Rims Energy Session 2008

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2008 Risk & Insurance Management Conference - Energy Session

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Rims Energy Session 2008

  1. 1. IND 911 – Energy Resources “Navigating the Landscape of Risk” Speakers: Gabriel Lugo Mike Amador Mel Causer Cynthia Vickers Bill Siebenaler April 28, 2008 San Diego, CA
  2. 2. Role Play Insured: Gabriel Lugo Insurer: Mel Causer
  3. 3. Q Market Insurer Advantages A Program Structure
  4. 4. Construction Contracts Risk Allocation & Insurance Issues Risk Allocation & Insurance Issues Bill Siebenaler Bill Siebenaler
  5. 5. Risk Allocation & Insurance – Contract Issues Owner Issues • Are there standard provisions? • What are the fall back positions when contractors cannot or will not comply? • What are the delegations of authority? • What effect will the requirements have on the cost of the project? • What are the local restrictions?
  6. 6. Risk Allocation & Insurance – Contract Issues Owner Issues • What is the business climate? • Is the language too long and complicated? • What is expected of subcontractors? • What type of additional training is available to contract specialists? • What resources are available to help with difficult contracts?
  7. 7. Construction Contracts – Preparation • Identify Key Stakeholders • Define Authorities • Train Decision Makers
  8. 8. Construction Contracts – Preparation • Insurance & Risk Mgmt Key Stakeholders • Procurement • Legal • Project Leadership Authorities • Partners Training
  9. 9. Construction Contracts – Preparation Key Stakeholders • Local vs. Central Authorities • Standardization • Exceptions Training
  10. 10. Construction Contracts – Preparation / Execution Key Stakeholders Authorities • Model Contracts Training • Consistency
  11. 11. Construction Contracts – Risk Allocation Issues Who Should Bear the Risk? • The party providing the service/product ? • The party in control of the work ? • The party in the best position to prevent the loss/accident ? • The party in the best position to manage the financial consequences ? • A combination ?
  12. 12. Construction Contracts – Risk Allocation Issues • Take time to understand the risks − Yours − Theirs − Others outside the contract • Be consistent with underlying contracts • Know your counterparties needs • Be aware of enforceability issues − Anti-Indemnity Statutes
  13. 13. Construction Contracts – Risk Allocation Issues • Typical Allocation Options − Mutual Hold Harmless − Negligence Based − Combination • First Party & Third Party − People − Property − Consequential Loss
  14. 14. Construction Contracts – Insurance Issues • What types and amounts of insurance should be required of contractors? • What should subcontractors be required to carry? • Are there company standard insurance provisions? • What deductibles should be allowed? • What level of self insurance should be allowed? • Will and OCIP or CCIP be used? • What are the options for solving an impasse?
  15. 15. Construction Contracts – Insurance Issues Purpose of Insurance Clauses • Help ensure that transferee has funds available to pay liability assumed under indemnity clause • Can give the transferor some specific rights under transferee’s policies • Specify the types and limits of insurance transferee must buy -- a measure of viability • Can cover some liability not covered by the indemnity • Do not always cover all obligations in the indemnity provisions
  16. 16. Construction Contracts – Insurance Issues • Project Risks & Indemnities – Review the particular exposures and risks related to the contract and how they are allocated in the indemnity and other sections. Make sure all risks are accounted for. • Financial Strength of Contractor - Appropriate limits are determined case-by-case and are subject to compromise. Ask for the higher-end of “reasonable.” • Cost of Coverage – Each requirement carries a cost which in many cases is passed back in the form of a higher contract price.
  17. 17. Construction Contracts – Insurance Issues • Insurer financial strength - Determine what you are comfortable with. If rated, ask for insurers with a high rating from A.M. Best or Standard & Poors • Terminology - Use current insurance terminology rather than obscure legal terms or outdated insurance terms. • Retentions – Allow appropriate deductibles or self insurance based on the financial strength of the contractor and need to support indemnities in anti- indemnity jurisdictions.
  18. 18. Contractor Insurance Limit Guidance • Step 1 – For each type of insurance coverage listed in the model, determine whether or not there are any risks in the project which could be the subject of such coverage. • Step 2 – For each type of coverage for which risks have been identified, determine both the hazardous nature and the potential size of those risks and classify them as High, Medium or Low Risk taking geographical factors into consideration. • Step 3 – Once the risk level, if any, has been determined, select the appropriate base levels of coverage to be inserted into the contract requirements. For large, financially stable contractors, these limits may be changed.
  19. 19. Key Insurance Provisions • Additional Insured Status • Waivers of Subrogation • Other Insurance – Primary vs. Excess • Evidence – Certificates, Policies, etc. • Option to Self-Insure • Option to Purchase for Contractor (OCIP)
  20. 20. Risk Allocation & Insurance – Recap Owner Issues • Are there standard provisions? • What are the fall back positions when contractors cannot or will not comply? • What are the delegations of authority? • What effect will the requirements have on the cost of the project? • What are the local restrictions?
  21. 21. Risk Allocation & Insurance – Recap Owner Issues • What is the business climate? • Is the language too long and complicated? • What is expected of subcontractors? • What type of additional training is available to contract specialists? • What resources are available to help with difficult contracts?
  22. 22. Raffle - IPOD
  23. 23. Building your Construction Placement Michael T. Amador, ARM
  24. 24. RIMS 2008 – Construction Placements Topics Discussed Today… I) Houston, We Have a Project II) Insurance Planning & Technical Data Mania, oops, Mining III) Let the Placement Begin IV) Selected Coverage Issues and Recent Placements V) Energy Market Indicators
  25. 25. RIMS 2008 – Construction Placements I) Houston, We Have a Project
  26. 26. RIMS 2008 – Construction Placements Houston, We Have a Project • Headlines Headlines, Read All About It Super, duper mega amazing zillion barrel discovery !!!!
  27. 27. RIMS 2008 – Construction Placements Houston, We Have a Project – And inside the Risk Manager’s Head he begins to ponder the profound project mysteries such as....
  28. 28. RIMS 2008 – Construction Placements Houston, We Have a Project – Oops, let’s try again…and down the hall in the savvy's Risk Manager’s office, he knows well what may transpire: A discovery is made, we’ll see if it is commercial to develop (A new asset may be constructed or an add-on to an existing asset) Studies and teams formed Front-end engineering undertaken A plan of development Contracting Long-lead items ordered Permitting and licenses obtained Approval process Project Sanction received Construction works begin
  29. 29. RIMS 2008 – Construction Placements Houston, We Have a Project – Oops, let’s try again…and down the hall in the savvy's Risk Manager’s office, he knows well what may transpire: A discovery is made, we’ll see if it is commercial to develop (A new asset may be constructed or an add-on to an existing asset) Studies and teams formed Front-end engineering undertaken A plan of development Contracting Long-lead items ordered Permitting and licenses obtained Approval process Project Sanction received Construction works begin
  30. 30. RIMS 2008 – Construction Placements Houston, We Have a Project – The Risk Manager’s checklist early on…. Where could the development be located ? Who may be the Operator ? Is there a joint venture & a division of interest ? Who are the stakeholders ? Meet & cultivate relationships with key people on the project team Try to determine what type of physical asset the project might be
  31. 31. RIMS 2008 – Construction Placements Houston, We Have a Project – The Risk Manager’s checklist early on….(Continued) Early Risk Assessment: form ideas of what risk characteristics the project may have Begin considering an appropriate risk transfer program Sourcing needed technical data Possible insurance issues including local insurance regulations and service providers Develop a preliminary rough timeline
  32. 32. RIMS 2008 – Construction Placements II) INSURANCE PLANNING & TECHNICAL DATA MINING
  33. 33. RIMS 2008 – Construction Placements Insurance Planning Critical Insurance Issues to Consider - Size of project – Capacity Constraints ? Project Location – Flood & Windstorm Exposure ? Other Operations/Projects in the Area – Aggregation Issues ? Local Insurance Regulations – Local Insurance Fronting Required ? Loss History at the Project Site or Area – How to Market It ?
  34. 34. RIMS 2008 – Construction Placements Insurance Planning Critical Insurance Issues to Consider - Your Joint Venture – What is Their Appetite for Risk & Risk Philosophy ? State of the Insurance Market – Is it in a Hard or Soft Cycle ? Recent Energy Losses – Will they Impact Your Project ? Project Capex Budget – How Much to Insure ? Major Project Contractors - Are they in Good Standing with the Market ?
  35. 35. RIMS 2008 – Construction Placements Planning for Windstorm Coverage in Your CAR Placement
  36. 36. RIMS 2008 – Construction Placements The reinsurance market - the “great divide” .... US windstorm Remainder of portfolio Reinsurers have required Gulf of Mexico cover to be a separate “tower” of coverage, with the rest of the account split… US windstorm
  37. 37. RIMS 2008 – Construction Placements Named Windstorm ActivityAs of April 9, 2008; next forecast May 31, 2008) Forecast by Colorado State University Forecast Parameter 1950- 2005 2006 2007 2008 2000 Ave Act Act Act FC Named Storms 9.6 23 9 14 15 Named Storm Days 49.1 103 50 70 80 Hurricanes 5.9 13 5 7 8 Hurricane Days 24.5 45 20 35 40 Intense Hurricanes 2.3 7 2 3 4 Intense Hurricane Days 5 17 3 8 9 Net Tropical Cyclone 100% 249% 85% 140 160% Activity (NTCA)* %
  38. 38. RIMS 2008 – Construction Placements Named Windstorm Coverage When Considering Wind Risk Transfer - – Do you need it ? – Requesting it will place capacity constraints on your placement – How much do you need ? – Value at risk deductibles: % of value at risk – Coverage trigger: Review definition of Named Windstorm – Major exclusions: Is flooding covered ? – Stand Alone Placement Premium: 2% - 5% of sum insured
  39. 39. RIMS 2008 – Construction Placements Technical Data Preparation
  40. 40. RIMS 2008 – Construction Placements Technical Data Preparation Begin by accepting that gathering a high volume of quality technical data is no longer optional but mandatory to successfully place construction insurance for large projects - especially at the best terms and conditions.
  41. 41. RIMS 2008 – Construction Placements Technical Data Preparation Critical Data Which Will Be Requested - – Latest project budget statement – Insurance application – Hurricane preparedness procedures specific to the project – Fire prevention (hot works procedures, fire brigade training, etc.) – General company overview information – Explanation of how your companies property conservation programs with tie into your contractor’s – Major contractor’s loss experience on large projects – Maximum wind design for the asset
  42. 42. RIMS 2008 – Construction Placements Technical Data Preparation Critical Data Which Will Be Requested (Continued) - – Flood and hurricane action plans specific to the project – Construction Underwriting Report – EML calculations – Detail on the construction process – Delay and Start-Up data if DSU quote desired – Cargo transits – Major Contract (EPC, etc.) Wording – Company & contractor QA/QC procedures and management
  43. 43. Technical Data Preparation – The Engineers Are Coming
  44. 44. RIMS 2008 – Construction Placements III) Let the Placement Begin
  45. 45. RIMS 2008 – Construction Placements Placement Planning General Considerations - – How will the placement be managed ? – Will you conduct a Call For Tender ? – Who will be invited ? – What is your placement strategy? Limits, Coverages, Buybacks – How can you best generate competition ? Brokers, Markets, Placement Structure
  46. 46. Number of energy insurers world-wide 120 100 80 Offshore 60 Onshore 40 20 …no significant changes since 2002 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source:Aon Limited
  47. 47. RIMS 2008 – Construction Placements Placement Planning The Call For Tender - – Develop a Calendar To Attach Cover at the Appropriate Time – Cover Letter Inviting Brokers – Scope of Work – Basic Project Information – Broker Deliverability Instructions – Qualifications – Response on the basis of a desk quotation only… – Form of Proposal – Details Risk Manager expectations of what information Broker will provide related to the policy placement, Broker personnel & experience and the Broker fee. – Broker Award – Confidentiality Agreement – Broker Engagement Letter – Service agreement including indemnities and insurance requirements
  48. 48. RIMS 2008 – Construction Placements Insurable Limits
  49. 49. RIMS 2008 – Construction Placements Placement Strategy - Insuring Limits – Full ECV Versus A Loss Limit The Daddy Big Bucks Project Full Estimated Contract Value (ECV) $ 1,500,000,000 Estimated Premium Calculation 2.5% $ 37,500,000
  50. 50. RIMS 2008 – Construction Placements Placement Strategy - Insuring Limits – Full ECV Versus A Loss Limit The Daddy Big Bucks Project Full Estimated Contract Value (ECV) $ 1,500,000,000 Estimated Premium Calculation 2.5% $ 37,500,000 Risk Manager's Option: Insure a Loss Limit CFT $ 750,000,000 Technical Report Estimated Maximum Loss (EML) $ 500,000,000 Delta Between Loss Limit Option & EML $ (250,000,000) Credits Hoped For - Loss Limit Option 2.5% $ (6,250,000)
  51. 51. Placement Strategy - Insuring Limits – Full ECV Versus A Loss Limit The Daddy Big Bucks Project Full Estimated Contract Value (ECV) $ 1,500,000,000 Estimated Premium Calculation 2.5% $ 37,500,000 Risk Manager's Option: Insure a Loss Limit CFT $ 750,000,000 Technical Report Estimated Maximum Loss (EML) $ 500,000,000 Delta Between Loss Limit Option & EML $ (250,000,000) Credits Hoped For - Loss Limit Option 2.5% $ (6,250,000) Underwriting Response to Risk Manager's Loss Limit Option Option 1: Loss Limit Option $ 750,000,000 Underwriter Loss Modelling EML $ 800,000,000 Delta Between UWR EML & Loss Limit Option $ 50,000,000 Credits Quoted For Loss Limit Option 2.5% NIL
  52. 52. RIMS 2008 – Construction Placements Placement Strategy - Insuring Limits – Full ECV Versus A Loss Limit Decision: Insure Full ECV
  53. 53. RIMS 2008 – Construction Placements Presentation Site Map
  54. 54. RIMS 2008 – Construction Placements IV) Selected Coverage Issues and Recent Placements
  55. 55. RIMS 2008 – Construction Placements Selected Coverage Issues……
  56. 56. RIMS 2008 – Construction Placements Coverage Issues - Offshore WELCAR - Special Conditions for Other Assureds It is a condition precedent for any party identified in Other Assureds definition clause iii. and iv. above to benefit from the Other Assureds status under the Policy that they perform their operations according to Quality Assurance/Quality Control systems(s) which comply with the Quality Assurance/Quality Control provisions passed on by the Principal Assureds through each and every written contract awarded within the scope of insured works as scheduled under the Policy. The interest of the Other Assured(s) shall be covered throughout the entire Policy Period for their direct participation in the venture, unless specific contract(s) contain provisions to the contrary. The rights of any Assured under this insurance shall only be exercised through the Principal Assureds. Where the benefits of this insurance have been passed to an Assured by contract, the benefits passed to that Assured shall be no greater than such contract allows and in no case greater than the benefits provided under the insuring agreements, terms, conditions and exclusions in the Policy.
  57. 57. RIMS 2008 – Construction Placements Coverage Issues - Offshore WELCAR - Waiver of Subrogation Underwriters agree to waive rights of subrogation against any Principal Assured(s) and/or Other Assured(s). The Assureds shall not grant any waiver of subrogation to drilling contractors and/or their sub-contractors without obtaining Underwriters’ agreement to a specific endorsement to this Policy prior to the commencement of operations. As a condition precedent to their benefiting from the automatic waiver of subrogation in this clause, Other Assureds must perform their operations according to Quality Assurance/Quality Control system(s) that comply with the Quality Assurance/Quality Control provisions passed on by the Principal Assureds through each and every written contract awarded within the scope of insured works as scheduled under the Policy. Note: should be modified to reflect deletion of QA/QC and waiver of subrogation to drilling contractors.
  58. 58. RIMS 2008 – Construction Placements Coverage Issues - Offshore WELCAR - Policy Limit Underwriters’ total liability under Section I for all claims arising out of any one Occurrence shall not exceed 125% of the latest agreed Schedule “B” values, including payments made under the sue and labour clause, the additional work clause and the removal of wreckage and/or debris clause (each of which is separately limited under the appropriate coverage clauses). In the event of escalation as provided under clause 5 of Section I, Underwriters’ total liability under Section I for all claims arising out of any one Occurrence shall not exceed 150% of the initial Schedule “B” values, including payments made under the sue and labour clause, the additional work clause and the removal of wreckage and/or debris clause, and the Escalation Clause (each of which is separately limited under the appropriate coverage clauses). Notwithstanding anything contained herein, Underwriters’ maximum limit of liability in respect of Section I shall not exceed the Schedule “A” value in the aggregate.
  59. 59. RIMS 2008 – Construction Placements Coverage Issues - Onshore Onshore Construction Hot Buttons • Contractor Requirements – Design Error, Extended Maintenance, Contractor Soft Costs: Each of these items often are contractually required by contractors in the current market and can be critical in the final costs for a Builders Risk policy. Although LEG 3/96 (faulty part coverage) is available, it does have an impact on cost. Extended Maintenance coverage as required by many contractors is often not commercially available in the US. Many underwriters take the position that after a Builders Risk policy expires following hand-over, new occurrences become a 3rd party liability issue and not insurable under the Builders Risk (which is a property policy.) • Delay in Start-Up: This coverage is often heavily scrutinized by underwriters with burdensome documentation and a long waiting period that sometimes makes the coverage not very cost effective for owners.
  60. 60. RIMS 2008 – Construction Placements Coverage Issues - Onshore Onshore Construction Hot Buttons – continued • Inland Transit: This coverage extension although traditionally covered without many questions is coming under increased scrutiny by some underwriters. Owners should be prepared to provide details similar to what one would normally expect on an Ocean Marine placement. This is a critical coverage and owners should carefully evaluate contracts to determine the level of inland transit coverage actual needed under a CAR / EAR policy. • Liquidated Damages: Although very challenging and expensive to place (generally not considered economically practical), many contracts have a provision for owners to insure LD’s. Underwriters sometimes may agree to write a limited LD cover, there are usually many questions around the issue of moral hazards when contractors know there is insurance for LD’s provided to them.
  61. 61. RIMS 2008 – Construction Placements Some Recent Placements……
  62. 62. RIMS 2008 – Construction Placements Ultra Deep Offshore Placement Construction "All Risks" / Liability Insurance Lead Quote on Welcar Form Description Limits Cost CAR - Includes Windstorm $ 444,146,376 ECV $ 8,200,000 1.8% $ 150,000,000 CSL 5.5% Sub-Limits Cancellation $ 5,000,000 Standby $ 10,000,000 $ 70,000 Forwarding $ 2,500,000 Testing $ 2,500,000 Buyback: Faulty Part Coverage $ 20,000,000 $ 445,000 Third Party Liability $ 100,000,000 $ 470,000 Sub-Total Insurance Cost $ 9,185,000 Deductibles - Staged from $1,000,000 - $5,000,000
  63. 63. RIMS 2008 – Construction Placements LARGE ONSHORE PROJECT Description Market Quote Description 2 Coverage Full Project Value Design Error Provision LEG2/96 12 Months Maintenance Yes DSU & Extra Expense No Cover Windstorm Limit $100,000,000 In the aggregate for the term of the policy Flood limit $100,000,000 In the aggregate for the term of the policy Earth Movement $250,000,000 Annual aggregate Inland Transit No Cover Deductibles Works $500,000 Hot Test and Commissioning $1,000,000 Named Windstorm 3% VARATOL min Rate 0.40%
  64. 64. RIMS 2008 – Construction Placements V) Energy Market Indicators
  65. 65. $bn 20 So how did 2006 turn out? 18 16 14 Source:Willis/Aon Energy Loss Database 12 10 8 Losses excess US$1m 6 Estimated Worldwide Premium (US$) 4 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
  66. 66. Energy insurer capacities & average rating levels The “Supply & demand” curve US$m % of 2001 rates 6,000 120 5,000 100 4,000 80 3,000 Offshore 60 Capacities 2,000 40 Onshore Capacities 1,000 20 0 0 2001 2002 2003 2004 2005 2006 Source: Aon Limited
  67. 67. RIMS 2008 – Construction Placements Capacities of Major Reinsurers Reinsurer 2006 2008 AIG $150m $200m Swiss $120m $100m + Zurich $75m $100m ACE $80m $150m ARCH $75m $100m Liberty $100m $150m
  68. 68. RIMS 2008 – Construction Placements Underwriter Profits Insurer 2005 2006 2007 Allianz 6.57 10.53 12.00 Berkshire Hathaway 8.53 11.02 13.2 Zurich 3.33 4.63 5.63 Ace 2.01 2.31 2.58 Munich Re 4.13 5.30 5.85 Axis 0.09 0.93 1.05 AWAC -0.16 0.44 0.47 Arch 0.26 0.69 0.83 AIG 10.48 14.05 6.20 XL -1.29 1.72 0.36 Swiss Re 2.07 4.10 3.78 Lloyd's -0.20 7.14 April ‘08
  69. 69. $bn So how does 2007 look? 20 18 16 14 12 10 8 Losses excess US$1m 6 Estimated Worldwide Premium (US$) 4 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source:Willis/Aon Energy Loss Database
  70. 70. Energy insurer capacities & average rating levels + the “supply & demand” curve US$m % of 2001 rates 6,000 120 5,000 100 4,000 80 3,000 Offshore 60 Capacities 2,000 40 Onshore Capacities 1,000 20 0 0 2001 2002 2003 2004 2005 2006 2007 Source: Aon Limited
  71. 71. Energy insurer capacities & average rating levels + the “supply & demand” curve, end of Q1 ‘08 US$m % of 2001 rates 6,000 120 5,000 100 4,000 80 3,000 Offshore 60 Capacities 2,000 40 Onshore Capacities 1,000 20 0 0 2001 2002 2003 2004 2005 2006 2007 2008 Source: Aon Limited
  72. 72. Source: Business Insurance 4/7/08
  73. 73. Source: Business Insurance 4/7/08
  74. 74. RIMS 2008 – Construction Placements Thank-You !
  75. 75. Atomic Ergonomics Cindi Vickers, ARM
  76. 76. What is Ergonomics? From the National Safety Council: “Ergonomics is the study of human characteristics for the appropriate design of the living and working environment.”
  77. 77. What is Ergonomics? Solutions to ensure safety and productivity of workers Involves changing tools, equipment, materials, work methods, work place: Engineering controls Safe work practices PPE
  78. 78. What is Ergonomics? Reduce Work- Related Use principles of Musculoskeletal Disorders: Ergonomics: – Gripping – Redesign tools, equipment, – Kneeling materials, or work – Lifting processes – Repetitive movements – Bending – Twisting – Using vibrating equipment – Squatting – Overreaching
  79. 79. Musculoskeletal Disorders (MSDs) • Involve nerves, tendons, muscles, and supporting structures such as intervertebral discs • Represent wide range of disorders from mild to severe chronic and debilitating conditions
  80. 80. Common MSDs • Carpal tunnel syndrome • Low back pain • Eyestrain • Tendonitis • Trigger finger • De Quervain’s disease • Rotator cuff tendonitis • Herniated disk • Hand-arm vibration syndrome
  81. 81. MSD Characteristics • Severe and debilitating symptoms • Reduced worker productivity • Lost time • Temporary or permanent disability • Inability to perform job tasks • Increase in workers’ compensation costs
  82. 82. MSD Signs • Less strength for gripping • Less range of motion • Loss of muscle function • Inability to do everyday tasks
  83. 83. Outward MSD Signs • Swelling or inflammation of joints • Vigorously shaking hands • Massaging hands, wrists, or arms • Cradling arms • Limping • Stiff back
  84. 84. MSD Symptoms • Back and neck – shooting pain, stiffness • Shoulders – pain, stiffness, loss of mobility • Arms and legs – shooting pains, numbness • Elbow and knee joints – pain, swelling, stiffness, soreness
  85. 85. MSD Symptoms (cont.) • Hands and wrists – swelling, numbness, loss of strength • Fingers – jerking movements, or loss of strength, mobility, and feeling • Thumbs – pain at the base • Feet and toes – numbness, tingling, stiffness, burning sensation
  86. 86. Risk Factors • Repetitive motion – Stress on muscles, nerves, and tendons • Forceful exertion – Inflammation of tendons, nerves, joints • Awkward posture – Stress on muscles and tendons • Contact stress (pressure points) – Pressing against or grabbing a hard object • Vibration – Affects tendons, muscles, joints, nerves
  87. 87. Risk Factor - Repetitive Motion • Stress on muscles, nerves, and tendons • Contributing factors: Frequency of repetition Duration and speed of the repetitious movement Number of muscles involved Required force
  88. 88. Risk Factor - Forceful Exertions • Inflammation of tendons, nerves, and joints • Contributing factors: Type of grip Weight of object Body posture Type and duration of the task Presence of vibration
  89. 89. Risk Factor – Awkward Postures • Stress on muscles and tendons • Contributing factors: Overhead reaching Maintaining awkward position • Lifting while twisting, turning, or reaching
  90. 90. Risk Factor – Contact Stress • Pressing against or grabbing a hard object Pressure on nerves, tendons, and blood vessels • Contributing factors Repetition Duration of contact Strength of grip required
  91. 91. Risk Factor – Vibration • Affects tendons, muscles, nerves, and joints • Contributing factors: Restriction of blood supply to hands and fingers Prolonged grip No dampening device on tool
  92. 92. MSD Relation to Risk Factors De Quervain’s disease Forceful grip Hand-arm vibration syndrome Prolonged vibration Rotator cuff syndrome Repetition Thoracic outlet syndrome Posture Trigger finger Contact stress
  93. 93. No mouth - can’t complain about the constant pain from Long flexible neck - to see over work poorly placed machine controls Built-in computer - easily Steel cable in back - can’t be programmed for boring injured by heavy lifting repetitive work Super strong arm - when Extra long arm - can quality assurance requires easily reach supplies on brute force to make parts fit the highest shelves Easily replaceable wrist unit - Wrist Springs- never needs expensive carpal absorb the shock of tunnel surgery vibrating power Telescoping legs - no need for adjustable height workstations
  94. 94. Identifying Hazards and Controlling Through Ergonomics • Identify potential hazards and degree of risk • Devise control strategy • Implement control measures • Train employees
  95. 95. Workstation Design • Workspace layout • Work surfaces • Standing and walking surfaces • Seating • Storage • Work fixtures • Work environment
  96. 96. Workstations Computer Workstations • Keyboard Thin and detachable • Monitor Positioned low Slightly below eye level Viewing angle 30 degrees • Mouse or trackball Viewing distance 18-24” Within easy reach Same height as keyboard
  97. 97. Workstations Computer Workstations (cont’d.) • Seating Adjustable back support, seat and padded arms Adequate support for back and legs Rolling, five-pronged base for stability • Workspace Layout Adjustable Worker should be able to maintain neutral position Adequate leg room Adequate space for tools and equipment
  98. 98. Workstations • Work Surfaces Proper height and angle Permit neutral postures Adjustable • Walking and standing surfaces Designed to prevent slipping Provide adequate traction and comfort
  99. 99. Workstations • Storage Organized Heavy items stored between knee and shoulder height Frequently used items close to worker • Work Fixtures Use mechanical devices Hand tools should fit employees’ hands Use pneumatics tools with vibration dampening Provide personal protective equipment (PPEs)
  100. 100. Workstations • Work Environment Isolate equipment or operations that produce loud or distracting noise Proper lighting Isolate hands and feet from cold Reduce whole-body vibration while riding in vehicles or standing near equipment Isolate workers from excessive heat
  101. 101. Workstations • Management Controls Safe procedures Broadening or varying job content Training in recognition of risk factors Requiring use of PPEs Reducing shift length or curtailing overtime Rotating workers Scheduling frequent breaks
  102. 102. Key Points – Basic Ergonomic Principles • Examine work conditions on case-by- case basis • Minor ergonomic changes can make significant improvements • Involve workers in discussions before changes are made
  103. 103. References • National Institute for Occupational Safety and Health www.niosh.gov • Occupational Safety & Health Administration www.osha.gov • National Safety Council www.nsc.org
  104. 104. Risk Manager’s Roundtable Discussion
  105. 105. Raffle - GPS

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