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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
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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
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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
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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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3. FIELD SURVEY TO DOCUMENT
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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3. FIELD SURVEY TO DOCUMENT
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,
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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
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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
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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
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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:
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
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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
5/14/2014Adam R. Ratliff, P.E.
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
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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
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4. INVESTIGATE THE
CAUSE(S) OF LOSS
Recall these 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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COVERAGE CONSIDERATIONS
Consideration of wording in respect of:
Conditions Precedent
Conditions
Warranties
Exclusions
Ensuing Loss
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QUESTIONS?
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