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Reducing MPE incidents - a critical business strategy.
Incidents involving mobile plant and equipment (MPE) can be expensive. In the 2021 – 2022 financial year, for example, NTI recorded 165 significant MPE incidents costing more than $50,000.
Beyond the financial cost of an insurance claim, there’s also business disruption and job delays. With COVID-19, the war in Ukraine, extreme weather events and emerging economic pressures, replacement parts and plant can be hard to find and slow to replace.
That’s why, now more than ever, preventing incidents – and reducing their severity and impact should they occur – is a critical business strategy.
Some incidents, such as car crashes or extreme weather events, can’t be prevented. But some incidents can, and they typically fall into one of two categories: human error and maintenance related. Together these two causes account for nearly three-quarters (70%) of incidents.
Based on NTI’s 2021–2022 data, human error accounts for around half of these significant MPE incidents. The three leading causes were ‘hit visible machinery/object,’ ‘inappropriate position’ (around 20% each) and ‘loss of traction’ (around 15%).
“Some of these are just momentary lapses of concentration,” says NTI’s Hayden Reed. “Some are a lack of training or a lack of communication between people working together on a job site.
“But more often than not, they come from working in and around or using the same equipment day in, day out. You don’t become blind to the risks, but you do become used to them.”
The most common outcomes of a human error incident were structural damage (around 36%), rollover (around 25%), significant non-structural damage (around 16%) and bogged (around 12%).
Using the same NTI data set, we see that in 2021–2022 insufficient maintenance accounted for around 20% of incidents. The leading causes were accumulation of debris, electrical faults (around 36% each) and hydraulic faults (around 18%).
“These are basically claims where we’ll get an engineer to look at what’s happened to cause an incident – usually a fire,” Hayden says.
Hayden notes that often, when maintenance-related incidents occur, and there’s no fire, they’re repaired in-house, and no claim is made.
The most common outcomes of maintenance-related incidents were fire (around 98%) and significant non-structural damage (around 2%).
How can businesses reduce the number of preventable incidents? We suggest five steps: training, safety and operations protocols, maintenance, regular cleaning and investing in new technology.
“Most businesses are pretty good at assessing their operators’ competency,” Hayden says, “but that doesn’t mean they shouldn’t be providing training where it’s needed, or looking at certificates of competency.”
It comes down to risk management. Training provided by a legitimate third party gives a fresh look at risks and operational procedures, and that’s sometimes all that’s needed to avoid a problem.
It can also assist when making a claim. Suppose you can’t demonstrate that your operators were competent to operate the equipment in question. In that case, you might experience delays or complications in settlement.
Good businesses will establish, communicate and enforce safe work and operational practices. Every site should have protocols to log attendance, equipment use, safety and operational procedures, and more. For long-term projects, regularly review protocols and communicate them to keep team members focused and avoid complacency.
“It’s up to businesses to decide how frequently to do it,” Hayden says. “You might have a static site with a lot of workers. You could opt to say, ‘we’ll do it six-monthly or yearly.’
“That’s up to the business, but it’s always good to keep messages fresh and to let the team know you’ve got their safety in mind.”
The key with maintenance, Hayden says, “is to go beyond ‘it’s due for service, change the oil and filters.’ Too often, that’s all that gets done, and nobody asks, ‘are you checking this, are you doing this?’ to prevent problems.”
Routine maintenance and servicing are a given for most businesses. The point is to go beyond the minimum and establish a preventive maintenance routine based on your operations and equipment.
This routine should involve extra checks and replacing items before they fail. Like every aspect of your business, it’s about understanding and managing the risks.
“People might say, ‘oh, it’s just a burst hose,’ and replace it,” Hayden says. “Or if electrical cables are rubbing and causing shorts, they might get an electrician in.
“But when it’s a battery cable that’s unfused it won’t trip fuses or breakers. It’ll just spark till it causes a fire.” Similarly, hydraulic hoses near a heat source (such as a turbo or exhaust) present a significant fire risk. So having checks in place for these components and communicating their importance is critical.
After all, replacing a cable (or a hose or other consumable) is a lot less expensive and a lot less hassle than dealing with an incident.
Keeping your MPE clean doesn’t just make you look more professional and give your team members more pride in their jobs. It also makes it easier to identify faults and avoid incidents – especially fires.
This is especially the case for equipment directly exposed to organic materials, such as forestry and agricultural machines but also soil turners and pumps, mulchers and the like. Another risk factor is waste handling equipment, for example landfill or timber byproducts. But even for relatively ‘clean’ plant such as cherry pickers and forklifts, cleanliness is a must.
“You should definitely have a cleaning regime in place that reflects the nature of the work and the risk,” says Hayden, “consideration should be given towards weather patterns and the machine’s duty cycle.”
“You don’t want any build-up of debris or substances that could hide or cause a problem.”
Supply chains notwithstanding, investing in new technology can pay dividends beyond operational improvements and various financial benefits. Most (but not all) new plant is safer and easier to operate than older versions, which can immediately impact your business’s risk profile and the likelihood of incidents.
“A lot of newer equipment comes with safety and efficiency improvements,” Hayden says. “You can often geo-fence or input parameters to avoid problems.
“So, if you’ve got an excavator and you know you’ll be working near a pole, you can program it so it won’t let the bucket hit the pole.
“Or you can set digging depths to avoid hitting pipes. All this automation can pay huge dividends.”
One area we often see overlooked is businesses investing in technology solutions but not training their personnel on their use. This is a critical step to ensure you’re maximising your return on investment.
Keeping your equipment clean, well-maintained, and operated by skilled users with clear protocols can help minimise your claims.
If you’d like to learn more about risk management and how to protect your business, contact your insurance broker, or NTI, today.