dealerships?

Many dealerships haven't experienced a fire yet, which can create a false sense of security. Exposures are constantly changing. Vehicles have more electrical components than ever before. When we're talking with dealers, our goal is to give them the information necessary to identify and manage their risks. That way they can build safety practices that help prevent a large loss from occurring. The key is forming a routine, acting immediately and establishing safety as a must-have in your dealership's habits.

What are examples of safety gaps dealerships might be overlooking?

Do your due diligence. Ask customers if their vehicle is showing signs of electrical, fuel or hydraulic issues. Make sure you flag vehicles with those symptoms.

And then don't leave flagged vehicles in your service area overnight. It's a multimillion-dollar mistake. We also encourage dealerships to disconnect batteries and avoid vehicle charging overnight.

How can dealerships prevent a fire from happening?

It's all about making safety part of the dealership culture. A good place to start is working with your insurer. When we insure dealerships, our safety team walks their staff through risk scenarios and helps them develop a safety program unique to their business. We'll also help dealerships recognize risks, understand loss trends and identify safety gaps. Think of all the essential processes that dealerships strictly adhere to. Is safety one of them?

Dealerships can't follow safety practices occasionally because risks exist all the time. We want to build relationships and establish a mutual trust that we're just as invested in their safety as they are.

What three things can dealerships do right now to protect their service department from a fire?

1. Identify your risks. Check vehicles for electrical, fuel or hydraulic issues.

2. Reduce your risks. De-energize flagged vehicles by disconnecting batteries and cutting off fuel flow.

3. Isolate your risks. Park flagged vehicles outside and at least 30 feet away from anything that could burn, including buildings and other vehicles.