Construction in the U.S. is at an all-time high and with that comes an increased risk relating to mobile crane use. According to the 2017 Rider Levett Bucknall Crane Index, Seattle, Chicago and Los Angles round out the top three cities with the most cranes in operation in the U.S at the start of the year.
Jake Morin, niche president of construction for ProSight Specialty Insurance, said getting cranes on and off the job site is the riskiest time when losses can occur.
Most of the cranes ProSight writes are mobile cranes.
“We’re not in the tower crane space. The majority of the cranes we write are mobile cranes,” said Morin. “So, they’re going to have sixteen wheels, twelve wheels on them. They’re going to drive to and from the job site. Tower cranes and larger cranes have to be dismantled and trucked.”
Mobile cranes take about double the amount of time to stop than a fully loaded tractor trailer, he said. That’s why over the road losses are the most common type of loss related to mobile cranes.
“Over the road losses are by far the largest loss within the crane industry,” said Morin.
Rearend collisions are the top cause of over the road losses, while pinching claims are the second most common cause. Morin said pinching occurs when a mobile crane makes a wide right turn and another vehicle tries to squeeze through next to it. Oftentimes, the vehicle will get pinched between the crane and a sidewalk sign, he said.
Loss costs can run high, especially if an injury is involved and the claim goes to trial. Morin said there is a tremendous amount of sympathy for the victim in these types of cases.
As a result, ProSight partnered with a third party vendor to create a service called SecureFleet, that offers a telematic product that includes outward and inward facing cameras to assist in reducing liability disputes.
New regulations to be released by the Occupational Safety and Health Administration (OSHA) later this year are also expected to assist in liability determination.
“We’ve had a lot of good changes through the crane industry through OSHA,” said Morin.
In the past, if there was any type of accident, 100 percent liability would be placed on the crane operator. Now, new guidelines will point liability to the entity that provided direction for the mobile crane operation. For example, a crane arrives at a job site and the operator is directed by the general contractor to set up in a certain location and the crane begins to sink.
“Before, that was all the responsibility of the crane operator and we believe now that some of it is going to come back to direction and control and be the liability of whatever entity places you in those situations,” explained Morin.
The operator guidelines are expected to be released in November 2017. The guidelines will be specific to the crane industry and will touch upon crane setup, direction and operator certification.
Most mobile cranes have commercial general liability coverage for over the road exposures, Morin said.
Certain CGL forms provide coverage for mobile cranes, while others do not. CGL coverage form CG 0001 10 01 includes coverage for power cranes, while the 04 13 edition of the form excludes coverage.
An insurer can also write their own form, said Morin.
“Business owners should make sure their insurance carrier offers a customizable range of coverage to protect assets and keep their businesses profitable,” said Morin. “Properly insuring projects will help businesses recover costs. For example, loss-of-use coverage helps compensate a building owner if a crane mishap delays the building from opening by the scheduled date.”
Another type of third party claim will be for loss of use, he said. For example, if the crane drops an air conditioning unit, there would be loss of business income while the business that was to have the AC unit installed is closed.
Morin added that loss of use is a great coverage to add to the policy to allow a crane operator to differentiate itself from competitors during job bids.
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