Lessons Learned from AEGIS Claims and Loss Control

Transcription

1 Lessons Learned from AEGIS Claims and Loss Control Scot Macomber Vice President Loss Control Utility Operations Mark Bluestein Vice President / Senior Counsel Claims Andrew Granzow Vice President Claims Joshua M. Fleischer Vice President Loss Control Property Operations AEGIS Insurance Services, Inc. 1

2 Claims & Loss Control Excess Liability Scot Macomber Vice President Loss Control Utility Operations Mark Bluestein Vice President / Senior Counsel Claims AEGIS Insurance Services, Inc. 2

3 Loss Control Division Mission Assist AEGIS member companies in maintaining effective and safe operating systems while reducing their overall long-term cost of risk, by developing and providing products, services and training specifically for this purpose Loss Prevention Utility Operations Risk assessments conducted on a 3-year cycle Work with member utility risk manager and subject matter experts during risk assessment 2- to 3-day engineering document review and discussions Half day field visit Written draft report issued to AEGIS Underwriting with a copy available to the Risk Manager 3

4 Loss Prevention Utility Operations Natural gas topics Damage prevention Pressure control Odorization System inspections Customer premises practices Customer and public safety awareness Loss Prevention Utility Operations Natural gas topics Call center operations (a separate in-depth assessment also offered) Distribution Integrity Management Plan (DIMP) Operations, maintenance, and emergency plans Contractor pre-qualification review and evaluation Occupational safety Transmission (pipeline) Integrity Management Plan (TIMP) Natural gas storage facilities (underground / LNG / propane-air if applicable) 4

5 Claims Odorization Claim Pork Plant Blast Kills One, Injures 14 5

6 Odorization Claim Natural gas-fueled explosion at plant that was under construction Gas company responsible for supplying gas to plant Contractor opened valve to purge air from gas line Gas filled building until it found an ignition source Explosion blew a 150-foot hole in the roof and caused a partial collapse One worker killed and several injured Odorization Claim Gas company sued for lack of adequate odorant Gas company claimed it odorized gas distributed to plant Gas company carefully monitored amount of odorant injected Gas company took odor meter readings at various points in system Gas company kept excellent records Post-loss investigation found adequate levels of odorant 6

7 Odorization Claim State investigators and Fire Marshal indicated positive sniff tests Issue was odor fade and adsorption in new steel pipe at plant Phenomenon well-known in the industry; contractor should have known Gas company found 12% liable for loss Should have better informed / educated contractors of issue Odorization Prove natural gas is odorized The sole purpose of natural gas odorization is to help the public identify when there is a possible problem with leaking or otherwise uncontrolled natural gas LDC is solely responsible for maintaining, inspecting, correcting and documenting that a readily detectable odor level is always present Note type of odor chemical used Monitor injection rates so a wide variation is not encountered Have contingency plan if odorization injection fails Ensure inspections conducted as required 7

8 Odorization Prove natural gas is odorized Select strategic locations to represent the system for inspection The employee conducting the inspection is limited to a number of locations daily and has been tested for a normal sense of smell Instruments used in the inspection have been calibrated, identified by a unique company number, and that number appears on the compliance documentation The proper odorization or pickling of pipe is included in company procedures Odorization Loss Control products and services Gas operator training (fee-based) First response Leak pinpointing Leakage program management Lessons Learned videos The Smell of Danger Anatomy of a Gas Leak 8

9 Odorization Loss Control products and services Recognizing and avoiding the hazards Focused service Odorization program document review Webinar Public safety communications Call Center Claim Explosion Levels Apartment Complex 9

10 Call Center Claim Caller contacted gas company about a gas leak / odor outside, in street CSR asked the caller Where was the leak? Could she smell gas in her apartment? If so, was it a strong smell? Caller was NOT advised to evacuate the building Caller advised to close windows and remain inside apartment Call Center Claim Fire department arrived first and secured area near leak Gas company arrived and began actively trying to repair the leak No evidence that responding crew knew people were in the building While gas company employee was shutting off gas, explosion occurred Critical burn injuries to 22-year-old mother Fire department had sovereign immunity Gas company held solely responsible for all BI and PD losses 10

11 Call Center First line of defense Call centers receive, review and forward information from callers reporting natural gas emergencies. This process initiates a utility s emergency response system: NAME of caller ADDRESS of caller NATURE of the call inside odor, outside odor, facility damage, carbon monoxide emergency, etc. Call Center First line of defense ADVICE to the caller Leave the area immediately and ask others to leave with you; go to a safe location Don t turn lights, electric switches, or appliances on or off, don t light a match or start a car, leave the phone off the hook; we will disconnect you from our end ADDITIONAL actions Follow up with dispatcher Follow existing PSA Leave the area immediately and call from a safe location 11

12 Call Center Loss Control products and services Call center risk assessment Half day call center review of emergency call handling Gas operator training (fee-based) Call center training Focused service Call center training based on risk assessment findings Call Center Loss Control products and services Lessons Learned videos Call For Help First Line of Defense Webinar Company experience in public safety advice 12

13 Loss Prevention Utility Operations Electric topics Substation design, construction and inspection Transmission design, construction and inspection Distribution design, construction and inspection Vegetation management / tree trimming Pole inspection Joint pole use / ownership operations Loss Prevention Utility Operations Call handling practices / procedures A separate in-depth assessment also offered Downed wire dispatch procedures Public safety and awareness Environmental programs Dams Contractor safety review and evaluation Occupational safety 13

14 Substation Contact Claim Boy Burned in Substation Accident Substation Contact Claim 11-year-old boy gained access to fenced-in area of substation Climbed tower and contacted energized equipment Friend also entered substation, but was not injured Children testified they and others entered on many prior occasions High fence with barbed wire met NESC standards Gate fencing was substantially lower; had no barbed wire Large gap between gate fencing where it locked Large gap also under gate fencing No safety / warning signs at or on fence gates 14

15 Substation Contact Substation entry by unauthorized or unqualified persons presents a significant exposure to injury from contact with energized equipment. Fences and signs are intended to keep the public from entering these facilities. Entrance gates Gaps less than four inches Perimeter fence Overall height of the fence seven feet (including one foot of barbed wire) No wash-outs under fence Substation Contact Safety and warning signs Signs for unauthorized entry Grounding Climbing aids Attractive nuisances Station lighting 15

16 Substation Contact Loss Control products and services Webinars Model practices the utility s physical security plan Physical security at electric substations Substation safety and security inside and out Physical security seminar Substation Contact Loss Control products and services Lessons Learned videos Deadly playground Recognizing and avoiding the hazards Focused service On-site inspection and training Inspection guide Substation public safety and security inspection form 16

17 Overhead Wire Contact Claim Mother Killed by Downed Line Overhead Wire Contact Claim Clear, sunny day No recent storms Conductor falls in backyard Energized line contacts 39-year-old mother of two 4-year-old and 2-year-old daughters witness loss Fire department first responders cannot assist due to energized line Utility responders de-energize line 20 minutes later Mother burned over 80% TBSA; and died three days later 17

18 Overhead Wire Contact Claim Issues Line had fallen previously; homeowner expressed concern to utility Improperly installed splice Inadequate inspections PUC issued civil penalties; mandated improved inspection procedures Electric Contact Overhead conductor failure Regular inspections of all facilities supports proper maintenance programs and helps identify substandard conditions before they become serious hazards. NESC rules 214 and 313 do not specify inspection frequencies, but as experience has shown to be necessary. Regular inspection program monitoring the condition of the system Primary, secondary, service conductors Cross-arms, cross-arm support brackets Insulators Guy wires 18

19 Electric Contact Overhead conductor failure Pole inspection programs Wood pole ground line Steel pole ground line Vegetation management Tree clearances Electric Contact Overhead conductor failure Any conditions found that may pose an immediate hazard to the public or to employees should be corrected immediately. Risk of immediate loss of supply or damage to the electrical system should be promptly addressed. In addition to documentation to verify that an overhead conductor has been inspected, it is important to maintain records to indicate the corrective action taken, such as assigning a repair order and priority to each deficiency and tracking the status of the repair order from initiation through completion 19

20 Overhead Conductor Failure Loss Control products and services Webinars How safe is your connector splice Wood pole testing Steel pole corrosion Inspection and maintenance practices for steel T&D structures Pole attachments issues, concerns, and solutions Overhead Conductor Failure Loss Control products and services Recognizing and avoiding the hazards Inspection guides Distribution line inspection form Overhead distribution inspection practice guidelines 20

21 Public Safety and Awareness Messages Failure to warn is almost always raised in lawsuits Targeted audiences Customers Affected public Schoolchildren First responders Public officials Contractors Claims & Loss Control Property Andrew Granzow Vice President Claims Joshua M. Fleischer Vice President Loss Control Property Operations AEGIS Insurance Services, Inc. 21

22 Property Claims Department Property claims department three staff members Vice President Property Claims Executive General Adjuster General Adjuster Handle claims arising under operational & construction policies first party property, not liability claims 198 pending claims with a total incurred of $135 million Claim Examples 22

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25 Outstanding Claims as of June, 2017 By cause of loss, number of claims Wind 5 Other* 30 Hail Collapse 4 5 Crack 4 Electrical 27 Mechanical Breakdown 76 Fire 34 Flood 13 * includes: explosion, lightning, transit, water 25

26 Property Claims Handling An independent adjuster (IA) is assigned to each loss and directed by AEGIS Claims Adjuster The IA manages the loss by directing the adjustment team according to instructions of the market IA does not have authority to decide coverage or quantum The adjustment team typically consists of: Engineering consultant to investigate cause and to estimate repair / replacement cost Forensic accountant to calculate the loss and measure Business Interruption (BI) Possibly coverage counsel Subrogation counsel and consultants AEGIS Property Claims Differentiators With a large percentage share, AEGIS leads, rather than follows the market AEGIS Claims controls the loss in the favor of AEGIS & our members by: Setting the direction of a claim early by the controlling the selection of the IA, consultants, and counsel Managing the losses in a proactive manner to get reliable estimates of loss Ensuring there is effective communication from the insured to the IA to the market AEGIS cannot direct the other participating companies in the market, but can influence them with our percentage share and technical expertise 26

27 Loss Control Property Operations Loss control property operations group 18 staff Additional 5 provide analytical support Utility industry experience / focused on power generation Property, machinery, builders risk assessments, and focused services to our members My Risk Assessments (MRA) portal Loss Control Property Operations Involved in industry organizations / technical committees (e.g. NFPA, IEEE, SFPE, EEI) Stay abreast and involved with major equipment manufacturers and service providers (e.g. Siemens, GE, etc.) Review claims for lessons learned 27

28 Machinery Risk Reduction Suggestions Operations Pressure Vessels 3% 3% Gas Turbine 4% Boiler 4% Electrical Maintenance 4% Predictive Maintenance 4% Major Systems 5% Emergency Battery 7% Generator 13% Maintenance Miscellaneous 1% 1% Transformer 19% Steam Turbine 14% Operational Testing 18% Property Risk Reduction Suggestions Fire Signaling System Detection Systems 1% 1% Passive Protection 1% Water Supply 7% Protective Systems 1% Miscellaneous 1% Fire Detection Systems 9% Fire Protection Systems 37% Major Equipment 13% Risk Reduction Programs 29% 28

29 Fire Protection and Machinery Loss Prevention Fire protection systems Inadequate lube oil hazard protection Risk reduction programs Inspection, testing and maintenance procedures to ensure fire protection systems maintained by NFPA standards / codes Turbines and generators Changes in operational profile of units due to increase in cycling Property Claims & Loss Control 29

30 Steam Turbine Mechanical Breakdown Claim Background 155 MW Westinghouse steam turbine mechanical breakdown and fire Unit tripped offline row L-0 blades liberated smoke and fire ensued Extensive damage to the steam turbine and generator Claim settled net loss: PD $13.1 million BI $2.6 million $15.7 million Steam Turbine Mechanical Breakdown Claim Fire at Power Plant 30

31 Steam Turbine Mechanical Breakdown Claim Typical turbine stages HP, IP, LP Superheated steam / LP-saturated steam High cycle fatigue L-0 blade liberation Lube oil leak Inadequate under turbine fire protection Ensuing fire Steam Turbine Mechanical Breakdown Loss Control products and services Conduct risk assessments Inadequate / lack of under turbine fire protection as opposed to, for example, a transformer Lube oil flow path for fire protection Review historical vibration trends Review alarm set points Review quantity of starts / stops of unit(s) Review water chemistry 31

32 Boiler Explosion Claim Boiler Explosion Claim Background Explosion occurred in unit 40 s reheat furnace Two employees went to inspect the reheat furnace after the control room noticed an issue with flame pattern and stability As they were returning to the control room, heard steam leak and the explosion followed Net loss: PD $56 million BI $36.5 million $92.5 million 32

33 Boiler Explosion Claim Explosion at Power Plant Boiler Explosion Tube failure caused burner extinguishment History of tube failures 33

34 Boiler Explosion Less Control products and services Risk Assessments review operating history and unit issues Percent of tubes failed Tube material evaluation Further investigation warranted? Was there a root cause? Was there a boiler useful life study? Damage During Hydro Test Claim Background 34

35 Damage During Hydro Test Claim Background Loss occurred at a 472 MW combined cycle plant One of the four operating units consisted of two combined cycle gas turbines (GT1 & GT2) and one steam turbine, providing total output of 210 MW On the date of loss repairs had been done to the Heat Recovery Steam Generator (HRSG) related to GT1 and a hydro test was required Water entered steam turbine causing a rubbing of components and damage Total property damage net loss: $3.15 million Damage During Hydro Test Claim Human Error Leads to. 35

36 Damage During Hydro Test Claim Steam turbine water induction incident resulted from improperly isolating boiler during hydrostatic pressure test The steam turbine is part of two-on-one combined cycle power block Operators failed to properly isolate the boiler by not using the double block and bleed valves Resultant damage included rubbed discs, wiped thrust bearing, and rotor replacement Damage During Hydro Test Loss Control products and services Risk assessments Review of operating procedures Procedures for hydro testing during operation of the steam turbine Lock out / tag out Training Data review of last inspection / work for the isolation valves Focused services Water induction study Webinar Prevention of water damage to steam turbines 36

37 Engineering Services Fire Protection Training Class Held annually Next class: October 17-19, 2017 Oklahoma State University Classroom and hands-on training environment Topics include Power plant hazard identification Fire protection design concepts Fire pumps and water supplies Sprinkler systems 37