Creighton Engineering Inc.s fire risk management business is ablaze, says company President Scott Creighton.


From 1996 until 2004, Creighton Engineering completed about a dozen risk-engineering projects in Washington state, he says. Since 2004, its range has increased, and the company has done work for 75 to 100 clients in Washington, Idaho, Oregon, and Montana, Creighton says.


Creighton Engineering designs fire systems for buildings such as the new 132,000-square-foot Ambassadors Group Inc. building near Spokane International Airport. The company also provided risk engineering, a specialized niche of the fire protection consulting firms business, for that building, suggesting modifications to the fire system design that reduced the property-loss portion of the buildings fire insurance coverage by about two-thirds.


Risk engineering is used to obtain the lowest possible fire insurance rates through effective spending on fire-protection system installations or improvements, Creighton says. For a cost of between $500 and $5,000, the company evaluates both planned new construction and other buildings for potential improvements that can save money on insurance over time.


Fire risk engineering now represents about 25 percent of the companys $500,000-a-year business, up from 2 percent three years ago, Creighton says. The rest of its revenue comes from other fire-safety engineering and consulting areas. He says the company will likely add another employee or two this year to its staff of six as a result of growth in that niche field.


He attributes the growth in large part to the addition in 2004 of project manager Robert Olson, who acts as a salesperson and liaison with insurance agents. Additionally, the group has expanded its code expertise to the fire codes of the other Western states, he says.


On top of the expansion in its own knowledge base, Creighton says it has taken the company awhile to figure out how best to communicate the benefits of risk engineering to prospective clients, who he says typically start realizing savings on insurance within three to six years.


We knew what we wanted to do, we knew what we could do, but we were clumsy, he says. Creighton says what his company does is help building owners know what their options are.


Olson, who has worked in the insurance business for about 14 years, says he usually can look at a potential clients insurance rates and determine right away if Creightons services could lower its rates.


He says that in some cases, a client already may be receiving a deeply discounted rate, so the potential gain is negligible or doesnt justify the expense of fire-system upgrades. Creighton estimates that about 10 percent of the companys risk engineering clients end up not changing anything.


Olson says that although the company focuses on fire rates, there frequently is a trickle-down lowering effect on clients other insurance rates.


About half of the risk engineering the company does is for new construction, and the remainder for other buildings that may have errors in the bureaus initial point rating or might be able to obtain lower insurance premiums by upgrading fire-protection systems or making sometimes simple changes.


The baseline rating, used by insurance companies as a starting point to determine rates, is arrived at through a point system. The points are determined by an insurance bureau, such as the Washington Surveying and Rating Bureau here. The bureaus are nonprofit organizations funded by member insurance companies, and exist in most states.


Creighton says the insurance rating bureaus have changed how they conduct their reviews, expediting the rating process by putting most buildings into a classification system rather than conducting individual inspections.


Simply providing corroborating evidence to correct errors of fact that stem from the classification system can lead to large reductions in a companys base insurance rate, he says.


Creighton says that when an owner has invested in good fire protection, its worth asking the bureau to come out and inspect in person, which he says it is mandated to do when asked.


If you are one of those conscientious owners, the class rate is not fair, Creighton asserts.


On one such project, a condo Creighton developed in North Idaho, he realized an 80 percent savings over similar projects there through risk engineering.


He says that his company can provide a valuable check to the insurance system, ferreting out errors and making sure reports are complete. Insurance ratings have become so complicated that insurance agents are unable to review them individually, and often dont even have good access to them, he says.


Creighton says his company has a good relationship with the bureaus, which dont have the time to conduct the reviews that Creighton Engineering does.


They just report, we fix, Creighton says.


Often, though a building may comply with local codes for fire protection, it might not meet more stringent insurance industry requirements, causing the building owner to pay higher insurance rates than are necessary, he says. Creightons risk engineers may recommend improvements in such cases, like upgrading a fire-sprinkler system, which could result in a one-time upfront cost that would save money on future insurance rates.


The company prorates its fees over one to three years, Creighton says. In this way, the company takes payments equal to the clients insurance savings, usually creating a zero net cost for its risk engineering services, he says.


Creighton, a Washington State University graduate, started Creighton Engineering in 1986, after working for eight years as a loss-prevention consultant and as head of the fire-protection division of Thomas J. Gerard & Associates, a Spokane mechanical-engineering firm.


Contact Jeanne Gustafson at (509) 344-1264 or via e-mail at jeanneg@spokanejournal.com.