Lessons Learned

Electrical surge disrupts office operations

Power surges can strike without warning, causing widespread damage to critical systems and infrastructure. Without proper protection in place, a single surge event can lead to costly repairs, operational downtime, and business disruption. The impact of this risk became clear during a loss at a commercial office building where the absence of surge protection contributed to significant electrical damage.

industrial electrician in orange safety uniform and blue hard hat inspecting electrical control panel while using a digital tablet in a factory setting

Following a failure of the utility provider’s step-down transformer, a 480V/1200A electrical switchboard within the building experienced a severe arcing event. The switchboard, responsible for distributing power to key systems including rooftop HVAC units and sump pumps, sustained extensive damage. The arcing also triggered a surge that affected multiple downstream systems.

As a result, the building’s HVAC systems were rendered inoperable and sump pumps failed. To maintain operations and protect the facility, the insured brought in a rental generator and temporary air conditioning units while repairs were being completed.

The technical investigation confirmed that the arcing originated in the aging switchboard, which had been in operation for over 50 years. The breakdown was traced back to the utility provider’s transformer, which was replaced shortly after the incident. The lack of surge protection between the utility feed and the building’s main distribution panel allowed the electrical surge to travel unimpeded, causing widespread damage.

Loss prevention

Power surge events are a leading cause of electrical breakdown and can result in substantial business interruption. To reduce the risk of similar losses, the following best practices are recommended:

  • Install surge protection devices (SPDs): An SPD should be installed between the incoming utility feed and the main distribution panel or switchgear. These devices divert excess voltage to the facility’s grounding system, protecting downstream equipment from surge-related damage.
  • Evaluate aging electrical equipment: Electrical panels and switchgear that are over 25 years old may no longer meet current safety standards. Regular inspections and upgrades can prevent failures due to wear, corrosion, or outdated design.
  • Coordinate with utility providers: Understanding the condition and maintenance schedule of utility-owned transformers can help identify potential vulnerabilities in the power supply chain.

While the insured recovered from the loss with minimal long-term impact, the event serves as a reminder that electrical surges can have far-reaching consequences. Proactive risk management—including the installation of SPDs and regular equipment assessments—can significantly reduce the likelihood of such events and ensure business continuity.

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