The fire that ripped through the Monte Carlo Hotel and Casino on January 25 could have been a lot worse in terms of the amount of the resulting insured loss. An expert analysis from international catastrophe risk services provider, Risk Management Solutions, reported that the fire could have caused more damage had it started in a different place in the building and not contained as fast as it was.

According to RMS, This incident is one of many of possible fire scenarios; examining the risk of a fire starting in a guest room rather than the roof in a hotel of similar size and layout to the Monte Carlo when fire sprinkler systems do not function properly, illustrates how losses could have reached $75 million.

“Situations like this are a vivid reminder of the potential for low-probability, large-loss events within the realm of fire risk underwriting,” said Mark Rascio , product manager for the RMS fire model in a release. Rascio also mentioned that tourist spots like the Monte Carlo are vulnerable to steep business interruption costs in addition to building and content losses.

RMS will soon be launching its new account fire model that will provide metrics for risk managers.

Interested in more catastrophe news and in-depth articles? Head over to Claims' catastrophe channel for more information.

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