A Breaking Problem

Jen Aultman, Risk Management Consultant, CPhT

If an appliance in your home, garage or business had a 25% chance of causing fire – what would you do? Hopefully, the answer is to remove the source of danger. This example could be a reality in your home. Federal Pacific mass manufactured breaker boxes from the 1950’s to the 1980’s which are very dangerous. These boxes do not stop power going to an appliance when it should. This causes heat to circulate between the appliance and the electrical wires in your home. Excess heat can cause a fire.

Unfortunately the price point of these panels was hard for consumers to pass up, and therefore these boxes sold very quickly. Tens of millions were sold during a 40-year timespan. Reportedly Federal Pacific was adding the UL (Underwriters Laboratory) labels to this product which was defective and did not meet the UL requirements. They knowingly and deliberately bypassed safety standards they knew their product did not meet.

These breaker panels create a safety hazard you should not ignore. These panels are generally installed in homes but can also be found in businesses with light electrical needs, such as retail stores or office buildings.

Please check your breaker box if installed sometime between 1950-1990. A few ways to identify if you have this breaker panel include:

• A panel with the name “Federal Pacific” across the front
• Circuit breakers inside the panel labeled “Stab-Lok”
• Circuit breakers that are completely black or circuit breakers that are a combination of orange and black

According to Energy Today, these panels are estimated to cause over 2,000 fires every year. The defect in these panels is their failure to trip the breaker when there is a surge or current overload. This leads to excessive currents of electricity running through wiring which could cause a fire.

The best and only recommendation regarding these boxes is to replace them all together. Replacing only the breakers is unlikely to reduce the failure risk. Testing the panel would cost as much as a new panel and could be dangerous unless testing is provided by an expert, as fires in the building could occur.

How prevalent are these breaker boxes in the United States you ask? There are an estimated 28 million of these boxes still in use. The failure rate of these boxes is approximately 25%.

Federal Pacific no longer exists; therefore, no liability for a defective product exists. The Consumer Product Safety Commission ended its 1983 investigation into this breaker box because it ran out of money. No determination was concluded as to the safety/risk of the product. Many consumer experts call this a cop-out, stating with the number of fires directly related to these boxes, a clear danger is present.

Many insurers are requiring these boxes be replaced before they will agree to carry the risk. Replacement can range from $600-$1,500 depending on the number of breakers your home requires. This price may be less than your deductible if your home does catch fire. Reducing your risk of a house fire by 25% is significant and will be a wise investment for an extended period of time.

For additional information, please contact us at riskmgmt@phmic.com.