The Basis Principles and Practices of Surveying and Investigating 8 May 2014

8/12/2019 The Basis Principles and Practices of Surveying and Investigating 8 May 2014

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THE BASIS, PRINCIPLES, AND PRACTICES OFSURVEYING AND INVESTIGATING ENERGYRELATED CASUALTIES

5/14/2014

Adam R. Ratliff, P.E. 1

Adam R. Ratliff P.E.Senior Adjuster

Braemar Technical Services (USA) Inc.

10000 Memorial Drive, Suite 100Houston, Texas 77024Tel: +1 713 688 5353Mob: +1 614 406 8406Fax: +1 713 688 3355www.braemar.com

Email: [email protected]


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PERSONAL BIO

Adam R. Ratliff, P.E.

Experience:

BRAEMAR AdjustingSenior Adjuster

S-E-A (formerly SEA Ltd.)Project Engineer

ExxonMobil Research & EngineeringAdvanced Mechanical Engineer

National Highway Traffic Safety Administration (NHTSA)GRA

SEA, Ltd.Mechanical Engineering Co-op

Education:

Mechanical EngineeringM.Sc.The Ohio State University

Mechanical EngineeringB.S.The Ohio State University

Advanced Physics & MathematicsUGSOtterbein College

Licensure:

Professional EngineerTexas License No. 110223

Professional EngineerLouisiana License No. 37397

Professional EngineerArkansas License No. 15275

Property & Casualty AdjusterTexas License No. 182539

Private InvestigatorTexas Registration No. 866272

5/14/2014

Adam R. Ratliff,P.E. 2


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OUTLINE

The Why/When/How of Surveying (Brief)

Investigating the Cause of Loss

Causes, the Causal Chain, & Insurance

Causal Analysis MethodsIshikawa Fishbone, Toyota, RCA Mock RCA

Policy Coverage

5/14/2014Adam R. Ratliff, P.E. 3


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WHY WE SURVEY

For any given loss, an on-site survey often provides the best

opportunity to

Document and independently verify the nature and extent of damage

Investigate the cause of loss

Interface directly with those that witnessed the loss first hand

Develop rapport with the Assured through face-to-face contact

Discuss remediation strategies and timetables with those conducting repairs

Align the Assureds expectations with the realities of the loss and claim process

Bring early light to any possible coverage limitations for the Assured

Collect information (documents, photos, reports, etc) relevant to the loss



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TO SURVEY, OR NOT TO

SURVEY

Question Adjuster should be able to answer:

How might the survey provide value to Insurers?

Typically a survey is conducted, unless:

There is nothing left to see/observe

Cost of survey not justifiable given potential exposure

Agreed value item(s) clearly demonstrated to be CTL

Specifically instructed by Insurers otherwise



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THE IMPORTANCE OF

TIMING

AFTER the site/scene has been made safe & accessible

Fire is out

Well is brought back under control

Hazardous materials cleaned up or controlled

Temporary scaffolding or manlift (if at elevation)

BEFORE clean-up and repairs are undertaken

Document and inspect the virgin scene

Witness all damages

Prevent spoliation, preserve and protect evidence

Participate in the Assureds causal analysis Early engagement of experts (legal, CFI, engineering, etc.)

Timely notice to other interested parties



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MECHANICS OF A

ROUTINE SURVEY

1. Site-specific safety training

2. KOM with the Assured on location or nearby office

3. Field survey to document and assess damage

4. Investigate cause(s) of loss5. Identify any potential need for preservation

6. Interview witnesses

7. Obtain copies of any additional information

8. Discuss observed damage and remediation strategies9. Discuss causation and any potential ramifications

10. Close out meeting with path forward and action items



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3. FIELD SURVEY TO DOCUMENT

AND ASSESS DAMAGE

Before taking the field Travel Arrangements / Directions

PPE & Necessary Credentials

Satellite Images

Media Coverage

Asset lists

Drawings and Plans


920440 TRUCKS / TRACTORS (>1.5 TON CAPACITY) 2007 PETERBILT TRACTOR UNIT #4101 Pregel / Hydration Unit -$

931339 ACID TRAILER 2011 T roxell Acid Trailer w 4000 Gal Tank (2 comp art Gel Tanker 130,000$

920467 TRUCKS / TRACTORS (>1.5 TON CAPACITY) 2006 PETERBILT TRACTOR UNIT #4105 Chemical Float 1 88,000$920833 TRUCKS / TRACTORS (>1.5 TON CAPACITY) 2000PeterbiltTractor Chemical Float 2 88,000$

922108 TRUCKS / TRACTORS (>1.5 TON CAPACITY) 2006 PETERBILT 379 TRACTOR UNIT #4461 Gel Tanker 88,000$

922114 TRUCKS / TRACTORS (>1.5 TON CAPACITY) 2006 PETERBILT 379 TRACTOR UNIT #4473 Blender 88,000$

922211 TRUCKS / TRACTORS (>1.5 TON CAPACITY) 2007 PETERBILT 379 TRACTOR UNIT #4452 HHP Pump Truck 1 88,000$

922355 TRUCKS / TRACTORS (>1.5 TON CAPACITY) 2006 PETERBILT TRUCK UNIT #4444 HHP Pump Truck 3 88,000$

931783 TRANSPORT TRAILERS 2006 SS Blender 130 BBL Trailer Pregel / Hydration Unit 300,000$

931927 TRUCK / TRACTOR TRAILERS 2011 J & J FRAC PUMP T RAILER UNIT #4222 HHP Pump Truck 3 380,000$

110539 Transmission CAT TH55-E70 TRANSMISSION UNIT #4222 Transmission 120,000$

141556 Engine CAT 3512C HD ENGINE UNIT #4 222 Engine 180,000$

160712 Pow er End GARDNER DENVER 2500Q PUMP UNIT #4 222 Pump 280,000$

SCHEDULED

AMOUNTAsset # Equipment Type Asset Description Field Use / ID


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AND ASSESS DAMAGE

Typical Methods Employed:

Structured site walk through with Assured designee

Observe/discuss damage, ask questions, and record field notes

Orderly photographs with field note annotation

Field measurements (tape, wheel, inclinometer, straight-edge, square)

Develop damage inventory with nameplate or other unique asset identifier

where possible

Redline drawings, plans, or satellite imagery

RECOMMENDATION: GIVEN THE OPPORTUNITY, ATTEND ONE



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AND ASSESS DAMAGE


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4. INVESTIGATE THE

CAUSE(S) OF LOSS



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4. INVESTIGATE THE

CAUSE(S) OF LOSS

Noteworthy Definitions:

Root Causean initiating cause of a causal chain, commonly considered the

depth in the causal chain where an intervention could reasonably be implemented

to prevent a particular outcome.

Proximate Cause- an event which is closest to, or immediately responsible for

causing some result

Distal (Ultimate) Causeoften used interchangeably with root cause; the high-

level cause for some end result; often considered the real reason something

happened

Efficient Proximate Causefrom insurance law doctrine, the predominant cause

which sets into motion the chain of events producing the loss, which is not

necessarily the last act in the chain, nor is it necessarily the triggering event.



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4. INVESTIGATE THE

CAUSE(S) OF LOSS

Example 1: Causal Chain

Causes for Weight Gain:

Proximate Constant/Frequent eating

Root

Refrigerator magnets

Distal (Ultimate)

Poor oral hygiene



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4. INVESTIGATE THE

CAUSE(S) OF LOSS

Ishikawa (Fishbone) - Method for Simple Non-Linear Systems



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4. INVESTIGATE THE

CAUSE(S) OF LOSSExample 2: Causal Chain

1. END RESULT: House destroyed by fire

2. Boy ignited papers with a lighter under house

1. AND Boy had access to a lighter

2. AND Boy likes to play under house

3. Boy becomes bored

4. Dad left Boy unsupervised

5. School is closed

6. Teachers went on strike

7. Teachers became distraught over flat wages

8. School tax levies failed for 5 straight years

9. Local economy depressed by Big Auto plant closure

10. Big Auto Co. lost competitiveness, foreign manufacturing

11. thru 2,347. ----OMITTED-----

2348. The Big Bang

2349. And God said, Let there be light,


Boy sets house on fire withlighter

A four-bedroom house was destroyed by fire on Friday after a

seven-year-old boy played with a cigarette lighter on the

premises. The father said he left his son alone at home to go

on a job. He stated, "Teachers were on strike and he did not go

to school. Parents, this is a lesson. Never leave children at

home alone. Fire broke out at the concrete and wooden house

around 2.30 p.m. He said the child told him he was playing

with a lighter under the house, and papers caught fire. When

the flames grew, the boy ran to a neighbour's house.

Fishbone

How distal is too distal

5 Whys (Toyota)

FIRE

Boy has

LighterBoy plays

under house


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4. INVESTIGATE THE

CAUSE(S) OF LOSS

Bu t what about Complex Systems?The Ishikawa and Five Whys methods may still be useful techniques but often may

provide an incomplete description of the cause.

What makes Complex Systems so vexing for RCA?

Requires a holistic view of the system and its behavior to understand multivariate

causes and cascading effects

Typically involves a non-linear causal chain

Usually not a single plausible triggering event

Often more than one contributing root cause


COMPLEX RCA:

Form a diverse, multidisciplined incident response team to systematically

investigate, brainstorm, critically analyze, and evaluate the causal chain.


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Mock Group RCA

Incident:

A fire occurs in a refinery which appears to have originatedfrom a pump skid servicing the Hydrocracker. The pump

sends Gas Oil from the Crude Unit to the Hydrocracker.

Objective:

Determine the root cause of the incident and come up with a

reasonable intervention to mitigate or prevent recurrence

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4. INVESTIGATE THE

CAUSE(S) OF LOSS

5/14/2014Adam R. Ratliff, P.E.


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Quick Background:

Need all three components for fire to occur

Oxygen readily available

Chemical reaction ruled out

Need to identify source of fuel and heat

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4. INVESTIGATE THE

CAUSE(S) OF LOSS



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Possible sources of HEAT (IGNITION):

Open flames

No flames or burners present in the area

No welding or other hot work (grinding) at the time of loss

Electrical arcing

EE investigation unable to identify any evidence of arcing Nearby high temperature piping

Operating temperature of subject line is determined to be 700F (370C)

Contingent upon fuel source (pipe surface temp > fuel auto ignition temp)

No visible damage to insulation or jacket; unlikely source

Pump driver (diesel engine) exhaust

Exhaust gas temperature for diesel engine 1,000-1,200F (540-650C) Observed fire and heat damage to the exhaust shroud

probable source of heat (CFI jargon: a competent source of ignition)

Lightning Strike

Reviewed weather data and STRIKEnet (www.weatherfusion.com); no activity

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4. INVESTIGATE THE

CAUSE(S) OF LOSS

http://www.weatherfusion.com/http://www.weatherfusion.com/


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Possible sources of FUEL:

Combustible Atmosphere

No evidence of a flash or explosion

Area is gas monitored, no VOCs or other combustible gas/vapor warning

Gas Oil from Pump

No evidence of any fluid service leak Good maintenance history, no historic issues with leakage/seepage

Lubricating Oil or Fuel from Driver (Diesel Engine)

Fuel lines and various aluminum valve covers melted by fire

No visible pre-fire failures or maladies noted during inspection

ECM download shows no abnormal operating condition prior to fire

Overhead Pipe Rack Leak from a bolted flange found directly above diesel engine

Unit operator and maintenance aware of leak, quickly point out it is a water line

Housekeeping Item

Oily towel or glove left on hot surface (e.g. diesel engine exhaust) by maintenance

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4. INVESTIGATE THE

CAUSE(S) OF LOSS



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Conclusions we might consider at this point:

Maintenance Item

Have not ruled out, but also have no evidence to prove

Undetermined

May be warranted if coverage is reasonably assured (exclusions excluded) Insurers should be consulted

Intentional / Willful (Arson)

Fire investigator could test for the presence of an accelerant in debris

But accelerants are mostly hydrocarbon-based fuels and this is a refinery, so?

If this will have direct impact on coverage, burden of proof ought be high

Spontaneous Combustion

Still need an initiating fuel even if ignition was unexplainable

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4. INVESTIGATE THE

CAUSE(S) OF LOSS



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Did we miss something?

If further investigation is prudent, this is always a good time to revisit, reconsider,and retest any underlying assumptions previously made.

Assumption:

Leak from water line not combustible/flammable

Turns out the water has a high oil content, the constituents of which haveauto-ignition temperatures well below diesel exhaust temp

It is then concluded that oily water impinging upon the diesel engine

exhaust from the leaky joint is the most probable cause of the fire

Is this the root cause? As important, is this the cause of interest underapplicable insurance law?

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4. INVESTIGATE THE

CAUSE(S) OF LOSS



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4. INVESTIGATE THE

CAUSE(S) OF LOSS

Recall these definitions:



to prevent a particular outcome.

Proximate Cause- an event which is closest to, or immediately responsible for

causing some result



happened





4


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An argument could be made that we have the following concurrentperils present in this case:

1. Hot diesel exhaust shroud

2. An oxygenated atmosphere

3. Leaky flange on an O/H water pipe

4. Unexpected flammable constituents in water

Do all 4 pass the but for tests?

Are all 4 substantial factors?

Which had the most significant (predominant) impact in bringing about the loss?

Question:

Should we seek to understand why the water was contaminated?

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4. INVESTIGATE THE

CAUSE(S) OF LOSS


YES

#4

Efficient Proximate (Predominant) Cause

Only 3 & 4


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For the sake of argument, we push deeper in to the causal chain

So why did the water contain an unexpectedly high oil component?

Following the water line upstream we find it is the water outlet of a 3 Phase

Separator.

So now we investigate the 3 Phase Separator

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4. INVESTIGATE THE

CAUSE(S) OF LOSS



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Example 3 Phase Separator

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4. INVESTIGATE THE

CAUSE(S) OF LOSS


The Bad Actor


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Possible causes for high oil content in water outlet

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4. INVESTIGATE THE

CAUSE(S) OF LOSS

CAUSES PROPOSED

1. Inlet flow stopped

2. Oil outlet plugged3. Oil LT failed

4. Oil LC error

5. Oil LV stuck/FC

6. H2O LT failed

7. H2O LC error

8. H2O LV stuck/FO9. H2O bypass open



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Conclusion:Investigation determines that the bypass valve on the water outlet was left open

following recent maintenance activities, thereby allowing oily water to escape via the

water outlet prior to separation

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4. INVESTIGATE THE

CAUSE(S) OF LOSS

5/14/2014

Adam R. Ratliff, P.E.


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4. INVESTIGATE THE

CAUSE(S) OF LOSS

Recall these definitions:



to prevent a particular outcome.Proximate Cause- an event which is closest to, or immediately responsible for

causing some result



happened




5/14/2014



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COVERAGE CONSIDERATIONS

Consideration of wording in respect of:

Conditions Precedent

Conditions

Warranties

Exclusions

Ensuing Loss

5/14/2014



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QUESTIONS?

5/14/2014

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The Basis Principles and Practices of Surveying and Investigating 8 May 2014

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