A sudden increase in electrical voltage in a building’s electrical system or in the electrical grid can cause a power surge. Power surges can be caused by various external events, such as lightning strikes, changes in electrical demand or power line switching. These surges can also stem from internal factors, such as faulty wiring, malfunctioning appliances or the startup of high-power-use equipment (e.g., heating, ventilation and air conditioning systems). To mitigate these risks, businesses should adopt strategies that can help shield them from the impacts of such events.
How Do Power Surges Impact Businesses?
Power surges can damage expensive equipment and lead to costly business interruptions. According to the Electrical Safety Foundation, the average per-event cost of downtime caused by a power surge is $130,000. Additionally, these events can cause reputational damage and erode trust with clients and partners.
Tips for Businesses to Protect Themselves Against Power Surges
Because power surges have the potential to cause significant financial and reputational harm, businesses should take the following steps to reduce the likelihood of them occurring:
- Perform risk assessments. Since power surges can spread throughout an electrical system and damage connected devices, businesses should work to identify potential power surge sources and take steps to ensure power surge protections are in place.
- Conduct regular electrical inspections and maintenance. These measures can allow businesses to identify and address potential issues before they create power surges.
- Educate and train employees. Knowledgeable employees can help businesses prevent power surges, and their awareness of protocols of how to respond following a power surge can minimize damage.
- Ground and bond electrical systems. Grounding and bonding electrical systems can help businesses ensure they work properly.
Additionally, businesses can use surge protection devices to divert excess voltage away from sensitive equipment, and an uninterruptible power supply can provide a temporary power source during surges or power outages to allow for safe equipment shutdown. It’s essential for businesses to follow the manufacturer’s instructions when using these devices.
Commercial Property Insurance and Power Surges
Even if preventive measures are taken, power surges can still occur. Commercial property insurance and appropriate endorsements can help businesses cover the resulting financial losses. For example, equipment replacement coverage can help pay for repair or replacement costs of damaged equipment, business interruption coverage can compensate for lost income if a power surge causes a temporary closure and spoiled inventory coverage can reimburse the cost of spoiled food or other products that result from a power outage. A licensed insurance broker or agent can help businesses secure the coverage that best suits their needs.
According to the Electrical Safety Foundation, 60%-80% of power surges originate within facilities; they are typically caused by large electrical loads switching off and on.
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