Determination of fire and explosion loss in a chemical industry by fire and explosion index

Background: Fire and explosion accidents cause numerous economical, environmental and human losses in industries. Objective: The aim of this study was to present a new method for fire and explosion loss estimation by virtue of fire and explosion index to determine the premium rate. Methods: This is a descriptive-analytical study carried out in Bandar Imam petrochemical complex in 2006. Initially, the fire and explosion index was calculated in selected process units and the hazard radius, equipment value, and the base maximum probable property damage determined. To determine the actual maximum property damage, the loss control credit factor was assessed. Finally, the days’ outage and business interruption losses were estimated.Data analyzed with DOW fire and explosion software. Findings: The stripper column with 226 F;EI value, actual maximum property damage of about 6.7 million dollars, days’ outage of about 120 days, and business interruption loss of about 89 million dollars was identified as the most critical unit of the factory. The least hazardous unit detected was the Nafta storage tank with 64 F;EI value and actual maximum property damage of about 0.36 million dollars. Conclusion: All factors affecting the fire and explosion risk were shown to be among the indices that are considered as a base for loss estimation. Business interruption losses are higher than actual maximum property damage and these losses are not insured in Iran industries. In this technique, the effects of control measures on reducing fire and explosion losses were considered and the estimated losses could be regarded as a base to determine the premium rate.