I spend a lot of my time underwriting risks with claims and asking “What corrective actions have been implemented?” Recently I was thinking about this in a slightly different context-preemptive actions – wondering what companies should be doing as part of their ‘return to work’ risk management, particularly in respect of plant and equipment.
As governments around the world start to relax residential and commercial restrictions which have been in place over the last few months, businesses will be keen to get things up and running as quickly as possible. Before flicking the ‘on’ switch or hitting the start button it is important for businesses to take a moment to check that everything is functioning properly.
During the period of inactivity various problems may have occurred, for example small animals or birds nesting in pipes blocking exhaust extraction vents, or rodents damaging cables or pipes. Depending on the length of inactivity rubber components may have deteriorated and may need to be replaced before start-up. Also some businesses may have taken advantage of the shutdown to carry out maintenance: has equipment been fully re-assembled and all safety guards etc reattached?
Most industrial plants will have Standard Operating Procedures (SOPs) which deal with equipment shut down and re-start, but this may not apply to all businesses, especially SME’s. Often the re-start is not as simple as turning a switch, or reversing the steps in the shut down procedure. It is important to have the right people with the proper experience in charge of the process, usually the plant manager and also to have enough people in place to monitor that all parts of the production line are functioning normally. It is worth spending a few moments to conduct a physical inspection – similar to a pilot’s ‘walkaround’ of the operations to check that everything is in order before the decision to re-start is made.
Once the plant is up and running, pro-active risk management will include a check that all machines are calibrated correctly and that all output is to the required specification, before shipping products to customers. A little time invested beforehand may help to prevent a potential liability scenario later.
Some of the potential risks from a business re-start include:
- Premises Damage: Fire or explosion of machinery causing own property damage and business interruption
- Injury to employees
- Injury or damage to others, including environmental damage from a plant explosion
- A defective product being sold causing injury or damage
- Arrest or investigation of management for any breaches of Health and Safety regulations
- Supply chain risk from failing to fulfill orders to customers
- Adverse media publicity following an event.
Whether or not these are covered by insurance will depend on many factors, but at a time when businesses are starting to open again, an unexpected incident could have a significant impact on its recovery prospects and may prove fatal for the business, creating additional financial risk for the owners.
So in the rush to say “We are open for business” a moment to check before turning the key may prove to be time wisely spent.
Stay Safe and Profitable.
