May 2010 Newsletter Article

The Highly Protected Risk (HPR) Category of

Insurance
Author: Geoff Morris
The Highly Protected Risk (HPR) (HPR) insurance rating is a category which is generally
implemented within the mining and chemical industries. The objective of the HPR
category is to ensure the installation (whether it be an alumina refinery, mining facility,
zinc refinery or chemical installation)
installation) minimises the business interruption risk in regard to
potential fires or loss incidents.
The HPR rating requires the management of the site to design and install fire systems to
Factory
ory Mutual Data Sheets (FMDS). Factory Mutual is an American insurance
company which has a set of standards that are considered the worlds’ best practice.
The FM standards include the American National Fire Protection Association (NFPA)
standards.
Factory Mutual have a test facility in the United States which tests and approves
equipment for installation within the fire industry. The testing is a rigorous test to ensure
the equipment (whether it be a fire pump or automatic fire sprinkler system) meets the
appropriate designs for the occupancy in which it is located. If If you compare Australian
Standards to Factory Mutual Standards and constructed an alumina refinery to the
Australian Standards, the comparison would be substantial (to the point where most
potential business interruption losses would not be covered).
To achieve
hieve a HPR rating, the projects scope and specifications must include:

High design and equipment quality standard;

Appropriate statutory engineering codes and standards;

Project design
esign and construction to all appropriate FMDS;

Studies throughout the design
design phase of the project to assess and mitigate risk
through the following:
 Preliminary hazard assessment and formal hazard identification and
mitigation studies;
 HAZOP on preliminary and final design;
 Major hazard facility assessment (includes access/egress study where the
facility is considered a major hazardous facility);
 Business Interruption (BI) and risk assessment incorporating fire study; and
 Project safety management plan.

Contact WCD Contact RiskTech

02 9745 1100 07 3435 5111
www.wcdcomp.com.au www.risktech.com.au
May 2010 Newsletter Article

The HPR rating has a number of categories which include the following:

Excellent;

High;

Fair; and

Poor.
The HPR category whether the rating be a poor or excellent rating), also requires:

FM approved fire pumps;

Excellent fire water system;

Excellent condition monitoring programme;

Fixed installations in areas required to ensure possible losses are reduced;

Emergency services section on site;

A rigorous testing and maintenance regime for all systems installed (fire detection,
fire protection and condition monitoring); and

At least an annual review by independent party to ensure complianceco to the
standards and HPR philosophy.

Disclaimer
This publication is intended as a source of information only. No reader should act on any
matter without first obtaining professional advice.

Contact WCD Contact RiskTech

02 9745 1100 07 3435 5111
www.wcdcomp.com.au www.risktech.com.au