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What you don't see can hurt you.

That's the lesson of a recent study into the hazards posed by electrical systems in 200 buildings in New York City. The study, conducted by Hartford Steam Boiler Inspection & Insurance Co., found that electrical systems hidden in walls or buried in the basements of large buildings pose great risks of failing or starting fires if not properly maintained.

As a result of these findings, the Hartford, Conn.-based insurer is now examining approximately 12,000 of the buildings it insures throughout the United States to identify those with a high risk of electrical system failures.

"People believe equipment such as boilers and air conditioning units have a high potential for failure because they have moving parts: pumps, belts and fans that wear down and can break," the insurer's report states. "But in their minds, stationary wires and electrical components don't have the same failure potential."

"Just because it's static it doesn't mean it doesn't need maintenance," said Bernie Selig, second vp of Hartford Steam Boiler's technology division.

According to the insurer's report, 75% of all electrical system failures result from a lack of maintenance.

Lack of maintenance, for example, allows dirt and moisture to accumulate in the system, while loose wire connections don't get tightened. The combination causes an overload in the system that can lead to an electrical fire.

"Even modern buildings designed within the past 20 years are vulnerable," the report states.

Of more immediate concern, the survey revealed that 25% of the buildings surveyed needed repairs within 30 days of the inspection. "Many of the conditions were public safety hazards, with the potential for fire and loss of life," the report stated. An example cited was a building in which a sewer pipe was leaking, with water flowing through the main electrical switching box carrying 4,000 volts.

The remainder, about 75%, got warnings about less-critical problems, such as loose or dirty wiring. "Hardly any buildings had no recommendations at all," Mr. Selig said.

Risk managers can take several steps to minimize the risks of an electrical-related loss damaging their business.

To protect electrical equipment from power surges caused by a system failure, for example, surge protectors should be used with all electrical equipment, such as computers.

A risk manager also can talk with a building's owner or manager and ask how his or her business is protected from damage caused by an electrical loss.

And for those that own their buildings, proper maintenance of the electrical system will eliminate most risks of failure, Mr. Selig said.

"Keep it clean," Mr. Selig advised. "Keep it cool. Keep it dry. Keep it tight. It's all an electrical connection needs. If you have those, you won't have any trouble," he said.

One office building that caught fire in Manhattan provided an example of the potential for problems.

In the building, a contractor made "an illegal modification" of the building's electrical system, Mr. Selig said.

As a result, a gap developed between two key elements of the system, causing an electrical current to jump the gap, an occurrence called arcing. The arcing caused a fire that ultimately closed the building for a month while the electrical system underwent special repairs.

As a result, Hartford Steam Boiler paid $4 million in claims, including

$1 million in claims for tenants' business interruption losses.

That loss and others like it, as well as the frequency of smaller losses, prompted Hartford Steam Boiler to look closely at the buildings it insures to determine the cause of electrical fires. In the past 10 years, the insurer found it had incurred $100 million in losses due to electrical system failures.

After completing the survey earlier this year, the company performed follow-up examinations of the 200 New York City buildings to see whether the building owners had made the recommended corrections. As of April, 75% of the recommendations were performed.

"This is showing a great deal of responsibility on the part of the building owners," according to Mr. Selig.

Based on the New York survey, Hartford Steam Boiler has created a computer model to identify the most at-risk buildings that it insures. The model examines 15 criteria, such as a building's age, size and occupancy, among other things.

Using the model, the insurer is now embarking on a three-year program to investigate these buildings, 12,000 nationwide, to assess the risks associated with their electrical systems. These buildings include office buildings, retail establishments, hospitals and manufacturing plants.

The study is not available to the public.