Public Protection Classification Ratings
Posted March 08, 2021
Regardless of size or industry, it’s crucial for business owners to understand their commercial property’s (or properties’) fire exposures. After all, a fire has the potential to seriously damage or even destroy any type of building or structure. That’s why it’s important for your business to be aware of your community’s public protection classification (PPC) rating.
This rating—which is determined by the Insurance Services Office (ISO)—represents a review of the fire protection services available for the community in which your business’s property is located. PPC ratings not only inform business owners about the quality of fire protection in their area, but they can also influence the cost of commercial insurance premiums.
Review this guidance to learn more about what the PPC system is, how PPC ratings are determined and the value of this rating system in regards to your business.
What Is the PPC System?
The PPC system was developed by ISO to evaluate communities’ local fire protection abilities and incentivize them to strive for improvement in the realm of fire suppression services. This system is utilized in some shape or form in all 50 states, as well as by most insurance carriers.
Put simply, the PPC system uses a rating scale of 1-10. This rating reflects how quickly and efficiently a community’s local fire department would be able to respond to a fire—with a rating of 1 representing superior fire suppression services and a rating of 10 representing a failure to meet ISO’s minimum fire protection criteria. In other words, the lower a community’s number rating is, the more likely their local fire department would be able to successfully extinguish a fire within the area in a timely manner.
It’s also possible for a community to receive a dual PPC rating (e.g., a rating of 7/9 rather than a rating of just 7 or 9). In such a rating, the first number represents the rating for properties in the community that fall within 5 road miles of a fire station and 1,000 feet of a creditable water supply. The second number represents the rating for properties in the community that remain within 5 road miles of a fire station but are located more than 1,000 feet away from a creditable water supply.
In addition to providing a way for communities to gauge their fire protection abilities, insurance carriers can utilize the PPC system to calculate premium costs and determine the insurability of a business. In some cases, a business that’s located within a community with a poor PPC rating could face higher premium costs. Such a rating could also cause some insurance carriers to determine that the business doesn’t meet underwriting guidelines, making them unwilling to provide coverage altogether.
For example, a plastics manufacturing company located in a community with a poor PPC rating would likely be viewed as risky to insure by most carriers, seeing as a fire at the property would probably result in a total loss. However, a plastics manufacturing company located in a community with a quality PPC rating would likely be deemed less risky and receive lower premium costs, seeing as a fire at the property would probably be extinguished quickly and result in fewer overall damages.
How PPC Ratings Are Determined
ISO determines a community’s PPC rating based on how well they score on the Fire Suppression Rating Scale (FSRS). The FSRS utilizes a point system that ranges from 0-105, with 105 being the best (thus earning a PPC rating of 1) and 0 (thus earning a PPC rating of 10) being the worst. Points are awarded based on these categories:
- Water distribution—This includes how much water supply is available in the community, as well as how effective local fire hydrants are.
- Fire department reliability—This entails how many fire stations and firefighters there are in the community, where the stations are located, each station’s hours of operation, the quality of each station’s fire suppression equipment and the type of training firefighters receive.
- Communication systems quality—This includes the effectiveness of fire alarms within the community, as well as the reliability of communication systems between the fire department and other emergency first responders.
- Community outreach—This entails the level of involvement that community members have in promoting proper fire protection practices (e.g., enforcing local fire codes and participating or volunteering in fire department initiatives).
ISO routinely updates PPC ratings by distributing a questionnaire every two years that asks about any changes that have been made to the community’s fire protection services since the last evaluation (e.g., the addition of a new fire station). Based on the questionnaire answers, ISO will decide whether an additional survey is necessary to determine a new PPC rating for the community.
If a community makes changes that may impact their PPC rating and wants to fill out a questionnaire prior to ISO’s scheduled distribution, they can contact ISO directly with their request.
While PPC ratings are not immediately available to the general public or business owners, your business can obtain your community’s rating by contacting your insurance carrier or trusted broker.
The Value of PPC Ratings
Remember that your community’s PPC rating does not reflect your business’s fire protection efforts, but rather the community’s capabilities as a whole. Although your business has little control over the PPC rating for the community in which your property is located, being aware of this rating is critical to understanding your business’s overall insurability and premium costs.
What’s more, your business can use your community’s PPC rating to determine which fire prevention and mitigation methods are necessary to further protect your property. For instance, if your community has a poor PPC rating, investing in robust organizational fire protection and suppression measures should be a top priority.
Lastly, keep the PPC system in mind when expanding or moving your business. Be sure to fully evaluate an area’s PPC rating, associated fire risks and potentially elevated insurance costs before adding another property at a new location or moving your business elsewhere. After all, belonging to a community that offers adequate fire protection measures can provide you with ultimate peace of mind in mitigating a potentially costly property disaster and ensuring the future of your business.
For additional coverage guidance, contact us today.
