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Latest fire law puts property managements in the hot seat

PROPERTY management companies must accept liability for fire damage in residential areas if a neighborhood's fire control facilities don't meet requirements or if fire trucks find their access blocked under the new Fire Control Law of China which came into effect on May 1.

Previously, some property managements denied liability, saying there was nothing in contracts covering fire control facilities, the city's fire authority said yesterday.

Victims can now claim compensation from property management if a fire truck's access is blocked. Property owners are also entitled to claim from developers if there is a lack of appropriate fire control facilities, officials with the Shanghai Fire Control Bureau said. They also wanted residents to report property management companies who failed to maintain such facilities.

The law also encourages public venues to insure themselves against fires so that more victims can receive insurance payouts after fire disasters, the fire authority said.

About 2,000 hotels, restaurants and shopping malls in the city have signed public liability policies since 2008, the city's fire authority said.

"All the over 40 branch hotels of Motel 168, a budget hotel chain in Shanghai, took out the insurance, which is a good example," said Zhong Wenbin, an official with the bureau.

According to China's fire law, it is the companies who own public venues who should take the responsibility to compensate victims in the event of fire. "But in many cases, companies suffer economic loss and victims fail to receive compensation from companies," said the bureau's Zhou Meiliang.

In Shanghai, public liability policies against fire offer a maximum cover of 60 million yuan (US$8.76 million), while each injured or relative of the dead can receive payouts up to 300,000 yuan.

The bureau is talking with the Oriental Pearl Tower, Shanghai World Expo venues and Jin Mao Tower about insurance, officials said.

"When the time is right, it's possible that fire insurance will become compulsory," Zhong said.


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