Specialized Equipment Losses

1) Adjusting Team
a) proper engineer
b) experienced accountant
c) insured’s engineering and/or maintenance staff
2) Specialized Equipment Types
a) custom
i) one or a few built
ii) standard model was altered
iii) entirely built by the insured
b) foreign built equipment challenges
i) no local technical representatives
ii) manufacturer requires offsite repair
iii) language barriers
iv) a nonresponsive manufacturer
c) prototype equipment challenges
i) could be one in a succession of models
ii) identification as a prototype
iii) a model that never made it into full scale production
d) obsolete equipment challenges
i) manufacturer out of business
ii) equipment is no longer supported
iii) equipment is infrequently used
3) Recap
4) Quiz – Reinforcing Part 1 Materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Engineering Options
a) rebuild or repair
b) replace
i) alternative equipment
ii) alternative design
iii) used equipment
2) Economics
a) insurer has policy limitations
b) insured has short and long term business considerations
c) team approach
3) Safety
a) impacts decision on repair or replacement
b) OSHA
c) laws and ordinances
4) Repair Options
a) temporary
i) avoid BI
ii) must be safe for equipment & people
b) permanent
i) return to original state
ii) will loss re-occur
iii) enhancements to prevent repeat failure
c) example repairs/safety issues
5) Repair Viability
a) repair costs exceeds replacement costs
b) repair parts availability
i) OEM
ii) after market
c) availability of better design
d) managing expectations
e) does repair make technical sense
6) Temporary Repairs
a) sufficient to continue function
b) issues
i) time and economics
ii) lead time
iii) availability
iv) matching compatibility
c) safety
i) for machinery
ii) for people
d) reduced capacity issues
i) individual machine
ii) entire production line
e) negotiations
7) Permanent Repairs
a) defined
i) produces equivalent or better machine
ii) insured without limitation
iii) distinction between temporary
b) replace broken part
c) repair broken part
d) alter design to remediate problem
e) does it make engineering sense
8) Recap
9) Quiz – Reinforcing Part 2 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Choice of Repair Vendors
a) owner
i) challenges
(1) tools
(2) staff
(3) technical knowledge
(4) reverse engineering capabilities
ii) benefits
b) OEM
i) challenges
(1) locating
(2) potential for higher cost
(3) possible bias to new replacement
(4) repair experience
(5) rapid response
(6) litigation
ii) benefits
c) third party
i) challenges
(1) lack of prints and specifications
(2) lead engineer’s time may be limited
(3) if formerly OEM, technology may have changed
ii) benefits
(1) responsiveness
(2) apply concepts across product lines
d) example scenario
2) Weld Repairs
a) three “knows”
i) material construction
ii) failure cause
iii) duty cycle
b) OEM v. third party welder
c) technical justification
i) welding standards
ii) other guidelines and research
3) Reverse Engineering
a) defined
b) key elements
i) material composition
ii) measurements/dimensions
iii) measuring properties
4) Recap
5) Quiz – Reinforcing Part 3 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Reverse Engineering Challenges
a) composition problem
i) no domestic equivalent
ii) missing important constituent
b) dimension problem
i) measurement based on a failed part
ii) wear and erosion
iii) understanding design tolerances
c) microstructure/property problems
2) Enhancements
a) introduce new technology
b) apply knowledge learned from failure
c) replacement of certain worn parts
d) rebuilt machine may be better than used replacement
e) coverage for enhancements
f) business decision enhancements by insured
g) fortuitous enhancements at no additional cost
3) Recap
4) Quiz – Reinforcing Part 4 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Replacement Options
a) new
b) used
2) Sources
a) OEM
b) OEM successor
c) OEM competitor
d) used equipment broker
e) a competing business
3) Used Equipment Issues
a) warranty?
b) insurability?
c) inspection/assessment
i) wear
ii) age
iii) foot print
iv) capacity
4) Resources
a) competitors of the insured
b) internet research
c) word of mouth
d) networking
e) user groups
f) trade magazines
5) Regulatory Issues
6) Alternative Equipment
a) considerations
b) issues
i) retrain operators
ii) degradation of product
iii) will it physically fit?
iv) input the same raw materials
v) energy requirements
vi) permits
7) Logistics
a) main issues
i) offsite repair
ii) onsite repair
b) onsite issues
i) cranes & rigging
ii) disruption to other processes
iii) power/utilities limitations
c) offsite Issues
i) transportation
ii) permits
iii) examples
8) Recap
9) Quiz – Reinforcing Part 5 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz

1) Legal Concerns
a) stolen parts
b) patents
c) proprietary designs/methods
d) OEM warranty and cooperation
e) illegally labeled substandard parts
2) Economics
a) physical damage repair and replacement
i) labor and materials
ii) transportation
iii) expediting
iv) contingency
b) time element
i) business interruption
ii) extra expense
c) evaluation team
i) engineer
ii) accountant
iii) expeditor
iv) insured
3) Recap
4) Quiz – Reinforcing Part 6 materials
a) 5 multiple choice questions
b) 4 choices per question
c) A second quiz if less than 80% score on first quiz