TOP 5 UNDERWRITING

CONSIDERATIONS FOR CRANES

SIMPLE STEPS TO HELP ELIMINATE
UNCERTAINTY
 WHAT TYPE OF CRANE ARE YOU INSURING?

• Crawler Crane
– Long individual pieces
of boom and jib
– Expensive attachments
and accessories
– Expensive to transport
– Boom/jib make up a
significant part of the
crane value
– Maintain value
 WHAT TYPE OF CRANE ARE YOU INSURING?

• All-Terrain Crane
– Highway exposure
– Off-highway exposure
– Boom makes up a
significant part of the
crane value
– Expensive and long
lead time parts and
components
– Shorter service life
than crawler cranes
 WHAT TYPE OF CRANE ARE YOU INSURING?

• Truck Crane
– Taxi crane with
extensive on-
highway exposure
– Requires operators
to perform multiple
jobs
– Jobs may not be
highly engineered
– High utilization
– Lose value over time
 WHAT TYPE OF CRANE ARE YOU INSURING?

• Boom Truck
– Taxi crane with extensive
on-highway exposure
– Requires operators to
perform multiple jobs
– Jobs may not be highly
engineered
– High utilization
– Lose value over time
 WHAT TYPE OF CRANE ARE YOU INSURING?

• Rough Terrain Crane

– Work on unimproved
job sites
– Perform pick & carry
duties (lift and move
loads without using the
outriggers)
– Most frequently bare
rented
– Lose value over time
 WHAT TYPE OF CRANE ARE YOU INSURING?

• Conventional Truck Crane

– Being replaced by the All-
Terrain Cranes
– Diminishing market so
values are going down
– Boom become even a
greater proportionate value
of the overall crane
 WHAT TYPE OF CRANE ARE YOU INSURING?

• Tower Crane
– Are generally erected and
operated in confined
working areas
– Few accidents but when
they happen can be more
catastrophic
– Generally bare rented
and have a long useful
service life
 CUSTOMER CONSIDERATIONS

• Loss History
• Safety Culture
– Do they employ only NCCCO certified operators?
– Do they require annual defensive driving training?
– Do they invest in and provide regular safety training?
– Are they members of any professional crane associations?
– Do they understand and train for compliance to the new
OSHA standards for cranes & derricks?
– Do they understand and train for compliance to the new
ANSI B30 standards?
• Facilities Audit
• Equipment Audit/Inspecton
 POLICY CONSIDERATIONS

• Actual Cash Value / Agreed Value /

Replacement Cost Value
• Loss of Use / Rental Reimbursement
– Can it be replaced?
– At what expense?
• Recovery
– Who is controlling the damaged asset?
– Adding value or creating a larger loss?
• Third Party Repair Provision
– Don’t let the manufacturer/dealer be the only
option
 POLICY CONSIDERATIONS

• Leased & Rented Equipment

– Risk of owning vs. renting
• Is risk really shifting to the equipment owner?
• Contracts are very restrictive
– Continuing rental in the event of an accident
– Ability to bring in third party repair option
– Scheduling rented equipment
• Know what you are insuring
• Value what you are insuring
 VALUATION

• Accurate
• Time & market sensitive
• Specific
• Easy to understand
• Cost effective to obtain
• Acceptable to all parties
 POST ACCIDENT
MITIGATION/SUBROGATION

• Control the Process and the Assets by Using

Experts
– Recovery
– Control assets by moving to a neutral site
– Know and understand your options
– Experts can help with
• Cause and origin
• Appraisal
• Repair
• Subrogation
 LOSS EXAMPLE
• Know what you are
insuring?
– Insured Value -
$230,000
– RCV - $191,000
– ACV - $25,000 (at best)
– Salvage Value - $5,000
(at best)
 LOSS EXAMPLE
• Repair vs. Replace
– Boom damage
• Repair - $6,250 (5 days)
• Replace - $189,000
(delivery – n/a)
– Superstructure Damage
• Repair - $32,150 (45 days)
• Replace -$136,000
(delivery – n/a)
 LOSS EXAMPLE
• Efforts to Mitigate Exposure
– Crane rented to customer who turned it over
– Crane owner and manufacturer worked to
have the crane go to salvage
– Customers insurance company fought to have
the crane repaired
– A compromise was ultimately reached but
not without significant time and effort
LOSS EXAMPLE
QUESTIONS?