The objective of the work is to establish and apply a methodology for evaluating the total benefits and costs related to fire protection features in buildings. An important component to reducing economic loss from fire is the ability to measure this loss. The work focuses on identifying the various dimensions of the economic impact of fire. It also seeks to measure these dimensions so that the cost of fire prevention and other interventions can be weighed against their benefits.

Specifically, the project addresses four tasks: (i) literature review on methods to measure costs and losses from fires, and methods for cost-benefit evaluation from fire protection features in buildings, (ii) critical analysis of the identified methods including the data needs, advantages and limitations, (iii) recommendation of a holistic calculation method for evaluating the total benefits and costs related to fire protection features in buildings, and (iv) presentation of five case studies.

Based on the critical analysis of the literature, the recommended methodology for cost-benefit analysis is based on a present net value (PNV) evaluation. The evaluation balances the costs of fire protection features with the anticipated averted losses over the building lifetime from the presence of these features. The evaluation of costs includes cost of installation and on-going maintenance. The evaluation of averted losses is based on the expected beneficial impact of building fire protection on property loss, human loss, and indirect loss in case of fire. Estimation of fire losses may rely either on statistics or on a combination of statistics and predictive (structural fire) modeling.

The methodology provides a systematic framework to investigate the issue of cost effectiveness of investments in fire protection features. It can be applied to a class of buildings (e.g., single family residential buildings in a certain area) to support rational policy and decision making. In this case, the costs and fire loss evaluations are averaged for a representative building prototype. Alternatively, the methodology can be applied to a specific building and investment decision. This could be the case, for example, to analyze fire protection investments in a particular manufacturing location where specific occupancy-related hazards and processes require specific evaluation. The costs and fire loss in the methodology are then evaluated for this particular case.

The five case studies cover a range of building types and fire protection features. They are used for demonstration purpose and their outcomes should not be generalized to draw conclusions on effectiveness of particular fire protection measures for broad classes of buildings. Importantly, sensitivity analyses are provided to illustrate the effects of varying input data on the present net value. The sensitivity studies show the importance of input data in evaluating the cost-benefit analysis of fire protection measures. Through these sensitivity analyses, the methodology allows evaluating the robustness of the cost-benefit evaluations. The code, which is made available through the Foundation, allows users to input their own data in order to run calculations for their specific applications. The results of such evaluations can support decision making for policy makers, insurance companies, and individual building owners.