Glossary

Commodity Classification

Also known as: commodity class, hazard classification

The fire-hazard categorization assigned to stored goods under NFPA standards -- ordinary combustible Classes I through IV, plus Group A, B, and C plastics -- which determines the required sprinkler design, density, and whether ESFR alone is sufficient.

Commodity classification is central to industrial leasing and insurability because the same building can be adequately protected for one tenant's goods and inadequately protected for another's: a tenant storing Group A plastics (largely unexpanded and expanded plastic products, considered the highest ordinary hazard) may require in-rack sprinklers or a higher-density ESFR design than a tenant storing Class I or II goods such as paper products in cartons, even at identical storage heights. Lease use clauses in modern industrial leases increasingly specify a maximum permitted commodity classification precisely to prevent a tenant from introducing a higher-hazard good than the building's fire protection system and insurance were designed around, and landlords and lenders should require tenants to disclose actual commodity classification, not just a general description of their business, before executing a lease.