Who Else Owns This Loss Course

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When an accident occurs, investigators must determine if a third party, such as a product designer or contractor, may be held liable due to a safety related oversight. This slideshow gives an overview of several real-world investigations and helps viewers evaluate the case for subrogation in each incident.

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Who Else Owns This Loss Course

  1. 1. Who else owns this loss? How to Pursue or Defend Subrogation Claims for Property Damage Losses Presented By: Jeffery H. Warren Ph.D., P.E., CSP
  2. 2. Mannequin Reenactment
  3. 3. Safetythroughdesign®
  4. 4. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion and Fire
  5. 5. Aristotle said in 350 BC Accidents are without cause.
  6. 6. Injury or Fatality Incident
  7. 7. Cause • “The fire occurred when a spark or molten globule fell into the area from the welding operation being conducted on the precipitator above the tank.” • “The subsequent explosion was the vapors igniting and flashing back inside the vapor filled head space of the tank.”
  8. 8. Conclusion • “It is apparent that safeguards to prevent the shower of sparks and molten globules of metal from reaching the flammable vapors in the area around the No. 6 fuel oil day tank were not adequate.”
  9. 9. The Insurance Company of the Welder
  10. 10. Now In another city on another day
  11. 11. Most Property Damage Losses: • are predictable • are preventable • All have A CAUSE! • Most have MULTIPLE CAUSES!
  12. 12. Be Sure To Look at ALL the Switches!
  13. 13. NFPA 921 Guide for Fire and Explosion Investigation 2011 Edition
  14. 14. NFPA 921 Significant features of a Fire or Explosion • Cause of • The fire or explosion • Damage to property resulting from the incident • Bodily injury or loss of life • Degree to which human fault contributed to any one or more of the causal issues
  15. 15. Cause No. 1 • Fire or explosion
  16. 16. T Fire Tetrahedron HeatFuel Oxidizing Agent Uninhibited chemical chain reactions
  17. 17. Cause No. 2 • Damage to Property resulting from the incident
  18. 18. Cause No. 3 • Of Bodily Injury or Loss of Life
  19. 19. Cause No. 4 • Degree to which Human Fault contributed to Cause No. 1, No. 2 or No.3
  20. 20. Several Factors May Be Involved • Fire starts when a blanket ignited by incandescent lamp in a closet • Factors • Lamp hanging down too close to the shelf • Putting combustibles too close to the lamp • Leaving the lamp on while not using the closet
  21. 21. • Cause of fire or explosion? Ignition source Fuel Source Circumstances or human actions that caused them to come together • Cause of spread of fire? • Cause of explosion? • Is there a design defect?
  22. 22. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • No. 6 Fuel Oil • Material Safety Data Sheet Review • Hazards Identification Section • OSHA/NFPA Combustible liquid; however flammable vapors may accumulate in tank headspace. • Flash Point: 150F • Autoignition:765F
  23. 23. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • Fire and Explosion Hazards (MSDS) – When heated to flash point and mixed with air and exposed to an ignition source, flammable vapors can burn in the open or explode in confined spaces. – Flammable vapor production at ambient temperatures in the open is anticipated to be minimal unless oil is heated above it’s flashpoint.
  24. 24. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • Fire and Explosion Hazards (MSDS) • Light hydrocarbons can buildup in the headspace of tanks below the flashpoint of the oil, presenting a flammability or explosion hazard. • Tank headspaces should be regarded as potentially flammable, since the fuel’s flashpoint cannot be regarded as a reliable indicator of the potential flammability in tank headspaces.
  25. 25. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • Standards Research • API Publication 2009 Safe Welding and Cutting Practices in Refineries, Gas Plants, and Petrochemical Plants, Fifth Edition, August 1988 • 1.1 Scope – This publication provides guidelines for safe practices when welding or cutting is performed in refineries, gas plants, or petroleum plants
  26. 26. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • API 2009 (cont’d) • 2.2 Work Location – The work location must be gas free, and precautions should be taken to prevent ignition of flammable or combustible materials. Before welding or cutting is performed above or near oily surfaces, the area should be flushed with water, steam cleaned, or covered with clean dirt or sand, or other precautions should be taken
  27. 27. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • API 2009 (cont’d) • 3.1 Permit Requirements Except in areas specifically designated as safe, such as welding shops, a permit should be obtained before starting any work that can involve a source of ignition.
  28. 28. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • API 2009 (cont’d) • Section 4-Testing for Flammable Vapors A competent person using an appropriate combustible-gas indicator should perform tests for flammable vapor concentrations before hot work is started.
  29. 29. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • API 2009 (cont’d) • 5.4 Work on Outside Surfaces … Hot work should not be performed on one vessel or piece of equipment in a plant unit while other parts of the same unit are in operation unless precautions have been taken to prevent the release of flammable liquids and vapors into the area.
  30. 30. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • API 2009 (cont’d) • 2.4 Flammable Liquid and Vapor … Operators should notify workers engaged in hot work of actual or imminent releases of flammables or other combustibles, such as those from relief valves,so that hot work can be stopped immediately.
  31. 31. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion
  32. 32. Case Study W6105 Analysis of No. 6 Fuel Oil Tank Explosion • The Hot Work Permit Asks: 4. There are no combustible fibers, dusts, vapors, gases or liquids in the area. Tanks and equipment previously containing such materials have been purged. The absence of such vapors has been verified by a combustible gas detection instrument.
  33. 33. INVOLVEMENT Matrix Involvement or problem Tenant Owner Property Manager Sprinkler Maintenance Fire Origin and Cause Sprinkler didn't work Not enough water Primary Action - Party involved caused the problem Secondary Action - Party involved knew or should have known about the problem and taken action to resolve the problem Involved Parties
  34. 34. INVOLVEMENT Matrix • http://warrenforensics.com.s158756.gridser ver.com/wp- content/uploads/2013/01/Investigation- Saves-Money-on-Tank-Explosion-Claim2.pdf
  35. 35. • Which switch caused the loss? • Who is responsible for the loss? • Is there a subrogation case?
  36. 36. •You analyze the loss with your group •Answer the questions •Create a Responsibility Matrix •We’ll discuss •You have 15 minutes
  37. 37. Be Sure To Look at ALL the Switches!
  38. 38. Moat was not tested to check for the presence of explosive gas mixtures Plant Welding Contractor Moat contained No. 6 fuel oil and wood chips, both of which are flammable No. 6 fuel oil vapors vented from day tank into surrounding moat A hot work permit was issued without all of the proper safeguarding measures being performed Safeguarding inadequate to prevent sparks and molten metal from reaching flammable vapors A hot work permit was issued while an adjacent tank was being ventilated Welders were not notified of the release of flammable vapors by the plant
  39. 39. NFPA 921 Analysis of Electric Motor Failing to run on High Speed
  40. 40. Specs The horsepower ratings are for guidance and do not limit the equipment size. When electrically driven equipment furnished under other sections of these Specifications differs from the contemplated design, the Contractor shall be responsible for the necessary adjustments to the wiring, disconnect devices and branch circuit protection to accommodate the equipment installed.”
  41. 41. •You analyze the loss with your group •Answer the questions •Create a Responsibility Matrix •We’ll discuss •You have 15 minutes
  42. 42. Blower motor hp & speeds revised in specs but not in drawings before contract Motor control center change order issued with no accompanying revision to drawings Specs written as to encourage unauthorized design modifications of drawings NIC Electric notified contractor of wire changes. No revisions to drawings received Blower motors installed do not match the drawings nor specifications No. & size of conduit & wire in drawings were inadequate for blower motors installed Electrical subcontractor decided to attempt to redesign the wire & conduit himself Submittals were not prepared prior to performance of the work Wire & conduit not called for in the drawings was installed Engineer General Contractor Electrical Subcontractor
  43. 43. CASE STUDY W4170 Analysis of Fire in Carpet Padding Facility
  44. 44. Safetythroughdesign®
  45. 45. Stop Is risk tolerable? Assess risk Other hazards? Can hazard be eliminated? Can hazard be guarded? Provide warnings, procedures, and training Operate the machine More tasks? Is risk tolerable? Is there a hazard? Identify task Yes No No Yes Yes No No Yes Yes No Yes No Yes No
  46. 46. Risk Assessment Decision Matrix Probability of occurrence Catastrophic Critical Marginal Negligible Frequent Probable Occasional Remote Improbable Severity of Consequence
  47. 47. The Safety Hierarchy is stable Eliminate the hazard Safeguard the Hazard Warn about the Hazard Procedures and training Upside Down is Unstable
  48. 48. Cause classifications • Incendiary • Natural • Accidental • Undetermined
  49. 49. Incendiary Fire Cause • Cause is a deliberate human action in which the person knows the fire should not be set
  50. 50. Natural Fire Cause • Cause is without deliberate human intervention – Lightning – Earthquake – Wind
  51. 51. Accidental Fire Cause • Cause is not a deliberate human act to ignite or spread the fire into an area where the fire should not be.
  52. 52. Undetermined Fire Cause • Whenever the cause can not be determined
  53. 53. •You analyze the loss with your group •Answer the questions •Create a Responsibility Matrix •We’ll discuss •You have 15 minutes
  54. 54. Origin in Filter House Sprinkler didn’t work Sprinkler not inspected Valves not locked open Filter not cleaned Filter in building Not enough water Supply pond drained Isolation valves closed Tenant #1 Owner Property Manager Sprinkler Maintenance
  55. 55. Subrogation • Theories of Liability • Products Liability Case
  56. 56. Theories of Liability • Strict Liability • Negligence • Warranty
  57. 57. To Have a Products Liability Case • Plaintiff must prove the following: • The product was defective when used • The defect existed in the product when it was manufactured • The defect was the proximate cause of the injury to the plaintiff • The specific use of the product that caused the damage was reasonably foreseeable
  58. 58. Types of Defects • Design defect • Manufacturing defect • Marketing defect
  59. 59. Fire Hydrant Case
  60. 60. In Summary
  61. 61. During this session you heard : • Cause first • Responsibility second • An Involvement Matrix may be helpful • Engineers can help you
  62. 62. Involvement Matrix Involved Parties Involvement or problem Tenant Owner Property Manager Sprinkler Maintenance Fire Origin and Cause Sprinkler didn't work Not enough water Primary Action - Party involved caused the problem Secondary Action - Party involved knew or should have known about the problem and taken action to resolve the problem
  63. 63. Most Property Damage Losses: • are predictable • are preventable • All have A CAUSE! • Most have MULTIPLE CAUSES!
  64. 64. Be Sure To Look at ALL the Switches!
  65. 65. Who has the first question?

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