February 2025 Volume 7

OPERATIONS & MANAGEMENT

Conclusion The forging industry faces unique risk management challenges that require specialized insurance and risk engineering strate gies with a broker/partner who specializes in forging. By under standing the market dynamics and adopting proactive risk management practices and working with your broker, forgers can improve their insurability, change the industries’ loss history narrative and secure more favorable insurance terms. Collabora tion among brokers, underwriters, loss control specialists, and third-party risk engineers is essential to navigate the complex land scape of property risk management effectively. Katie Hensley, AIC Risk Management Consultant

4. Hot Works: Formal Hot Works programs are becoming a requirement by underwriters. Hot work incidents are a leading cause of property losses. 5. Interlocks and Hoses: Carriers are familiar with hoses coming loose and causing ‘fire throwing’ losses. Hence, they scrutinize interlocks and hose material. They want to see your PM schedules and testing of equipment. 6. FM Approved Hydraulic Fluid: It is recommended to utilize approved hydraulic fluids to reduce fire risks. 7. Business Continuity Planning: Developing and main taining robust business continuity plans is required these days. These plans require detail to show the underwriter exactly the plans in place in event of a loss. There is typically a dollar amount associated, and they want to know exactly how that was computed. If it is too low (in their opinion) expect push back based on their own calculation models. 8. Emergency Response Planning: Preparing comprehensive emergency response plans and practicing drills. How are you going to keep your employees safe and mitigate the cost of a claim? 9. Maintenance Plans: Establishing and tracking regular preventative maintenance schedules is critical. 10.Valuation Adequacy: Ensuring accurate property valuations on statement of values which includes the replacement cost of your buildings and the replacement cost of your equipment. Using a third-party assessment company to provide these figures is worth considering. 11. Sprinkler Systems: Installing and maintaining effective sprinkler systems in appropriate areas is a recommendation often. 12.Fire Department Coordination: Familiarizing local fire departments with the facility layout and hazards. 13.Near Miss Program: Creating an internal near miss program can help prevent larger events. This is done a lot on workers’ injuries but can be expanded to property and other lines as well. 14.Managing Independent Contractors on Premises: Imple menting proper risk transfer agreements, requiring certificates of insurance, and training are all highly recommended. Importance Of Third-Party Risk Engineering Utilizing third-party risk engineering firms is a strategic tool for forgers to assist with insurability and provide a fresh set of eyes to your operations. These firms provide detailed property and safety engineering reports that include recommended improvements, and estimated loss scenarios. Such reports are essential for underwriters to calculate Probable Maximum Loss (PML) estimates and make informed underwriting decisions. Without these reports, under writers are unable to truly assess and may lean towards worst in class resulting in declining to quote or higher premiums.

Cottingham & Butler Phone: 563-581-2244 Email: kahensley@cottinghambutler.com

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