Presented by Larry Gallagher Director Corporate Loss Control. October 21, 2010

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Inspection & Loss

Control Considerations

Presented by Larry Gallagher Director Corporate Loss Control Grinnell Mutual Reinsurance Company G e utua e su a ce Co pa y

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INSPECTION

• A survey to obtain information

on the property and operations

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of the policyholder and to gain

insights into the probability of

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loss based on safety controls

present at the time of your visit.

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Why Set Up An Inspection

Program

b k f b i

• Know your book of business

 Type of Operations

• Crop only • Crop only

• Livestock farm and crop • Other

 Type of Structures

 On/off premise operations  Q lit f b k f b i

 Quality of your book of business  Mix of your business

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Purpose of Inspection

Program

• Proper Risk Selection

• Risk

Risk

– identification – reductionreduction – improvement

• Proper Valuation of

Buildings/Equipment

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Essential Elements of an

Inspection Program

• Underwriting Guidelines on what IS or IS NOT acceptable

• Establish procedure to handle risks that DO

• Establish procedure to handle risks that DO NOT meet Underwriting Guidelines

• Establish procedure for follow-up (Reinspection)

(Reinspection)

• Trained/Knowledgeable personnel

• Method of notifying policyholder of programy g p y p g

• Establish how success of program will be measured

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Risk Surveyor/Inspector

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Wears Many Hats

• Reporter

• Technical Consultant

• Salesman

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Implementing Inspection

Program

• Establish authority and

responsibility of inspector

• Establish inspection program

procedures

• Inform farm mutual personnel,

agents & policyholders of program

implementation

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Implementing Inspection

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Program

• Hire Inspector

• Train Inspector

• Other

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Inspector Training

• State Insurance Association

• Reinsurance Carrier

Reinsurance Carrier

• Local Technical Schools or Adult

Education Classes

• NAMIC – Agricultural Risk

Inspection School

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NAMIC

3601 Vincennes Road

I di

li IN 46268

Indianapolis, IN 46268

(317) 875-5250

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www.namic.org

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Agricultural Risk

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S h

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Inspection School

Typical agenda for school includes:

 The Inspection Process  Basic Electricity

 Basic Electricity

 LP Gas Installations

 Solid Fuel (Heating Devices)o d ue ( ea g e ces)  Farm Liabilities

 Farm Machinery Safety  ACV for Farm Buildings

 Students Will Inspect a Farm

J l 2011 July 2011

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Inspection Procedure

1. Contact Insured

 Schedule appointment

2. Inspector Introduction

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3. Inspection Purpose

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Inspection Procedure

(Continued)

C t t I d  Contact Insured  Inspector Introduction  Inspection Purpose • Inspect Property  Inspection Purpose

– Use of Inspection Disclaimer

• Discuss Hazardous Conditions with Insured

C l t I ti F

• Complete Inspection Forms

• Forward Inspection Report to Underwriter

Underwriter

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Risk Survey Behavior

• Remember….. policyholders are

“our” customers

 Treat them as you would want to be

treated

 Be polite, dress professionally,

l h h

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Risk Survey Behavior

 ’ k h b

Risk Survey Behavior

 Don’t smoke, chew tobacco, etc.

during visit

 Conduct home inspection first then

livestock buildings livestock buildings

 R i f i l t ll ti

 Remain professional at all times,

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What to Look at During

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Inspection Process

• Scope of Operation

• Identify Structurally Unsound

Identify Structurally Unsound

Buildings

• Identify Physical Hazards

• Evaluate Building Condition and

Establish Building Insurance

Value

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Items to Consider When

Insuring a Building

 B ildi I l i  Structural Design  C H d  Building Insulation Materials  Common Hazards

(electrical system, heating, housekeeping, careless smoking)  Management’s Commitment to smoking)  Exposure (distance from other buildings)

Safety

 Others

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GMRC’s Hazard Grading of

Inspections

Ri k b d d h di i

• Risks are to be graded on the conditions

that are present while the inspector is there. They are not to be graded on how the risk y g

will be if hazards are corrected.

• Risks are “graded” in the Inspection Reports using a letter grading system. This system includes evaluating the risk based on g

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GMRC’s Hazard Grading of

g

Inspections

• A – Excellent Risk. No uncontrolled

hazardous conditions which are likely to y cause injury or property damage

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GMRC’s Hazard Grading of

bl i k hi i k h

g

Inspections

• B – Acceptable Risk. This risk has a few light to moderate non-causative hazards with nonstandard safety

hazards with nonstandard safety controls (fire extinguishers need serviced, lightning surge arrestor serviced, lightning surge arrestor should be installed, etc.). Hazards are present that have potential for causing disabling injury or non-disruptive property damage.

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GMRC’s Hazard Grading of

g

Inspections

• C – Acceptable if corrected. This risk has hazards with nonstandard safety controls associated with it but is

controls associated with it but is

acceptable for coverage in its present condition if hazardous conditions are controlled or eliminated in a

reasonable amount of time. The uncontrolled hazards have the uncontrolled hazards have the

potential of causing serious injury or property damage.

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GMRC’s Hazard Grading of

g

Inspections

• D – Rejected. The risk is

unacceptable in its present condition unacceptable in its present condition due to the hazards associated with

the risk. Recommend cancellation or non-renewal until hazardous

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Structural Design

h b ildi / d l

• Is the building/structure adequately designed to withstand the snow load and wind load for the geographical and wind load for the geographical area?

• Have modifications been made to the

• Have modifications been made to the building/structure since it was

constructed?

• What is the current condition of the building/structure?g

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Electrical System

A i A h f El i l

• Appropriate Attachment of Electrical

Service Entrance Wires to the Building and Entrance into the Buildingg

• Ground Electrical Service Entrance Panel

• Proper Fusing (Fuses/Breakers)

For Copper Wire

Wire Size Fuse/Breaker Size Wire Size Fuse/Breaker Size

No. 14 15 amp No. 12 20 amp No 10 30 amp No. 10 30 amp

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Electrical System

(Continued)

Wi i T * d C diti

• Wiring Type* and Condition

• Electrical Boxes Type* and Condition Grounding of Electrical Equipment

• Grounding of Electrical Equipment - 3 Wire System

*If in a Livestock or Poultry building or an area damp, corrosive or dusty, the p, y,

building/area should be wired in accordance with Article 547 of the National Electric

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Poor Condition of Electrical

System Components

Evidenced by: Evidenced by:

• Wire conductors are not secured to building support membersg pp

• Electrical boxes/light fixtures not affixed to the wall or ceiling

O i li i

• Open wire splicing

• Covers off electrical boxes

• Corroded electrical boxes

• Exterior Insulation damaged exposing energized wiresg

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Heating System

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Residential Heating

S

Systems

(LP G N t l G F l Oil El t i W d) (LP Gas – Natural Gas – Fuel Oil – Electric – Wood)

What to look for:

• Listed by a Recognized Testing Agency

(UL – AGA – CSA International – etc ) (UL – AGA – CSA International – etc.) • Clearance from Combustibles

(Top – Sides – Bottom)

(Will h l l ) (Will show clearances on name plate) • Proper Fuel Line

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Residential Heating Systems

(LP G N t l G F l Oil El t i W d) (LP Gas – Natural Gas – Fuel Oil – Electric – Wood)

What to look for: What to look for:

• Adequate Safety Control

• Appropriate Venting/Chimneypp p g y

– Type – Clearance – Condition of Chimney – Chimney Connector Clearance)

– (Code that applies – NFPA #211 – “Chimneys,

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Vent/Chimney Type

Based on Type of Fuel Being Used

FUEL CHIMNEY TYPE

LP Gas* Class B Vent

Masonry Chimney w/Liner M t l All F l Chi

Metal All-Fuel Chimney

Natural Gas* Class B Vent

Masonry Chimney w/Liner l ll l hi

Metal All-Fuel Chimney

Fuel Oil Masonry Chimney w/Liner Metal All-Fuel Chimney

Wood Masonry Chimney w/Liner Metal All-Fuel Chimney

*High efficiency furnaces may not require a conventional vent or himne A 2 3 in h PVC pipe m be pp op i te b ed on chimney. A 2-3 inch PVC pipe may be appropriate based on Manufacturer installation information.

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Agricultural Heaters

Wh t t l k f

What to look for:

• Newer Units should be Listed by a Recognized

Testing Agency, such as AGA or CSA International P Cl f C b tibl

• Proper Clearance from Combustibles (Top – Sides – Bottom)

(Check Name Plate or Manufacturer’s Literature) f bl Sh ld b l S d

• If Portable – Should be Properly Supported (By Bracket, Fine Cable, or Chain)

• Needs Proper Fuel Supply Line

• Needs Gas Safety Control

(All need a 100% Automatic Shut-off Device)

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Heat Lamp

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Unsafe Conditions

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Building Materials

• In farm buildings, if insulated,

the insulation should be

installed in accordance with

the manufacturer’s

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Building Materials

• The majority of polystyrene and

polyurethane insulations should

not be left exposed. It is

recommended by insulation

manufacturers that they be

covered by a 15-minute thermal

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Basic Problems with Polystyrene

and Polyurethane Insulations

1 Fi

1. Fire



Once insulation is ignited from

e en a small fi e mate ials

even a small fire, materials

allow for very rapid fire spread

across the face of materials.

For this reason, most of these

insulations are required to be

covered as opposed to being

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Basic Problems with Polystyrene

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and Polyurethane Insulations

2. Toxic Gases



Some give off toxic gases that

could kill, if in a high enough

concentration – majority of

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lives lost in fire are due to

Carbon Monoxide or Carbon

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Basic Problems with Polystyrene

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and Polyurethane Insulations

3. Smoke Concentration



Because these insulations are a

form of plastic, they give off

dense black smoke and will

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obscure vision making it difficult

to locate exists in the event of a

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Exposed Insulation

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Exposure Distance Between

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Buildings for Fire Purposes

Minimum of 50 feet

Recommended for Farm

Buildings

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Management Attitude &

Commitment to Safety/Loss Control

• Receptive to suggestions to decrease hazards?

• Take pride in their property and

properly maintain it or is this what you see….

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Open Combustible Liquid

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Containers

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Fire Protection

• Portable Fire Extinguishers

(Multi-Purpose Dry Chemical ABC) (Multi Purpose Dry Chemical ABC)

• Invite Fire Department to Site

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• Use Pond or Lagoon in Rural

Areas

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Enhancing Existing

Inspection Program

Alter perception of what we do from a policing

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Alter perception of what we do from a policing force to a Loss Control Consultative approach.

Hector the Inspector

Sam the Safety Consultant

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Change/Improvements

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Start at Home

• In order to improve perception, start with terminology used within your office

 From “inspector” to “Loss Control Specialist”

 From inspector to Loss Control Specialist

 From “inspection” to “Loss Control Survey”

 Change verbal and written use of these

terms

 When calling policyholder make reference to

survey of your property for insurance purposes survey of your property for insurance purposes

 Documents sent to policyholder following Loss

Control Survey should not include the words inspection or inspector

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Primary Benefit

• Eliminating perception you are at

his/her property to inspect it to find deficiencies to you are there to

review/discuss safety with them,

frequently eliminates the adversarial frequently eliminates the adversarial position the property owner may have from the time you set the

from the time you set the appointment.

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