Business Insurance and Sprinkler Maintenance Warranties: What You Need to Know

By Jenny Holly Hansen | WBN News | May 5, 2025

For many business owners, insurance is a lifeline — a way to protect the company they’ve built from the unexpected. But not all policies are created equal, and understanding the fine print can make a world of difference when it’s time to file a claim. One important clause that often goes unnoticed until it matters most is the sprinkler maintenance warranty.

If your commercial property is equipped with a sprinkler system — whether it’s in a warehouse, office, restaurant, or retail space — chances are your insurance policy includes this warranty. Here’s what that means, why it matters, and how to make sure you’re properly protected.

What Is a Sprinkler Maintenance Warranty?

A sprinkler maintenance warranty is a condition written into many commercial property insurance policies. It requires that you, as the policyholder, properly maintain your sprinkler system in accordance with fire code regulations and manufacturer recommendations.

In other words: your coverage depends not just on having a sprinkler system, but on keeping it in good working order.

If the sprinkler system fails during a fire and it turns out the system wasn’t properly maintained, your insurer could deny part or all of your claim — even if the fire itself was accidental and fully covered under the policy.

Why Do Insurers Include It?

From the insurer’s perspective, sprinkler systems are one of the most effective tools for reducing the severity of fire damage. When they’re well-maintained, they can suppress fires quickly and prevent total losses. But if they’re neglected — even unintentionally — they may not function when needed.

To manage this risk, insurers add a sprinkler maintenance warranty to policies for buildings that rely on these systems as a critical part of their fire protection.

What Does “Proper Maintenance” Mean?

Most insurance policies don’t require you to be an expert in fire suppression systems — but they do require you to follow the basics of professional maintenance. That typically includes:

• Annual inspections by a certified fire protection company
• Documented service records confirming that the system was tested and is functioning correctly
• Prompt repairs of any deficiencies or damage
• Winterization procedures if your building is exposed to freezing temperatures
• Notification to your insurer if the system is turned off, disabled, or under repair for an extended period

In British Columbia, maintenance standards are typically guided by the National Fire Code of Canada and enforced by local fire authorities.

What Happens If You Don’t Comply?

This is where many business owners get caught off guard. If you experience a fire and your sprinkler system fails — and the insurer finds it hadn’t been maintained properly — your claim may be reduced or denied. That could mean hundreds of thousands of dollars in uninsured losses.

A few real-world examples of non-compliance include:

• Skipping an annual inspection
• Forgetting to repair a known fault or leak
• Failing to drain and protect pipes in the winter, leading to freeze damage
• Letting the system remain offline without telling your insurer

Even if the oversight was accidental, the result can be devastating financially.

How to Stay in Compliance and Protect Your Coverage

1. Schedule Regular Inspections
   Work with a licensed fire protection contractor and set reminders for annual (or more frequent) checks.
2. Keep Clear Documentation
   Maintain a binder or digital file with all inspection reports, service receipts, and repair notes.
3. Notify Your Insurer of Any Changes
   If your sprinkler system is disabled for maintenance or upgrades, tell your broker or insurer right away. Temporary coverage solutions may be available.
4. Winter-Proof Your System
   If your building isn’t fully heated or parts of it are seasonal, make sure you’ve taken steps to prevent pipes from freezing.
5. Review Your Policy Regularly
   Insurance policies evolve — and so do businesses. A yearly policy review ensures your sprinkler warranty and other conditions still make sense for your operations.

Final Thoughts: Protection You Can Count On

Having a sprinkler maintenance warranty in your policy isn’t a trap — it’s a reminder. It means your insurer is assuming that the most powerful fire suppression tool in your building will actually work if needed.

And that’s good news — because it gives you peace of mind, not just that you’re covered, but that your business has a better chance of surviving a worst-case scenario.

As your broker, my role is to help you not just find the right policy, but understand what’s inside it. If you’re unsure about the terms of your coverage or want to review your building’s fire protection compliance, I’m here to help.

Because when it comes to protecting what you’ve built, clarity is just as important as coverage.

Let’s Keep Talking:

Jenny is a business insurance broker with Waypoint Insurance.

She is also a business development consultant with Impresario Partners, helping Canadian Business expand overseas.

She can be reached at 604-317-6755 or jholly-hansen@wbnn.news. Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  Connect with Jenny at BlueSky: https://bsky.app/profile/jennyhollyhansen.bsky.social

Let’s Meet Up:

Jenny Holly Hansen is a cohost with Chris Sturges of the Langley Impact Networking Group. You are welcome to join us on Thursday’s from 4pm to 6pm at: Sidebar Bar and Grill: 100b - 20018 83A Avenue, Langley, BC V2Y 3R4

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