$2.6 million. That's not the worst case — that's the average gross loss from a single hot work fire, according to AIG's property risk engineering team. Their published guidance lays out the exact workflow they expect: 60-minute post-work watch, 3-hour monitoring period, completion signatures from three parties. The only tool they provide to execute it? A three-page paper permit tag.
The Cost Per Incident
AIG's property risk engineering data puts the average gross loss from a single hot work incident at $2.6 million. This isn't the worst-case scenario — it's the average. Against that number, any investment in verified fire watch documentation pays for itself immediately.
The Construction Industry Problem
AIG cites a UK Fire Protection Association study showing up to 79% of construction industry fires result from improperly managed hot work. Fire risk more than doubles when outside contractors are involved without facility oversight.
AIG's Own Workflow
AIG lays out a complete fire watch workflow: 60-minute post-work watch, 3-hour area monitoring, single-shift permit limits, and completion signatures from the worker, fire watcher, and issuing manager. The gap between what insurers require and what paper can verify is exactly where most claims fall apart.
Source: AIG Property Risk Engineering