16 February 2015

Crucial Decisions Help Reduce Costs for Crane Insurance

The crane insurance industry can seem like a complex and hard to understand system for the uninformed. Certain terms like risk management, loss mitigation, subrogation, and loss control are thrown about, and the policyholder is left trying to decipher what, exactly, those terms actually mean. To the average insurance buyer it usually boils down to one basic question: What can be done to reduce the amount of premium being paid?
Insurance providers will typically use what's called "experience rating" (a process whereby an underwriter uses the company's published pricing structure as a starting point, then adjusts it based on past loss experience to come up with a rate). An exposure unit then multiplies that rate in order to come up with a price. Having a loss history that reflects minimal losses is imperative to keeping crane insurance premiums as low as possible.
Crane accident recovery process lessens exposure
One way to help mitigate the loss exposure is through the crane accident recovery process. When a crane turns over and the boom is lying across a jobsite (or worse, across someone's backyard) most owners first reaction is to get the site cleaned up as quickly as possible, worried about it ruining their reputation and costing them subsequent jobs.
While a certain amount of stress is to be expected with crane accidents, initiating the clean up without properly assessing how the crane will be removed can have a significant impact on a crane company's loss run. Ultimately, the amount the insurance company has to pay to repair or replace the damaged piece of equipment is the number that will be reflected on the loss run when the insurance renewal comes up the following year.
Making the proper decisions for clean up is crucial
Most crane industry professionals know that the majority of a crane's value may be found in its boom. For example, the boom of a mobile hydraulic crane was lying across a roadway because it was side loaded and tipped over. The damage was mostly contained to the boom. In an effort to expedite removing the crane from the site, welders were called in to cut the boom, but because the boom was cut in half without any thought to where the cut was made, the entire boom was rendered useless and therefore had to be replaced.
And in the process a perfectly good, and very expensive telescopic cylinder, was also rendered useless. Had the crane owner spent a little more time planning the recovery process and placing the cut in an area that optimized the repair potential, a total replacement could have been avoided. The bottom line is, minimizing the damage caused during the recovery process is extremely important.