When it comes to accidents involving heavy equipment, few makethe neck hairs of investigators stand on edge quite like crane andrigging incidents.

It was just such an event that recently resulted in a fatality.As the accident unfolded, part of the equipment’s heavy frame brokefree and crashed into the cab, killing the operator.

When investigators showed up, they found that the crane hadtoppled forward and was resting with its treads pointingskyward.

“We got out to the site within 24 hours of first notice of thisaccident, knowing that there was a catastrophic accident involvinga crane that turned over lifting a load from the building ”explains Arthur Kirkner, vice president of claims, NBIS, aclaims expert and thought leader inside the construction andtransportation arena.

“From our early investigation, we found that the lift plans maynot have been followed and the supposedly “known weight” of theobject to be lifted was in fact unknown, it was not the craneoperator’s fault and that there were many other deficient variablesdiscovered ,” said Kirkner, who recently paired up with WilliamSmith, executive vice president, risk management, to take a deepdive inside the construction and transportation vertical andtighten their focus on heavy construction equipment and thecomplexities that often surround the realm’s “loss events.”

Together, the two executives— each with extensive experience inthe transportation and heavy construction industries—use the craneexample as a case study to educate NBIS agents on risk managementprinciples and help them to stay up to date on the latest bestpractices as well as government and regulatory changes.

“We consider ourselves a risk management company that supplies alot of information to the industry that we insure,” said Smith, aformer crane operator who’s credited with developing anindustry-acclaimed Risk Management Support System (RMSS) that hasallowed NBIS to set itself apart from other insurers inside theheavy construction sector.

Smith referenced the below diagram illustrating how a riskmanagement plan is the central component of the approach that NBIShas worked to embed across the industry as it serves its agents andtheir clients. Titled “The Risk Management Cycle,” the diagramreveals what Smith says is the philosophy that NBIS seeks toinstill in its agents.

“What you’ll find is that our approach really views riskmanagement as pushing out into the safety and culture, claims,contract work tickets, and the insurance policy,” said Smith, whoincorporated a number of handy checklists within the presentation,including one that agents can use when they are visiting a worksite of a current or future client.

“Take notice of the yard and the equipment, aswell as the shop itself and their attention to record keeping.Consider security: Do they have fencing? Do they have cameras? Dothey have lights?” advises Smith, who encourages agents to makenote of a firm’s ownership structure.

“Sometimes the ‘culture of safety’ is driven by a firm’sownership. You should take note of whether a firm is family-ownedand has been handed down from one generation to the next or ifprivate equity is now involved,” explains Smith, who advises agentsto take advantage of a number of search tools, beginning with thewebsite of the Occupational Safety & Health Administration(OSHA), which enables visitors to conduct an “establishment search”that can quickly reveal any OSHA citations a particular company hasreceived.

“We don’t want to see any more than two serious citations withinthe past 3 years for any one business, because if it’s more thanthat, the frequency reveals something—and we recommend that ouragent work with their client to help them get things right,” saidSmith, who believes much can be revealed by a company’s owninternal knowledge of OSHA guidelines.

“Management and supervisory knowledge of OSHA laws andprocedures is important to companies because that’s what they aregoing to be cited for and measured by when it comes to employeesafety,” said Smith, who also advises agents to be certain toperform additional “CSA searches” using the website of the FederalMotor Carrier Safety Administration (FMCSA).

Using the below checklist, Smith highlighted a number of bestpractices designed to help the client companies of agents mitigateexposures, including having their employees from the CEO on downappropriately trained regarding safety rules and procedures.

• Management & Supervisory knowledge of OSHA laws andrequirements
• Employers should ensure that employees from the CEO on downreceive appropriate training regarding safety rules andprocedures
• Safety rules and procedures should be published, understood,enforced, and accepted by all. (The company and you are protectedby your decisions and actions every minute every day)
• Compliance with safety procedures must be monitored, recordedand documented in a system maintained by the company
• Companies should have a system available to employees toanonymously report unsafe work conditions
• Companies should involve the employees in designing trainingprograms and ensure them that there is no retaliation against anemployee who reports a safety breach in good faith

Offering business insights related to insurance claims, Kirknerbroadened the breadth of the webinar’s discussion as he zeroed-inon the unique complexities of industry-specific claims.

“What we find is that very often it all comes back to the riskmanagement plan, and when we have a claim, we ask the question,‘How do we tweak the plan to minimize the next loss, so that theplan is even better than it is now?,’” explains Kirkner, who saysthat NBIS will send a rapid response and early recognition team toaccident sites and currently employs a number of certified forensicinvestigators.

When an “alert” comes in, Kirkner says, NBIS has an approachthat is unique to the industry and its client base.

“If, for instance, we see the word ‘collapse’along with ‘load’ or ‘rigging,’ our management is alerted and wedetermine what action needs to be taken to address the exposure,”said Kirkner, who adds that the process of internal alerts alsonotifies the underwriter and the broker of the potentialexposure.

Kirkner also supplied a checklist detailing how the structure ofan NBIS Preferred Contract allows agents to further manage riskafter a loss.

“Over the past 18 months, our insureds were involved in variouslitigations in which there was $105 million paid in settlements—andbecause these insureds had preferred contracts in place, they paidzero dollars because we were either dismissed from the litigationvoluntarily or our tender was accepted and someone else paid onbehalf of our insured instead of their policy,” said Kirkner,adding that the firm paid $1.1 million in legal fees over the sameperiod and recouped $510,000 in fees.

Additionally, Kirkner said, certain new standards are bringinggreater visibility into crane operations – such as ANSI B30, astandard that NBIS’s Smith helped to co-develop.

“Generally, in the past if something happened with a crane, thecrane operator was at fault, but the B30 standard really helped todefine the different responsibilities and distinguish between thecrane operator, the rigger, and the lift director, as well as thesite supervision,” said Kirkner, who credits the updated standardwith having saved NBIS $800,000 over the past 6 to 12 months.

So how should agents begin the process of getting more involvedwith their clients? “At the start of the process, ask your clientswhat types of contracts they are being asked to sign when they wantto get on a job site and take a close look at the language that isbeing used on the job ticket or lease agreement,” Kirkner said.

In response to the same question, Smith once more emphasized therisk management plan and how it could become a door-opener for newbusiness with both new and existing clients:

“Take a look at existing clients, take a look at future clientsthat you would like to bring into your business, and begin bytaking a look at their CSA scores. Ultimately, you don’t know whatyou don’t know, but when we partner with agents we begin bysupplying them with the tools that they need to assess a firm’ssafety culture through an inside and outside view of a riskmanagement plan.”

Our program managers and experienced risk managers look forwardto working with you and your clients. Visit www.NBIS.com for moredetails on how to become an NBIS agent and Experience theDifference ™ today.

Click here to view the archived webcast