Underwriting Agencies of Australia is aiming to increase awareness around the incorrect loading of machinery, which is contributing to significant damage to overhead infrastructure such as bridges.
Michelle Morrissey has witnessed a wide range of insurance claims during her tenure as the National Claims Manager at Underwriting Agencies of Australia (UAA).
Morrissey and her team of ten claim consultants help manage claims Australia wide, which sometimes include complex insurance matters.
One such matter, which Morrissey says is becoming more frequent throughout the industry, is damage inflicted on overhead infrastructure. These incidents commonly involve damage to power lines, bridges, overpasses, and other vehicles.
As Morrissey explains, what began as an infrequent incident has now become an increasingly common occurrence. A pattern that she and her team are keen to disrupt.
“We are quite concerned with this as we have had several recent claims where these incidents seem to be the issue,” she says. “We are also seeing these increase in both severity and frequency.”
Morrissey adds that these incidents are commonly caused by one simple oversight.
“There are some commonalities between the claims, which seems to be due to simply incorrect loading. This affects mostly clients that either have a transportation business, or businesses who engage a transportation business to move their machines,” she says.
Morrissey says damages incurred in such incidents are not limited to the insured machinery, but also impact the infrastructure and other third-party assets and vehicles.
“The reason we are concerned about this is because the potential costs of damages, not just to the loaded asset such as an excavator, but also to the bridge itself, can range anywhere from $500,000 up to $5 million, depending on the structure and what the bridge is used for” she says.
“We have seen examples where operators have used a tape measure to measure their load configuration, but for some unknown reason their measurements have been out by over 800mm in some cases, which is found out only after the load has struck overhead objects (bridges, powerlines etc).
“In some cases, we have seen large liability claims for simple overhead powerlines being struck. The cost of the powerline itself is quite low, however we have seen claims whereby the energy company is seeking legal liability for potential loss of revenue or potential incentive bonuses called Service Target Performance Incentive Scheme (STPIS).Some of these matters have been worth millions of dollars.”
Preventative measures
There are a few obvious factors as to why preventative measures are important – including for injury or death prevention, avoiding loss of assets and also to maintain sustainable insurance for the industry. The greater the loss, the greater are the overall premiums for the industry, or worst still, there’s the risk of insurance exiting the industry as it can no longer support the risk.
Morrissey says there are a few factors that are leading to the inappropriate and incorrect loading of machinery. She says adhering to industry standards for loading heights is an essential prerequisite for machinery transport.
“Operators need to consider different features such as the different arms on an excavator when loading these units. The stowing of machines can sometimes be out of sync with the industry standards,” she says.
“Not loading the machine at a specified angle or loading at the incorrect height also means that the machines are, in some instances, loaded well over specified load heights, causing some machines to impact overhead infrastructure such as bridges.”
Morrissey says there are some measures operators can take to reduce the risk of causing overhead infrastructure damage.
“Business owners need to be aware of their operators’ skillset, as well as making sure that they are training their operators to load machinery in the correct position and in accordance with industry and road authority specifications,” she says.
“Another good practice, which most businesses adopt, is to conduct a travel risk analysis, where they plan the route in advance and check structures such as bridges along the route to make sure that they will be able to safely pass under overhead structures.”
Pre-planning and re-assessment are critical for incident avoidance, Morrissey says. She adds that operators should be encouraged to utilise their experience before completing machinery loading.
“An important aspect of this issue is the training of the operators. If your instinct is telling you something doesn’t look right, then stop where it is safe to do so, re-assess and re-measure,” she says.
The claims process
Morrissey says UAA examines each claim through external independent experts and investigators. Following the completion of the investigation, the matter is then reported to a claim’s expert, as key claims Expert Brittany Annison explains.
“We contract independent experts to complete these investigations and to do loss adjusting. As part of the process, they will go to the site, examine the cause, the extent of damage and take statements from those involved and witnesses. They also take images of the accident where possible,” she explains.
“The experts will then present this information to us as the insurance company, and we overlay the facts with the terms and conditions of our policy.”
Morrissey says the proven claims process undertaken by UAA interprets each case with an unbiased approach.
“Depending on the circumstances, each claim is assessed on its own merits. Our role is to look at these cases from a different perspective, find out why they happened and what preventative measures could have been put in place,” she says.
“In some cases, we identify that our customers are not at fault and through working closely with our customers, we can establish subrogation (recovery) against other liable parties, as opposed to our clients wearing the full liability.”
Peace of mind for asset owners
Factors such as damages rely heavily on the operators’ compliance with industry standards, guidelines from the equipment manufacturers and the law. That is why Morrissey stresses the importance of re-assessing machinery loads to make sure they comply with regulations.
“In some instances, customers might be covered for damages to their own property or machinery, but we have seen some liability cases being excluded by the insurers because the load was heavier or larger than allowed by law or by its specifications. This is something for the business owners to be mindful of as it could leave them exposed to uninsured liabilities,” she says.
“UAA’s competitive advantage is the ability to tailor insurance policies to customer needs and our ability to manage claims for our customers, locally. Our policy also provides many benefits. One in particular is the Owners Protection benefit,” she adds.
Morrissey notes that UAA’s Owners Protection policy can provide an additional layer of protection for asset owners.
“This means that if businesses have operators who are acting ‘rogue’ and the employer is unaware of it, there is an avenue through our policy to provide some peace of mind and cover to the employer. The practice of this benefit will depend on the circumstances of the claim and the application to the policy wording,” she says.
“Our value-added services are to always assist clients by offering risk mitigation concepts into their own business to prevent incidences occurring in the future. Our focus is to quickly respond to our customers’ needs and to manage the facts of a claim with an unbiased view, ensuring to assist our customers in time of need and help them get back on their feet as promptly as possible,” says Morrissey.
This article was originally published in the March edition of our magazine. To read the magazine, click here.
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