Risky business - Vero Insurance
Vero Insurance property risk engineer Wayne Thompson shares some of the risks he’s encountered in paint and panel shops, so that you can consider whether your business would be covered if it happened to you.
Let’s not sugarcoat the smash repair industry. The insurance fraternity rates you as a high risk in terms of property insurance because of the hazardous operational nature of the industry and an unfortunate claims history.
From a general perspective, the terms and conditions within a property insurance policy are greatly influenced by the risk profile of your business. Simply put, the higher the risk, the higher your insurance cost.
You may also be disadvantaged by a high excess, and some exclusions may be included due to the severity of certain exposures. In extreme cases you may not even be insurable.
There are many ways you might curtail this increasing expense, and ensure you have a property insurance program that responds to a range of risks.
It depends on finding the risks and then attending to every one of them. Each issue I will present examples of some of those risks that you may not have considered.
A vehicle with a liquefied petroleum gas (LPG) tank fitted was unknowingly placed in a paint-baking oven.
In accordance with the company's 'safe working procedures', the petrol tank had been removed. However staff forgot to look in the boot for the LPG tank.
With the increasing temperature, pressure within the gas tank increased beyond the capabilities of the relief mechanism and the tank dramatically exploded. The facility was destroyed. That was 12 months ago and they have not returned to business.
A 240-volt radio/CD player was found within a paint spray booth.
Local management knew that this booth was deemed a hazardous area in which an explosive atmosphere is present or may be present, in quantities which require special precautions for the construction, installation and use of electrical equipment. They had posted appropriate signage and diligently maintained the purpose-provided electrical installations. Unfortunately they had forgotten about the introduction of this unprotected electrical apparatus.
In this case, inspection of the premises found the radio/CD player before an unfortunate incident occurred and it was removed. Signage was enhanced to include the preclusion of any electrical apparatus within the booth, and staff were formally notified of this precaution.
The regulator on the incoming gas supply into the gas-fuelled baking oven did not have an AGA tag.
A review of the client’s records found that this apparatus had not been certified by AGA (Australian Gas Association).
Damage caused by a failure to maintain or repair may not be covered under an insurance policy. The client engaged the services of an AGA representative to inspect and certify the installation. A tag was provided and a follow-up program was introduced to ensure ongoing compliance.
Excessive corrosion found on an air receiver.
Deep pitting of the bottom bell plate and welds were identified during an inspection.
This air receiver capacity was 200 MPa and is subject to an inspection certificate from an independent pressure vessel inspector and a registration document from WorkCover (NSW and QLD). Neither had been provided.
As above, damage caused by a failure to maintain or repair may not be covered under an insurance policy. The client engaged the services of appropriate representatives to inspect and certify the plant. Documentation was provided and a follow-up program was introduced.
Under Work Health and Safety legislation introduced on 1 January 2012, pressure vessels above or equal to 100 MPa are now subject to inspection, certification, and registration.
