Sponsored: Engle Martin & Associates

Manage Heavy Equipment Fire Risk to Reduce Costly Claims

Not investing in a good fire suppression system exposes equipment owners to numerous fire hazards, which can wipe out valuable heavy equipment.
By: | May 15, 2018 • 6 min read

Fighting something as swift and unpredictable as fire may seem like a losing battle, and indeed, fire is the second leading cause of loss for industries reliant on heavy equipment like mining, construction, marine cargo, logging and agriculture.

Heavy machinery relies on diesel fuel and/or hydraulic oil – liquids highly flammable under pressure — and in some cases process combustible material like wood chips, corn husks or other dried plant material. Together, they create a recipe for fast-moving flames.

To make matters worse, these machines tend to operate in areas not easily accessible by fire departments.

“Logging and agricultural equipment provide good examples of machinery operating in remote areas. There may not be any real roads leading to where the machine is, which impacts response time for the fire department,” said Blair Bennett, Senior Executive General Adjuster with Engle Martin & Associates, a national independent loss adjusting and claims management firm. “I’ve seen countless claims where the equipment is totally burnt to the ground by the time the fire department is able to get there.”

Tractors, excavators, boring machines and the like are expensive tools to replace. Heavy machinery typically comes equipped with hand-held extinguishers, but in most cases it’s too little too late. By the time an operator discovers there’s a problem, the small extinguisher is likely no match for a growing fire fed by the machine’s heat.

“There are specific types of fire, and each calls for a specific type of suppression,” Bennett said. The ability to distinguish classes of fire and deploy the proper solution can be the difference between a total loss and a minor repair.

Type of Fire Determines the Suppressant Needed

Blair Bennett, Senior Executive General Adjuster

The National Fire Protective Association categorizes fires as Class A, Class B or Class C, depending on what caused the combustion and what feeds the flame.

Class A fires are usually started from an accumulation of debris like insulation, upholstery or paper waste in tight areas of the equipment. If the material gets too close to a heat source, it can quickly ignite.

“This type of fire is very susceptible to heavy equipment working in the logging, agricultural and waste management industries,” Bennett said.

Class B fires involve diesel fuel, gas, grease or hydraulic oil. Hydraulic oil and diesel fuel on their own may not be very flammable, but can ignite easily under pressure and in the presence of another accelerant like gas. “These are what we call accelerator-driven fires,” Bennett said. “Hydraulic oils can operate between two and 10,000 pounds per square inch. A lot of these machines use as many metal lines as possible for high pressure hydraulic systems. Due to the nature of machines, their movements and how they work, there are still many areas of pressure that need to be considered,” he said.

Class C fires are electrical fires. Heavy equipment is heavily wired, and those wires are subject to some rough environments with vibrations, extreme temperatures and debris. Wiring can easily come loose, and just a small amount of friction against a metal component can send sparks flying.

The class of fire dictates what type of suppressant will be most effective. The two most common systems are single and dual fire suppression.

A single system uses only one type of suppression agent that may be a powder or a liquid. They tend to be cheaper to produce and install and are suitable for Class A fires without an accelerant.

A dual system utilizes tanks that suppress with both liquid and dry chemical agents, which is useful for Class B fires. The dry suppressant will extinguish the flames, while the liquid component cools down the heat source.

“If you don’t address the heat source, the fire will re-flash and return. In order to attack the fire from both angles, you need to put the fire out from the hydraulic fuel and also be able to cool down the components that can reignite, such as the heater, muffler or any moving parts that have generated frictional heat,” Bennett said.

Class C, or electrical fires, require a special type of pattern extinguisher that can illuminate the fire and spray suppression materials more strategically to avoid causing more damage or shorting.

“One thing to keep in mind is that both Class A combustion and Class C combustion can also turn into a Class B combustion if the flames travel to a hydraulic or fuel line,” Bennet said. “Therefore, a sophisticated suppression system is the best way to extinguish a fire quickly.”

Weighing the Cost and Benefits of Suppression Systems

Despite the effectiveness of fire suppression solutions, cost remains a barrier. Suppression systems generally do not come factory-installed, and operators wishing to implement such a system must have one custom-built for each particular machine.

“Each system has to be custom-designed based on the location of the heat source. It would entail detectors in various areas, multiple lengths of tubing and different locations for nozzles,” Bennett said. “I think in the future we will see more companies either having their own proprietary system or offering factory installation of the equipment.”

The systems can range from a few thousand dollars to well over $10,000 depending on how many tubes and nozzles are needed and the size of the tanks containing the fire suppressants. Vehicle owners and operators must decide whether that investment is worthwhile.

“If a company has a wheel loader valued at $50,000, it might not make sense to put $10,000 worth of improvements on it,” Bennett said. “But from an underwriting standpoint, fire suppression systems would be a way to reduce risk and lower premiums.”

Rely on Industry Expertise

Luckily, there are other simpler and less expensive ways to mitigate fire risk.

“A lot of heavy equipment fires can be eliminated with daily maintenance and cleaning. A responsible company will inspect each machine every day to ensure they are clear of combustible debris and that there are no leaking fuel lines or frayed wires,” Bennett said.

A skilled adjuster can help operators identify possible fire hazards not always obvious at first glance. A hole may not be visible, but often a gray or discolored hose indicates something is off. Belly pans that protect the engine and transmission should be kept clear — even a small buildup of waste can serve as kindling. For companies that do choose to install a fire suppression system, bi-annual inspections are necessary to keep them in top order.

“Operator education is also critical,” Bennett said. “In addition to proper inspections, operators should be trained in how to respond to a fire. Knowing what steps to take to protect yourself and the machine can minimize the damage.”

With experience in both marine and commercial property insurance, Engle Martin’s Specialty Marine & Transportation group can identify areas where an equipment owner is most exposed, either due to coverage gaps created by exclusions, or due to poor loss histories that limit their coverage options.

“We can handle anything from full adjustments involving complex claims to basic appraisals,” Bennett said.

To learn more, visit https://www.englemartin.com/loss-adjusting/inland-marine/.



This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Engle Martin & Associates. The editorial staff of Risk & Insurance had no role in its preparation.

Atlanta-based Engle Martin & Associates is a leading national independent loss adjusting and claims management provider. Privately held and owner operated, the firm delivers a comprehensive line of property and casualty claims service offerings.

Risk Report: Manufacturing

More Robots Enter Into Manufacturing Industry

With more jobs utilizing technology advancements, manufacturing turns to cobots to help ease talent gaps.
By: | May 1, 2018 • 6 min read

The U.S. manufacturing industry is at a crossroads.

Faced with a shortfall of as many as two million workers between now and 2025, the sector needs to either reinvent itself by making it a more attractive career choice for college and high school graduates or face extinction. It also needs to shed its image as a dull, unfashionable place to work, where employees are stuck in dead-end repetitive jobs.


Added to that are the multiple risks caused by the increasing use of automation, sensors and collaborative robots (cobots) in the manufacturing process, including product defects and worker injuries. That’s not to mention the increased exposure to cyber attacks as manufacturers and their facilities become more globally interconnected through the use of smart technology.

If the industry wishes to continue to move forward at its current rapid pace, then manufacturers need to work with schools, governments and the community to provide educational outreach and apprenticeship programs. They must change the perception of the industry and attract new talent. They also need to understand and to mitigate the risks presented by the increased use of technology in the manufacturing process.

“Loss of knowledge due to movement of experienced workers, negative perception of the manufacturing industry and shortages of STEM (science, technology, engineering and math) and skilled production workers are driving the talent gap,” said Ben Dollar, principal, Deloitte Consulting.

“The risks associated with this are broad and span the entire value chain — [including]  limitations to innovation, product development, meeting production goals, developing suppliers, meeting customer demand and quality.”

The Talent Gap

Manufacturing companies are rapidly expanding. With too few skilled workers coming in to fill newly created positions, the talent gap is widening. That has been exacerbated by the gradual drain of knowledge and expertise as baby boomers retire and a decline in technical education programs in public high schools.

Ben Dollar, principal, Deloitte Consulting

“Most of the millennials want to work for an Amazon, Google or Yahoo, because they seem like fun places to work and there’s a real sense of community involvement,” said Dan Holden, manager of corporate risk and insurance, Daimler Trucks North America. “In contrast, the manufacturing industry represents the ‘old school’ where your father and grandfather used to work.

“But nothing could be further from the truth: We offer almost limitless opportunities in engineering and IT, working in fields such as electric cars and autonomous driving.”

To dispel this myth, Holden said Daimler’s Educational Outreach Program assists qualified organizations that support public high school educational programs in STEM, CTE (career technical education) and skilled trades’ career development.

It also runs weeklong technology schools in its manufacturing facilities to encourage students to consider manufacturing as a vocation, he said.

“It’s all essentially a way of introducing ourselves to the younger generation and to present them with an alternative and rewarding career choice,” he said. “It also gives us the opportunity to get across the message that just because we make heavy duty equipment doesn’t mean we can’t be a fun and educational place to work.”

Rise of the Cobot

Automation undoubtedly helps manufacturers increase output and improve efficiency by streamlining production lines. But it’s fraught with its own set of risks, including technical failure, a compromised manufacturing process or worse — shutting down entire assembly lines.


More technologically advanced machines also require more skilled workers to operate and maintain them. Their absence can in turn hinder the development of new manufacturing products and processes.

Christina Villena, vice president of risk solutions, The Hanover Insurance Group, said the main risk of using cobots is bodily injury to their human coworkers. These cobots are robots that share a physical workspace and interact with humans. To overcome the problem of potential injury, Villena said, cobots are placed in safety cages or use force-limited technology to prevent hazardous contact.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them.” — David Carlson, U.S. manufacturing and automobile practice leader, Marsh

“Technology must be in place to prevent cobots from exerting excessive force against a human or exposing them to hazardous tools or chemicals,” she said. “Traditional robots operate within a safety cage to prevent dangerous contact. Failure or absence of these guards has led to injuries and even fatalities.”

The increasing use of interconnected devices and the Cloud to control and collect data from industrial control systems can also leave manufacturers exposed to hacking, said David Carlson, Marsh’s U.S. manufacturing and automobile practice leader. Given the relatively new nature of cyber as a risk, however, he said coverage is still a gray area that must be assessed further.

“With advancements in technology, such as the Cloud, there are going to be a host of cyber and other risks associated with them,” he said. “Therefore, companies need to think beyond the traditional risks, such as workers’ compensation and product liability.”

Another threat, said Bill Spiers, vice president, risk control consulting practice leader, Lockton Companies, is any malfunction of the software used to operate cobots. Then there is the machine not being able to cope with the increased workload when production is ramped up, he said.

“If your software goes wrong, it can stop the machine working or indeed the whole manufacturing process,” he said. “[Or] you might have a worker who is paid by how much they can produce in an hour who decides to turn up the dial, causing the machine to go into overdrive and malfunction.”

Potential Solutions

Spiers said risk managers need to produce a heatmap of their potential exposures in the workplace attached to the use of cobots in the manufacturing process, including safety and business interruption. This can also extend to cyber liability, he said.

“You need to understand the risk, if it’s controllable and, indeed, if it’s insurable,” he said. “By carrying out a full risk assessment, you can determine all of the relevant issues and prioritize them accordingly.”

By using collective learning to understand these issues, Joseph Mayo, president, JW Mayo Consulting, said companies can improve their safety and manufacturing processes.

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it.” — Joseph Mayo, president, JW Mayo Consulting

“Companies need to work collaboratively as an industry to understand this new technology and the problems associated with it,” Mayo said. “They can also use detective controls to anticipate these issues and react accordingly by ensuring they have the appropriate controls and coverage in place to deal with them.”


Manufacturing risks today extend beyond traditional coverage, like workers’ compensation, property, equipment breakdown, automobile, general liability and business interruption, to new risks, such as cyber liability.

It’s key to use a specialized broker and carrier with extensive knowledge and experience of the industry’s unique risks.

Stacie Graham, senior vice president and general manager, Liberty Mutual’s national insurance central division, said there are five key steps companies need to take to protect themselves and their employees against these risks. They include teaching them how to use the equipment properly, maintaining the same high quality of product and having a back-up location, as well as having the right contractual insurance policy language in place and plugging any potential coverage gaps.

“Risk managers need to work closely with their broker and carrier to make sure that they have the right contractual controls in place,” she said. “Secondly, they need to carry out on-site visits to make sure that they have the right safety practices and to identify the potential claims that they need to mitigate against.” &

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]