LEGAL & LITIGATION
of coverage is required, for example. Bigger play- ers can afford bigger policy limits, smaller entities should feel confi dent saying “I have £1m – it’s ex- pensive – that is enough.”
The head contractor’s insurance should pay the loss fi rst in any case. They will simply make a smaller recovery from smaller subcontractors. Do not allow the “insurance to take the profi t out of the project”. Discuss solutions.
IT CAN HAPPEN
Some ITIC claims scenarios demonstrating the potential li- abilities of rail professionals:
1) Switch lever design fault
A railway design engineer de- signed a new form of switch lever for a major manufacturer of rail components. The design was tested and certifi ed. The new switch entered produc- tion and was installed in a new rail system. Subsequent op- erational failures were encoun- tered when used in extreme temperatures. The contrac- tor who had installed the new switch system appointed so- licitors to seek compensation from the design engineer, al- leging negligent design. Legal proceedings commenced.
Together with ITIC, the design engineer located an independ- ent party who could analyse the design process, subse- quent manufacture and instal- lation. This expert testimony was critical in establishing that the operational failures were caused by improper installa- tion, not negligent design. The
cost of the investigation and defence were covered in full by ITIC.
2) Mapping survey data
A fi rm of surveyors who spe- cialised in mapping and survey- ing railway infrastructure had a sustained period of staff illness during a popular holiday period. This left them short of survey- ors experienced in the use of specialist survey equipment.
An important contract was close to completion and a team of less experienced sur- veyors were given the task of completing the survey. Sub- sequently the contractor re- viewed the data they received and alleged that it was inac- curate and unusable. They threatened to instruct solicitors to pursue a damages claim.
Together with ITIC, the fi rm of surveyors agreed to appoint an independent consultant to analyse the data and report on its value. They did so and were able to show that the sur- vey data was accurate. This
A health and safety consult- ant delivered a training pro- gramme for staff working in the rail industry. He received a letter from lawyers claiming to act for the family of a railway engineer who had been killed in an accident at work.
The lawyers alleged that the engineer’s life would not have been lost had the team of work- ers correctly implemented ap- propriate health and safety pro- cedures they had received from the consultant. A signifi cant sum in damages was sought.
ITIC helped the consultant pre- pare a response. This involved a review of the training that took place and the emphasis placed on the actions of team mem- bers. Analysis was also made of the events leading to the ac- cident. ITIC drafted a detailed reply. No response was re- ceived and the claim and threat of litigation was eliminated.
encouraged the contractor to drop the claim.
3) Health & safety consultant
Second, engage your broker and insurer about where you work in the rail environ- ment (red zone/green zone).
Third, if you get “silence back” from your in- surers (or they appear not interested) keep looking. Any broker or insurer who will not engage with you at the buying stage, is unlikely to want to do so when you need them to rescue your business, in the event of a loss or claim.
ITIC is one insurer who is keen to engage with your industry. There are also a small number of specialist insurance brokers with a focus on the rail sector. Try to fi nd them.
Roger Lewis is Underwriting Director at ITIC, the specialist transport industry pro- fessional indemnity insurance company, with a focus on the marine, aviation and rail sectors. ITIC is managed by Thomas Miller, a 300 employee owned insurance managing agency with headquarters in the insurance heartland of the City of Lon- don and offi ces also in New York, Sydney, Hong Kong & Shang- hai.
This article is
based on a speech giv- en at the Rail Safety Summit at the ICC in Birmingham in 2010.
Roger Lewis
FOR MORE INFORMATION Visit
www.itic-insure.com
rail technology magazine Aug/Sep 11 | 57
Risk and reward Risk and reward
Finally, a few secrets from the insurance world. The average business professional – engineer, de- signer or consultant – spends less than 1% of their time thinking about insurance.
Reasonable? Certainly. Without the job being done (the 99%), protecting the business from risk is irrel- evant. But professional insurance still comes in as
a top three expense to many such businesses. So doing that 1% effi ciently is important.
Here are three quick tips on how rail profes- sionals might better use that 1% of time and might better engage with insurers.
First, present yourself as a true professional. Avoid sloppy proposal or application forms and avoid insurance intermediaries/brokers who cannot help you sell your professionalism.
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