How to Underwrite a Logging and/or Recycling Operation
Special Underwriting Considerations for Logging and Recycling Operations
Considerations to be Identified for these Operation:
The peril of fire is by far the greatest cause of loss or damage for a logging or recycling. Many fires start within a piece of equipment due to improper maintenance or accumulation of oil soaked debris (wood chips, brush, sawdust) on the undercarriage which is ignited by a spark, improper smoking, or heat from the engine or transmission. The resulting fire quickly gets out of control making very early and effective efforts to extinguish the blaze important in order to protect other equipment at the job site. Despite best efforts, and even the presence of a built-in extinguishing system, the equipment Involved is often a total loss. Having the equipment fully insured to value is essential.
Preventative measures taken prior to a loss are particularly important with the type of equipment these operations use. Employees experienced with know how to operate the equipment are a must as much of the equipment is specialized and requires special training to maintain and operate. The equipment these operations have are quite expensive so having an employee with experience can save your business from a potential fire. Financial trouble may be preceded by a rapid turnover of employees or inadequate maintenance.
Fire fighting apparatus on the job site
This can be effective, but should not be viewed as a panacea since there are problems inherent with the various types.
Fire extinguishers require manual operation and are of little use if cinders ignite brush after employees leave the area.
Automatic fire suppression apparatus protecting the engine compartment and for cab of the equipment frequently do not have sufficient capacity to extinguish fires which rapidly spread, reach an intense heat, and are fed by oil, fuels, etc. A suppression system that is adequate for the machinery itself will be defeated once the fire has spread to other combustibles.
Water trucks, like manual fire extinguishers, must be manually operated but also may be inappropriate when gasoline, diesel fuel oil, or other lubricants, are involved.
Besides Fire, other risks to consider include overturn with Motor Truck Cargo//Transportation due to terrain and poor access roads, floods, and to a lesser degree vandalism and theft since job sites are rarely patrolled.
Video of a Grinder Machine
Specialized Logging and Recycling Equipment
Spar poles, portable towers, grinders, mulching machines:
For all of these fire damage and catastrophic loss is the most critical. Spar poles and portable towers consists of a large center post or mast to which pulleys and cables are connected. The cables are then used to move logs from the forest to a centralized area for loading. Generally the hazards peculiar to spar poles and portable towers are the same hazards encountered when considering cranes and draglines (upset, overturn, wind, and boom damage) which need to be carefully underwritten. Do not think that a smaller value of the equipment means there isn't one. Grinders and mulch machines that are older will still have a high replacement cost. If it is not insured to proper valuation and there is a partial loss, it could become a total loss if the equipment is not insured to value.
Underwriters must consider the following when underwriting this type of equipment:
a. Age of equipment,
b. Maintenance and inspection procedures.
c. Separate value of yarder and pole.
d. Training and experience of operators.
e. Are these rented or are they owned?
f. Frequency and method of transportation from one site to another.
g. Are all the pieces insured to value. This is critical for knowing what the totals values are and also for pricing.
h. Minimum of three years loss experience.
© 2015 Randi Glazer