HOT WORK

Any operation producing heat, open flames or sparks that introduce an ignition source qualifies as hot work. If hot
work is taking place in your facility, proper management protocols should be followed to help mitigate the risk of
potential fire and guide response if a fire should occur. The FM Global Hot Work Permit System is a valuable tool
designed to help manage hot work.

What is Risk Engineering in insurance?

Risk Engineering solutions help businesses of all sizes build resilience to today’s evolving, interconnected risk
landscape by helping them manage loss control, mitigate risk, improve safety and reduce claims. These services add
an important layer of protection for companies by providing holistic solutions before, during and after an event.
Simply put, companies that manage risk effectively operate more efficiently and effectively. Risk Engineering is key to
a comprehensive risk management strategy, giving businesses an edge in a competitive marketplace.
Engineering Inspection

Certain types of plant and equipment require mandatory engineering inspection on a regular basis. In order to
ensure the safety of everyone involved with the equipment, these inspections must be carried out by a qualified
person. 

Typical examples of plant and machinery required to be inspected are lifts, compressors, or plants fitted with
hydraulics, chains, wires or ropes. Also, any mechanical extraction system used to control hazardous substances.

Alan Boswell Group can provide all the inspection services and support you need:

 Ensuring compliance with legislation

 Full documentation of inspections

 Annual contract

 Competitive pricing

Engineering inspection is an area often overlooked by businesses in the UK, but we can help. Our in-house
engineering surveyors will work with you to identify which items of your work equipment require inspections and
establish how frequently these checks are required. We will also carry out the appropriate inspections, ensuring
you meet your legal requirements.

Engineering inspection in detail

Engineering inspection follows four simple steps:

 Insurance experts  We will identify if you require engineering inspection and for which items.

 Inspections  Will be carried by our qualified, in-house team of specialists.

 Ongoing inspection  Will be carried out by our engineering surveyors to continually ensure you comply
with regulations.

 Paperwork  Is provided, so you have a record of which equipment was inspected and when your next
inspections are required.

Subject to renewal of the engineering inspection, this process will continue as and when items of plant and
machinery are due for inspection.

Failure to have items of your plant and equipment checked means any potential liability claims may not be
covered by your insurance. This can also lead to prosecutions. It is vital to seek professional guidance about your
obligations.
Engineering inspection cover and engineering insurance

Engineering inspections are important to ensure that the machinery and equipment within your commercial building
are safe to use. In fact, it is a legal requirement for a competent person to regularly assess certain items.

These may include, but are not limited to:

 Passenger or goods lifts (including stair lifts, car parking systems and window gantries)

 Pressurised boiler systems

 Lifting equipment (including forklift trucks and cranes)

 Items involving the use of wires, chains, ropes or hydraulics

 Compressors and pressure systems

 Electrical installations

What does an inspection involve?

An inspection will involve a competent person visiting your premises on a regular basis, where they will assess the
necessary machinery and equipment. They will then produce a report of their findings which will need to be made
available to you, any prospective purchasers, solicitors, mortgage lenders and/or the Health & Safety Executive.

The report will confirm which items have passed the inspection, meaning they adhere to current, legal safety
standards; and which have failed and require remedial action to enable it to pass. You have a duty to take steps such
as placing notices on equipment which failed the inspection, advising the public and/or employees that it cannot be
used. Further inspections can be arranged once you have addressed the issues associated with the failed items.

Demonstrating safety best practice

It may also be necessary, let alone prudent, to arrange inspections for items within your property that aren’t a
statutory requirement. Doing this will help to ensure all machinery and equipment is adequately maintained and is
functioning to a suitable standard – and, it will foster best practice for safety measures conducted in your premises.

Engineering statutory inspection and insurance

Along with providing inspection services, Stride can arrange machinery insurance cover for your equipment. 

If, for instance, a piece of equipment in the building is damaged because of a power surge, the cost to repair or
replace it can be significant. If you have insurance, your policy will recoup these costs minus any excess you agreed.
So, it can provide a vital lifeline in these circumstances, ensuring you aren’t out of pocket and helping you to get
back to business as quickly as possible.

Speak to the experts at Stride

If you’re looking for quality engineering inspection and engineering insurance for a price that won’t break the bank,
look no further than Stride.

We’re an independent broker that has worked with the UK’s top insurers – such as Zurich, AXA and Aviva – for well
over 40 years. The relationship we’ve built with our partners means we have access to the best policies at highly-
competitive rates.

As we’re independent, we’re able to offer impartial advice and we only ever recommend cover we know is right for
you. Plus, we’re there to support you through the entire policy lifecycle, whether you need to speak to our in-house
advisors about an upcoming inspection, or need assistance claiming on your policy.

The Stride Commercial Insurance Team are waiting for your call – phone us today on 023 9224 8780 or get an online
quote.
Engineering Insurance and Inspection Services

Failure of mechanical, electrical or lifting equipment can be costly and disruptive to leaseholders and tenants, and
could cause you major problems.  This is where Engineering Insurance & Inspection Services cover can help ensure
your equipment is properly maintained and provide peace of mind.  

Independent engineering inspections help identify problems early, enabling you to organise and plan for repairs
before a major failure occurs.  With no vested interest in the outcome independent inspectors are unlikely to be
biased, which means only necessary repairs are usually identified. Some inspections are a legal and statutory
requirement.

Passenger lifts, for example, have to be inspected twice annually (Health & Safety Executive). Insurance against
breakdown can also be added to a policy. It provides cover for the cost of repairs, so there will be no need to raid the
management fund if the unexpected happens.

All blocks depend on the efficient working of plant and equipment, such as lifts, boilers, lighting and pumps.
Unexpected failure can disrupt your life and may increase costs. Failure of mechanical, electrical or lifting equipment
can be costly and disruptive to the leaseholders and tenants, and cause you major problems.

 Independent engineering inspections help identify problems early, enabling you to organise and plan for
repairs before a major failure occurs.

 Independent inspectors, who are unlikely to have a vested interest in the outcome, are more likely to
identify only necessary repairs.

 Some inspections are a legal and statutory requirement. Passenger lifts, for example, have to be inspected
twice annually, not least to meet health and safety legislation.

 Insurance against breakdown can also be added to a policy. It provides cover for the cost of repairs, so there
will be no need to raid the management fund if the unexpected happens.

Are you breaking the law?

It is a legal requirement for many types of plant and machinery to be inspected on a regular basis. Unfortunately,
some people believe engineering inspections are only desirable rather than essential.
The purpose of an inspection is to make sure the equipment is safe, it does not replace maintenance. An
examination by a qualified inspector will:

 Detect defects and weaknesses

 Ensure the safety and continued use of the equipment

 Be sufficiently independent and impartial to allow objective decisions to be made

The items listed below have to be inspected, either as a legal requirement or to comply with other statutes and, not
least, to meet the requirements of your insurance policy.

LOLER – Lifting Operations and Lifting Equipment Regulations 1998

 Passenger lifts – Every 6 months

 Goods lifts – Annually

 Lifting accessories (tackle) – Every 6 months

 Vehicle lifts – Every 6 months

 Window cleaning gantry – Annually

PSSR – Pressure Systems Safety Regulations 2000

 Steam boilers and steam ovens – Every 14 months

 Any equipment operated by steam – Every 26 months

 Hot water boilers (>100°C) – Every 14 months

 Other pressure systems – Every 26 months

Electricity at Work Regulations 1989

 Electrical installations & equipment – Every 5 years

 Electric gates and barriers – Every 12 months

Inspection Services

Inspections are necessary for equipment where there are significant health and safety risks (H&S) as a result of
incorrect installation, reinstallation and deterioration. Regular inspection can prevent potential hazards, save money
and ensure compliance with UK H&S laws.

Machinery and plant all have varying inspection periods, depending on the type of equipment and includes items
such as lifting equipment, boilers and electrical installations.

Inspection guide – What you need to know

What to expect from an inspection:

 Tests should be performed on site by a qualified engineer or surveyor, who may also provide advice on
maintenance and usage.

 You will be issued with a “Certificate of Inspection”. Similar to an MOT for a car, this will also highlight any
faults or defects that need fixing.

 Anything considered dangerous may result in the plant being taken out of service until it is repaired.

Lifting equipment

Passenger lifts – Inspected: 6 months

It is a legal requirement for lifts to be inspected by an independent competent person. Inspections should not be
carried out by the same person responsible for maintenance due to conflict of interest. Be aware that a maintenance
plan may not include all statutory inspection requirements. Keep a record of inspections and a copy of the inspection
certificates with your insurance documents. To help comply with the 1998 ‘Lifting Operations and Lifting Equipment
Regulations’ (LOLER), insurers offer a stand alone inspection service, separate to an Engineering Insurance policy.

Lift Car Guide Rail – Inspected: 12 months

Examination of the lift car guide rail in the shaft is essential. If faulty the lift could list, causing extensive damage and
harming anyone inside.

Good lifts – Inspected: 12 months

Goods lifts are for carrying goods only and should never be used to carry people. Falling lifts and trapped limbs are
among the most common risks.

Pressure plant
Inspections will depend on the type of pressure system(s) you have. In blocks of flats these are listed below:

Hot water boilers – Inspected: 24 months

Hot water boilers keep the water temperature below 100ºC and typically provide heating of water for domestic and
commercial use.

Pressurised hot water boilers –  Inspected: 14 months

They are susceptible to corrosion and fatigue caused by excessive scale in the system.

Refrigeration Plant – Inspected: 48 months

Typically used for air conditioning, the main risk for refrigeration plant failure is pressure failure due to corrosion and
fatigue.

Electrics

Under the Electricity at Work Regulations Act 1989, it is a legal requirement to ensure the safety of electrical devices
in blocks of flats, which are considered commercial premises for insurance purposes.

Wiring circuits Inspected: 3-5 years

Electrical wiring installations vary widely in complexity. To avoid shocks, burns and worse, the communal areas of
blocks of flats have to meet strict health and safety standards determined by the government.

Alternators Inspected: 12 months

Alternators can be used as a backup in the event of an electrical power failure or interruption. Inspections identify
obvious signs of wear and deterioration.

Motor Inspected: 24 months

Inspection of engines, motors, pumps and compressors are essential. In July 2010 a five-year-old girl was crushed to
death by an automatic gate because it was faulty and did not meet British safety standards.

Engineering insurance

Most claims fall under two main causes:

 Accidental damage

 Mechanical breakdown

Mechanical breakdown is usually defined as:

 Sudden stoppage caused by a mechanical or electrical defect in the plant

 Fracturing of any part of the plant caused by frost and which requires repair or replacement before the plant
can resume normal working

Most policies are worded to cover ‘Sudden and Unforeseen’ damage, which often also includes explosion, collapse
and accidental damage. ‘Sudden and Unforeseen’ damage would cover immediate repairs or replacement.
The policy holder merely has to prove the damage was both ‘sudden’ and ‘unforeseen’. The onus rests on the insurer
to prove that any loss or damage was the result of an ‘excluded’ cause.

Examples of scenarios covered*:

 Smashed glass in the lift when property is being moved in or out of the building

 Short circuiting

 Over voltage

 Faulty operation or non-operation of safety or protective devices

 Faulty operation or incorrect operation of equipment

 Boilers and pressure plant: Sudden and Unforeseen Damage includes cracking, fracturing water-hammer
action and frost

What if…

Mechanical Damage
A lift breaks down with people trapped inside. The fire brigade is called and during the rescue operation, damage is
caused to the lift door and opening mechanism. A claim is submitted for
costs to replace the doors and fitting; very labour intensive and very expensive.
Total cost: £10,071*

Mechanical Damage
The motor on a lift is relatively new, under five years old, and the encoder has stopped working. The lift develops a
levelling problem which has raises health and safety issues. The costs of works includes a replacement encoder and
labour charges.
Total cost: £1,201*

Accidental Damage
The lift is out of order following a power surge during an electrical storm. A lift engineer is called to identify the
cause of the problem and finds the lift’s lighting and safety control box has fused. These are removed from the main
circuit and diagnostic checks reveal that the main circuit board and software is corrupted.
Total cost: £6,344*

* Based on actual claims received for similar work in 2017.

Key features of our engineering policy

1. Inspection services
Independent inspections of equipment to meet your statutory obligations. This applies to equipment such
as:
– Lifts
– Boilers
– Window cleaning hoists and cradles
– PAT Testing of portable electrical equipment
Independent inspection of any plant to ensure these are safe to use, and in good working order.

2. Insurance protection
Breakdown and other unforeseen damage for mechanical and electrical plant
Explosion and/or collapse of boilers or other equipment operated under pressure
Cover includes a range of extensions including consequential losses, temporary hire of replacement
equipment and professional fees incurred in investigating losses
Equipment is insured on a “replacement as new” basis
Check list of engineering plant located at blocks of flats – When did you last check?

 Electric gates and barriers

 Garage doors & roller shutters

 Lifts

 Plumbing and heating systems

 Fuse boxes

 Window cleaning pulleys

 Heat exchangers

 Back-up generators

 Air conditioning and ventilation units

 Disabled access systems

 Doors and intercoms

 Smoke alarms, fire hydrants and doors

 Lightening protection systems

 Pool/spa cover systems

 Security lighting

 Sprinkler systems

If you have any questions regarding what plant does require inspection by law please contact us to discuss. For a
copy of our guide to Engineering insurance and inspection services and the cover provided under a standard
policy* click here.

Frequently Asked Questions

What is covered by Engineering and Inspection Services Insurance?

The purpose of an inspection service is to make sure communal equipment, such as, lifts, boilers, electric gates etc.
are safe to use and inspected to minimum legal requirements. You can also insure such items against breakdown and
other forms of damage.

Do I need Engineering insurance and Inspection?  

Engineering insurance is not a legal requirement and you are free to decide whether you buy this protection or not. 
However, depending on the type of plant, there are a number of regulations that stipulate it must be inspected by an
independent and competent person to ensure it is safe to use. The regulations specify how often these inspections
must be carried out. The most common types of plant requiring inspection are lifts and pressure vessels.

Why have an Inspection Services?

It is a legal requirement for many types of equipment and machinery to be inspected on a regular basis, such as lifts,
boilers, water pressure systems, electrical wiring, etc.  As well as ensuring your operation is legal, it is good business
practice and often small issues with the equipment that can be identified early and easily repaired, helping prevent a
major and costly failure later. Serious fines and penalties can be imposed for failure to comply, particularly if there
has been an accident and it can be proved that plant was not inspected and maintained in accordance with
regulation.  

Can’t find an answer to your question?  Simply email your question to us at info@deacon.co.uk
Fire Risk Assessments

Fire risk assessments for blocks of flats

The Fire Safety Order (FSO) 2005, otherwise known as the Regulatory Reform Order, applies to all the communal
areas in a block of flats, including rooms used by caretakers and concierges, or for storage. It also extends to plant
rooms and outbuildings. It does not apply to the individual flats.

The legislation to reduce the risk of loss of life puts additional responsibilities on those who manage property.  This
includes the directors of RMC and RTM companies.

If, as a result of a failure to properly carry out a fire risk assessment someone in the building or its immediate vicinity
is put at risk of death or serious injury from fire, then an offence is committed which could lead to significant fines or,
in serious cases, even a custodial sentences.

I live in a block of flats, do I need a fire risk assessment?

If your block of flats has common communal areas – hallways, stairwells, boiler rooms, etc –  then yes, you are
required under FSO regulations to carry out a fire risk assessment.

The FSO necessitates that a Responsible Person must undertake an assessment of the fire risks and maintain a
record which must be reviewed and kept up to date.

When carrying out a fire risk assessment the Responsible Person needs to be able to:

 Carry out the assessment identifying any dangers

 Provide advice on how to reduce the risk

 Provide documentary evidence of the assessment

Why do I need a fire risk assessment?

The courts take fire safety very seriously and people responsible for property have been fined and imprisoned for
failing to comply with the legislative requirements properly, thereby endangering life.  Particular reasons for which
convictions may be given include but are not exclusive to:

 No or insufficient smoke alarms

 Absence of a fire detection systems

 Inadequate fire doors

 Build-up of waste in a boiler room or using communal areas for storage.

 No emergency lighting

 No fire extinguishers or fire blankets available

What should my fire risk assessment cover?

Here are some of the things you need to consider when conducting a fire risk assessment report.  To ensure your
report meets FSO requirements we would recommend using a specialist Fire Risk Assessor who has the experience
and knowledge to develop a comprehensive report.

Scope of a fire risk assessment report

 Identify the premises being assessed

 Identify the fire hazards affecting your premises

 Evaluate, remove or reduce the risks of fire

 Record your findings and prepare an emergency plan

 Provide training if required; and document it

 Review and update your fire risk assessment regularly

You’ll need to consider

 emergency routes and exits

 fire detection and warning systems

 fire-fighting equipment

 the removal or safe storage of dangerous substances

 an emergency fire evacuation plan

 the needs of vulnerable people, for example the elderly, young children or those with disabilities

 providing information to residents and anyone working on the premises (even if only on a contract basis)

 include any training.

 communicating your action plan so that residents know what to do in the event of a fire.

The report should be reviewed and approved by the Directors of the RMC or RTM company.  Any actions agreed to
reduce risk should be documented and followed up.

Where can I find a competent Fire Risk Assessor?

If you are the director of an RMC or RTM company, or are responsible for managing your block, then you are
deemed the ‘responsible person’ and legally obliged – as per the requirements of the Regulatory Reform (Fire
Safety) Order 2005– to conduct a fire risk assessment.
If you’re not sure your current fire risk assessment’s been carried our property, then your local fire and rescue
authority might be able to help you identify a locally competent Fire Risk Assessor – but they  can’t carry out risk
assessments for you.

Many people lack the expertise or time to do a fire risk assessment, or are simply not comfortable taking on the
responsibility of such an important task.  This is where a professional Fire Risk Assessor can help.

It’s worth noting that even if you appoint an external Fire Risk Assessor you, as the responsible person, can still be
held accountable if mistakes are made.

You are not expected to be an expert in fire safety, but you are expected to make reasonable checks to ensure that
the person carrying out the assessment is adequately qualified and experienced.

Tips for finding a Fire Safety Assessor

The London Fire Brigade offers these 8 tips to find a competent Fire Safety Assessor:

1. Ensure they are on a professional fire risk assessor register and that they meet the competency criteria
established by the Fire Risk Assessment Competency Council.

2. Check that they have experience of undertaking fire-risk assessments for your kind of business and premises

3. Request references from previous clients in premises of your type

4. Ensure that the scope of the work you want carried out is agreed in

5. Ensure that you provide the assessor with access to all areas and information

6. Obtain alternative comparable quotes

7. Ask for proof that they have sufficient insurances

8. Keep records of the steps you took in selecting your fire risk For more information on fire-risk assessments
visit http://www.londonfire.gov.uk/FireRiskAssessment.asp

You can find more guidance on Fire Safety Risk Assessments on the ‘National Fire Chiefs Council’ (links
to  https://www.nationalfirechiefs.org.uk/Finding-fire-risk-assessor) website.

It is important to remember that blocks of flats are considered commercial premises, i.e. non-domestic
premises.  So everything from 2 flats in a converted house to more than 200 flats in a purpose built
block, is considered commercial property and subject to Fire Safety Order legislation.

Disclaimer:  This article does not purport to be comprehensive or to give legal advice. While every
effort has been made to ensure accuracy, Deacon cannot be held liable for any errors, omissions or
inaccuracies contained within the document. Readers are always recommended to take further
professional advice before making any decisions.

Deacon
8 things you need to know about engineering inspections

17/05/2017  Blog  Alan Boswell Group

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If you’re a business using any type of equipment, we’re sure you know that you should be carrying out regular
checks to make sure everything’s safe and in good working order. All work equipment and machinery should be
subject to regular engineering inspections by competent engineers and maintained as set out in The Provision and
Use of Work Equipment Regulations (PUWER).

What you may not be aware of is the failure to arrange these checks may mean you are served an improvement or
prohibition notice by the authorities. In extreme cases, you may even be prosecuted.

And even if specialist engineering inspections aren’t a legal requirement for your equipment, regular inspections
constitute best practice. They improve workplace safety, may reduce the risk of legal action by the authorities,
injured employees or site visitors — and in some cases reduce your insurance premiums.

Below is a list of eight essential facts about engineering inspections to help make sure your workplace is safe and
legally compliant.

1. Many different kinds of equipment require inspection

All plants, machinery and equipment require regular inspection. This includes electrical installations, lifting
equipment, compressors and pressure systems, and local exhaust ventilation (LEV) systems.

Any items involving the use of hydraulics, wires, chains or ropes should also be inspected at pre-determined time
parameters.
Employers and owners are all responsible for ensuring that appropriate inspections are carried out as often as
required.

2. There are specific legal requirements for certain types of equipment

The Provision and Use of Work Equipment Regulations (PUWER) 1998 covers most work equipment where safety is
at stake, including power presses.

The Lifting Operations and Lifting Equipment Regulations (LOLER) 1998 apply to all lifting and ancillary lifting
equipment, including lifts, cranes and cherry pickers.

The Pressure Systems Safety Regulations (PSSR) 2000 apply to most work systems operating under pressure. These
require owners and operators to establish safe operating limits with regards to pressure and temperature, as well as
carrying out proper maintenance, providing clear operating instructions and ensuring inspections in line with an
appropriate written scheme of examination. This must be put in place before the system is first operated.

The Control of Substances Hazardous to Health Regulations (COSHH) apply to equipment that takes away fumes,
dust and vapours (LEV systems).

3. Engineering inspections are essential for workplace health and safety

Beyond merely meeting statutory requirements, however, regular inspections are essential for maintaining health
and safety in the workplace. The regulations set out above are designed to ensure this. Regular engineering
inspections are a major step toward ensuring your business is legally compliant.

Where items are not specifically covered by regulation, a risk assessment should be carried out in order to decide
whether the equipment needs to be regularly inspected – and, if so, how often.

Beyond health and safety, a minor fault gone unnoticed can cause a breakdown of the whole system. The results can
include loss of productivity, wasted time and an expensive bill for repair or replacement.

4. Regular engineering inspections can help to defend liability claims

If someone is injured because a piece of machinery you are responsible for is faulty, whether they are an employee
or a member of the public, they could sue your company for compensation. This kind of liability claim could cost
thousands of pounds, depending on the severity of the accident. Regular engineering inspections should prevent
such accidents happening in the first place. However, if they do occur, then evidence that the machinery in question
was regularly and thoroughly inspected will help in defending against any claims.

Regular engineering inspections should prevent … accidents happening in the first place

Of course, if the law requires statutory inspections and these have not been undertaken then you will almost
certainly be liable for prosecution. Even if inspections are not a legal obligation, proof they have been made will
show that best practice has been adhered to and that the company was conscientious in making sure that the
equipment was as safe as possible.

5. Inspections should be carried out regularly

The frequency of statutory engineering inspections will be clearly set out in the relevant regulation wording. If that is
not the case, you must determine how often a piece of machinery should be inspected based on risk, likely rate of
deterioration, how often it is used and so on.

A brand new piece of machinery will have been inspected before leaving the factory and/or wholesaler, but a date
should be set for a thorough on-site inspection.

6. Inspections must be made by a qualified, independent body

All engineering inspections, whether mandatory or not, should be made by a person who is both competent and
independent. They should possess the necessary knowledge to make an informed judgement as to whether the item
is safe and fit for purpose, and should have appropriate accreditation to this effect.
They should also be from outside the company, with no conflict of interests. Their decision should be informed by
the facts in front of them and not be influenced by any other considerations.

7. It is important to keep records

All engineering inspections should be logged and the results properly documented. Records and paperwork should
be stored safely and securely. They must be readily accessible when required, such as at the next inspection date or
in the event of an incident. The records are evidence that inspections have been carried out. They help demonstrate
that you are meeting your legal obligations and fulfilling your duty of care regarding workplace health and safety.

8. Engineering inspections are a vital part of risk management

Alan Boswell Group can provide regular engineering inspections by qualified specialist engineering surveyors as part
of an overall business risk management strategy. They will help you comply with your statutory requirements.
Regular, thorough inspections, supported by comprehensive documentation are the backbone of risk management
in the workplace. Contact us on 01603 967900 to find out more.
Safety first: The importance of engineering inspection and maintenance

Occasionally a dramatic news headline may grab our attention: “Coffee boiler explodes” or “Brake failure sends lift
plummeting”, for example. Such incidents, although thankfully rare, temporarily remind us that, when equipment
fails, the consequences can be severe.

Each day we come into contact with a wide range of equipment which requires regular inspection and maintenance
to ensure its ongoing safety and suitability for the job intended. Escalators and lifts are common examples, but there
are many more found both in work environments and in the public domain, including lifting platforms, forklift trucks
and cranes. Much like a car going in for its service and MOT, plant and machinery also needs regular checks to reveal
and subsequently fix defects and wear and tear.

Some employers may mistakenly believe that simply by maintaining their equipment, they are satisfying their legal
and moral duties. In fact, it’s crucial both to maintain and inspect plant regularly and there’s an important distinction
to make between the two terms.

The inspection of an item of plant or machinery is an activity carried out to identify any faults and defects before
they present an unacceptable risk. It does not replace maintenance, which rather relates to necessary fixes and
repairs which must be undertaken to bring a piece of machinery or kit back into full working order. As businesses
come under ever increasing pressure to evaluate the value of their spend, it might be tempting to look to cut costs in
the area of inspection and maintenance. This is not only a false economy, but also a risky strategy, with potentially
devastating consequences.

WHY IS IT NEEDED?
Failing to carry out both inspection and maintenance activities can lead to a catastrophic outcome for an
organisation for a number of reasons.

Firstly, there’s the risk of injury which can be sustained when using a defective piece of equipment. Examples include
entrapment, such as fingers being caught in moving parts of machinery; and explosion, where workers are hit by
fragments of the failed item. According to the Health and Safety Executive (HSE), there were 555,000 self-reported
non-fatal injuries in the workplace in 2017/18. Employers have a legal and moral duty of care towards their
employees and members of the public, to protect their health, safety and welfare; ensuring that plant and
machinery are safe to use forms part of this obligation.
Then there’s the risk of business interruption. Many companies rely on their equipment and machinery for keeping
things running smoothly. If an engineer judges it to be unsafe, and informs the owner that it should not be used until
all identified defects have been resolved, this could have serious repercussions for trade. For example, a car
workshop with a defective car lifting platform might not be able to book vehicles in for repair; or a factory may have
to pause or reduce production where workers are left unable to use an injection moulding machine. Wherever the
integrity of a piece of kit is deemed below standard and considered unsafe to operate, it could result in business
interruption. This can also have financial repercussions, such as loss of revenue and additional costs to bring
equipment back into working order. Further, there may be reputational damage, especially where a health and
safety breach makes the headlines.

Not least, there are potentially hefty fines for employers found to be negligent of carrying out appropriate inspection
and maintenance activity. There may also be associated legal costs where a case is brought against a company or
individual. In 2016, the Sentencing Council issued new sentencing guidelines for health and safety, corporate
manslaughter and food safety and hygiene offences. These include establishing levels of culpability and harm in
conjunction with the financial means or turnover of the defendant.

The current fine ranges for prosecutions under the Health and Safety at Work etc. Act 1974 are:

Companies with a turnover of not more than £2 million: £50–£450,000

Companies with a turnover between £2 million and £10 million: £100–£1.6m
Companies with a turnover between £10 million and £50 million: £1,000–£4 million
Companies with a turnover of £50 million and over: £3,000–£10 million.

WHAT EQUIPMENT NEEDS TO BE INSPECTED?

Any equipment which could pose a significant risk to health and safety needs to be inspected to ensure its ongoing
integrity and suitability for the job intended.

Whilst many of us use some items of equipment frequently, such as escalators and lifts, we are probably unaware
that they are subject to stringent health and safety laws. Lifts must comply with a piece of legislation called the
‘Lifting Operations and Lifting Equipment Regulations 1998’ (LOLER), meaning, amongst other things, they have to
undergo a periodic thorough inspection. Escalators and moving walks don’t fall under the requirements of LOLER;
however they are also subject to regular, comprehensive inspections to ensure they are safe for continued use.

Named amongst the most dangerous pieces of apparatus used in industry are power presses. Falling under the
Provision and Use of Work Equipment Regulations 1998 (or ‘PUWER’), most power presses require a full inspection
every six months. The constant demand placed on the guarding mechanism means that this part needs particular
scrutiny, as accidents with power presses have occasionally resulted in amputation, due to entrapment with the
moving parts of the equipment.

It’s vital that any inspection is carried out by a ‘competent person’; someone who has the necessary training, skills
and experience to assess the equipment or machinery in question. They are able to recognise the implications of any
defects identified and will know the actions to take. If a severe defect is identified, it could involve immediate
removal of the relevant equipment from use. More information can be found on the Health and Safety Executive
website.

HOW DO ENGINEER SURVEYORS INSPECT PLANT AND EQUIPMENT?

Engineer surveyors employ a variety of techniques when they inspect equipment.

Some items, such as cracks and breaks may be identified via a visual inspection to ensure they remain fit for purpose;
however other defects may necessitate the use of more detailed inspection techniques to identify them. Engineer
surveyors record any defects they find and categorise these according to severity.

Some less serious defects may require a minimal level of attention, but the equipment could remain safe to use for a
certain period of time. Other types of defect require immediate rectification and result in the equipment being taken
out of action until it has been fixed and deemed suitable for use again. Where a defect could pose, or already poses
a danger to people, the owner must be made aware immediately. Additionally, legislation such as the Pressure
Systems Safety Regulations 2000 (PSSR) and LOLER requires the enforcing authorities to be notified of a serious
defect and presented with a copy of the inspection report. The relevant authority may then follow up on the report
to ensure that the situation is satisfactorily resolved.

REMOTE VISUAL INSPECTION

Remote visual inspection (RVI) can be carried out where access would be challenging or unsafe for an engineer
surveyor. Consisting of a lens, viewing eyepiece and light source, the tool can be used to examine boilers, generators
and steam turbines, where construction permits, without the need to disassemble the equipment. This may also
take the form of remotely operated high definition video or digital camera systems, thermal imagery or other optical
camera methods. Whilst the technology was already being used in the 1970s, recent technological advances in
videoscope technology and digital stereo measuring are bringing significant time savings, plus improving the
accuracy of inspections.

NON DESTRUCTIVE TESTING (NDT)

As the name suggests, non-destructive testing allows a suitably qualified practitioner to inspect machinery without
destroying the serviceability of the part or parts. Such testing can take many forms including ‘magnetic particle
testing’, ‘ultrasonic testing’, ‘radiography’ and ‘vibration analysis’ as well as several other techniques. In some cases,
NDT can now be automated, helping speed up the process and allowing for inspection of larger components.

CONTINUOUS MONITORING
This refers to the process of continued monitoring of a facet of plant and machinery for any inconsistencies which
could indicate the presence of a defect. This can take many forms and technology often plays a key role. Methods
can range from vibration analysis, ultrasound testing and shock pulse monitoring (SPM). Various online monitoring
and diagnostic systems exist to detect where a piece of equipment is not performing as expected. Some systems
provide data on vibration frequency and severity, or can detect signals normally masked by machine noise, whereas
other devices monitor temperature.

DRONES
Although not yet widely used, drones (or ‘unmanned aerial vehicles’) are already being recognised for their benefits
in the field of engineering inspection. For equipment at height or in remote locations, such as cranes and bridges,
drones can reach areas which are not easily navigable for humans. Additionally their cameras can capture high
resolution images and transmit these to computers, allowing surveyors to detect issues before they become more
serious. The consequences of failing to meet the minimum standards of inspection can be severe for a company
and/or business owner and heavy financial penalties can be levied.

WHAT ACTION CAN EMPLOYERS TAKE?

Aside from ensuring that all plant and equipment is inspected regularly and in line with regulation, employers can
also take out insurance cover, such as machinery breakdown or machinery business interruption insurance. This can
help cover the cost of repair or replacement of machinery in the event that it suffers a breakdown, or is otherwise
damaged or lost.

Employers should also ensure robust risk management procedures are in place. These include the wearing of
appropriate protective clothing, such as safety glasses, hearing protection and safety shoes; having emergency stop
controls where necessary; and using fixed guards. Additionally, all employees should receive the necessary
information, training and supervision to perform their job safely.

SUMMARY
Inspection and maintenance are crucial activities for any business which requires workers to operate plant,
machinery and equipment or, through usage of equipment where members of the public are exposed to a risk to
their health and safety. Companies must ensure they employ competent individuals for the undertaking of such
activity and that it is performed at appropriate intervals. Failure to do so could lead to equipment malfunctioning,
resulting in business interruption, significant penalties and most seriously, injury and loss of life.

Source: Allianz Insurance plc

The profitability of engineering insurance could be coming to an end

by Alicja Grzadkowska 20 Jul 2018

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Compared to other specialty lines, engineering insurance has historically been relatively profitable, but stagnating
premiums and signs of deteriorating underwriting performance reveal that there could be a storm on the horizon,
according to Swiss Re’s newest sigma report, “Constructing the Future: Recent Developments in Engineering
Insurance.”

The Swiss Re Institute finds that engineering insurance premiums globally for 2017 were approximately US$21
billion and have the potential to rise to US$34.5 billion by 2027, though loss ratios are edging higher, reads the
report, and claims are rising in specific sectors of the construction industry.

Up until now, the historical profitability of this line of business could be attributed to several factors.

“We’re just seeing an absence of catastrophic loss events,” said Darren Lee Pain, senior economist at Swiss Re,
adding that there’s been a lack of big losses impacting this specialty recently, at the same time as there are barriers
to entry. “Engineering insurance is a pretty specialist part of the market. You require a lot of technical knowledge, so
not just anybody can write this sort of business.”

Because of the large-scale nature of many construction projects, it also tends to be international insurers with a
significant geographical footprint or big balance sheet with capital and knowledge who run those risks. Meanwhile,
natural catastrophe exposure has remained small compared to other exposures.

“Relatively speaking, the proportion of large claims associated with nat cats is relatively small compared to things
like faulty design or misuse of materials,” said Lee Pain. The sigma report shows that while the share of claims
caused by natural hazards has risen to 22.3% in the 2010s from 14.3% in the 2000s, faulty design, material and
operation holds the lead, accounting for 39.4% of the share of large claims.

There is, however, an opportunity for technology to step in and improve efficiency, leading to a risk landscape that’s
changed for the better. The Swiss Re report highlights design and planning software, data gathering and analytics,
and construction management – where Building Information Modeling (BIM) plays a key role – as areas where
technological change is coming, however slowly.

“The construction sector has historically been a laggard in terms of innovation. You only have to look at the
construction sites that you see around you day-to-day – a lot of what’s going on is manual and it’s probably using
similar techniques that would’ve been done 20, 30 years ago, but I think we’re seeing more evidence that there’s
maybe more digitalization going on within the sector,” said Lee Pain, highlighting BIM as an important technology
affecting construction. “Even small contractors are starting to embrace that, which is a standardized way to share
and exchange information about a building, and you coordinate both in terms of the physical dimensions, but also
maybe time, costs of the construction project.”

After a construction project wraps up, BIM makes it possible to build up the digital memory of a building and what’s
happening to it over time as its conditions change, according to the senior economist, though he adds that the
timeline of tech adoption, where it truly would shift the risk landscape, isn’t likely to take place as soon as some in
the industry think.

“You read things about how this is going to happen next week. I don’t think that’s realistic,” he said. “Construction
has been slow to innovate, but the direction of travel is clear.”

At some point, innovations and digitalization may well require a radical overhaul in how engineering insurance is
underwritten as data from sensors or BIM will help guide that underwriting process, said Lee Pain.

“Historically, engineering insurers have been pretty adept and agile about changing the ways that they do things on
the back of changing technologies for their clients,” he concluded.

Basically, we strive to provide to insurance underwriters a clear

picture of what they have bound for coverage, and give reasonable
assessments of risk from several points of view, in an easy-to-read
format that includes liberal photographs.  We make
recommendations that are fair and reasonable, and within normal
industry standards and common sense.

Which engineering inspections can your team carry out?

Our engineering surveyors can provide a range of statutory inspections,
ensuring you comply with the following: Lifting Operations and Lifting
Equipment Regulations (LOLER), Pressure Systems Safety Regulations
(PSSR) and Control of Substances Hazardous to Health Regulations
(COSHH), the latter in terms of Local Exhaust Ventilation (LEV)
examination and testing. The engineers also offer general
advice/inspections in line with the Provision and Use of Work
Equipment Regulations (PUWER).
It was developed to grant industry an effective insurance cover for
plant, machinery and mechanical equipment at work, at rest or during
maintenance operations.
By its very nature, machinery insurance is an all risks “accident”
insurance for machinery supplementing the coverage afforded by fire
insurance. Thus it covers unforeseen and sudden physical loss of or
damage to the insured items, necessitating their repair or replacement.
Loss or damage covered under machinery insurance is mainly due to
one of the following causes:
• Faulty design (calculations, plans, drawings and specifications)
• Faults at workshop or in erection
• Defects in casting and material
• Faulty operation, lack of skill, negligence, malicious acts
• Tearing apart on account of centrifugal force
• Physical explosion, flue gas explosion in boilers
• Electrical causes such as short circuit
• Shortage of water in boilers
• Storm, frost, drifting ice.
The sum insured should always be equal to the costs of replacement of
the insured machinery by new machinery of the same kind at the same
place (value of the new item plus customs duties plus transportation
and installation charges).
The premium rates charged are calculated separately for each type of
machine on the basis of statistics kept over a period of many years.
In the event of damage which may be repaired, the insurer will
indemnify the insured in respect of the expenses incurred for restoring
the damaged machinery to its working condition prior to the damage.
These expenses mainly include the costs for repair work and the
necessary spares, disassembly and reassembly costs, ordinary freight
charges, customs duties, expenses for the employment of specialists
and other charges contained in the sum insured.
In the event where an insured item is totally destroyed or where the
repair cost would exceed the actual value of the insured item, the
insurer will indemnify the insured the actual value of the insured item
immediately before the loss occurrence less the agreed deductible and
the value of any salvage.