MANAGING A DISASTER
Prior to fire: Under or Over Insured: “On a scale of 1-10 with 10 being
Quick Look at Cunningham Brothers
reopen in just three months. Snyder credits his rural location in a state and county where they do not have overbearing regulatory requirements for that. “We are fortunate to be in the country where it doesn’t take long to rebuild and you don’t have so much red tape to go through, and waiting time for permits and inspectors, etc.,” said Snyder. “The biggest issue for us was that we didn’t have insurance so we had to spend our own money to rebuild.”
Corrective Measures
All of the auto recyclers say the fire has changed the way they do things.
“The first thing we changed is that we no longer use cutting torches in any of the buildings,” said Snyder. “We replaced them with reciprocating sawzalls which are safer because there are no flames or sparks like you see with cutting torches.
“The second thing we changed is that when we built our new dismantling building we made sure that the fluid recovery storage was not connected to the dis- mantling building but instead located in a separate building. In the previous set-up there was only a wall separating the two. Fuel tanks are now set on a cart and the cart is rolled to one of the two pumps at either end of the eight-bay facility. The pump syphons the gas out and moves it to a separate tank away from the dismantling building. “We also beefed up our safety and fire training and
now, of course, we have ARA University which we take full advantage of the safety and fire courses,” notes Snyder. “Now we have fire extinguisher training for employees and have more fire extinguishers in the building. The extinguishers are inspected internally on a monthly basis as well as every year by an outside inspector.”
For Wilbert’s Inc. the most crucial thing that they learned and have since changed is to have a business continuity plan in place.
“Having a business continuity plan in place in the event of a fire or other disruption to your operations is crucial,” said Bob Wilbert. “If we had not had any other locations to place the employees and continue payroll and other functions, we would have gone out of business. The fact that we had multiple locations helped us to weather it.”
Prevention is Critical
Unpreventable accidents happen, but from Snyder’s perspective, auto recyclers should take the necessary precautions to avoid a fire.
“The most important thing in my opinion is for recyclers to realize that torches have come and gone
52 Automotive Recycling | July-August 2015
the best I would say we were in reality a 4.5 but I thought we were great because I didn’t understand the policy.” Building Insurance: Yes – adequate coverage Tools Insurance: Yes – adequate coverage Loss of Business Insurance: “Yes, I had 1.2 million dollars
coverage which I thought was more than enough but after the fire I have learned that you really need to find out how it’s structured because on my policy they only pay if they think you have had a loss of business. For us it’s still not yet determined because we are in the process of rebuilding and I will be submitting more claims.” After the fire: “We retained an expert to maintain our policies and to make sure we are up-to-date and understand the structure of the insurance policies. We changed policies and changed the way they were structured, such as time of payments, length of business interruption etc.”
in our industry,” said Snyder. “I understand that if you operate in the rust belt you may need a torch, but I would advise you to really look at your business and other businesses around you to see how you can run your dismantling business without using torches. I would also advise that you put in place all safety pro- tocols in order to prevent not only a fire but other possible hazards that could affect the safety of your employees or your business.”
Nordstrom is in agreement. He says he learned two important things from the fire – the first and what he considers the most important is that they should only use hand tools in the dismantling area anytime you are working with the fuel system. This is a policy that was put in effect immediately after the fire. The second was understanding his insurance policy.
Ensure Your Insurance is Correct Rick Wilbert says that making sure you insure your
building for fair value is extremely important. Carrying the correct amount of insurance, even if it costs more in premiums, is important if the desired end is to rebuild effectively without high out of pocket costs. “It’s very critical that you have your building fairly insured, within a 20% margin,” said Wilbert. We now have two insurance companies; one to insure the building and one to insure the equipment and tools. We estimated our loss at $1.6 million dollars and the actual loss was $1.4 million. He also suggests having a visual record of your facility is a valuable and time-saving tool in the claims process. “I would suggest that auto recyclers have both video and photo record of your building. We learned this the hard way. You’d be surprised, but it’s very difficult to remember all the tools, details, and such that is con- tained in each room. Yet, that is necessary in submitting the correct claims and rebuilding your facility.” For Cunningham, he now has an expert handle his insurance policies in order to make sure he really is adequately insured for business interruption.
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