by J. Michael Hunter
Published in AYBC’s The Reference Point – Spring 2009
Occasionally, the damage surveyor is presented with a situation and scenario where, aside from the required damage analysis, they observe safety related details outside of their scope of investigation. These concerns could be related to an underlying issue, area hazard, lack of vessel fitness or the method of repairs, to name a few. Typically, we express our concerns in a written or verbal report and move on to the next file, leaving the details for our client to resolve. Those problems may be minor or sometimes, those concerns are so egregious we have to pursue the issue a bit more vigorously. Have you ever found yourself in a situation where the assured’s vessel was being repaired in an unsafe manner not consistent with standard boatyard practice? My best guess response is a resounding YES! Based upon my conversations with other damage specialists, the response from assureds or the shop is typically controversy and inaction as opposed to appreciation. The application of “standards is equally important for both the damage surveyor and for the condition and value surveyor. The term “standard boatyard practice” has been utilized in our industry, either among the surveyor’s in general discussion or embodied by definition inside the policy contract we are often investigating under. What is standard boatyard practice? Does “standard” in this term define the protocol with which we should be performing our duties?
Ask yourself how you would handle the following scenario:
The loss assignment is received with a cause of loss citing engine room fire on a late model Express Cruiser. Your responsibility involves the development of an itemized estimate of damages and to ascertain the proximate cause of the fire. During your initial inspection, the origin is easily identified and related to the battery charger. The charger is removed by the repairer in your presence and transferred under an Evidence Transmittal Form and Chain of Custody. In accordance with company directives, the charger is forwarded to an electrical engineer for a detailed analysis. The scope of the damages is then discussed with the repairer, and a cursory estimate of repairs is developed. The vessel is determined to NOT be a Constructive Total Loss and repairable well within the policy limits.
During the second inspection of the vessel, you begin to observe certain questionable repair processes by the repairer. The extent of damage will require the replacement of electrical conductors, fuel lines, switches and relays and numerous other similar components, along with all of the sound dampening foam. At the time, the repairer has removed the engines, but you notice the stern drives are still attached to the Gimbal Housings, and the engines bell housing, motor mounts and harness are removed from the engines when not necessary. Some boats may require this type of tear down due to space constraints, but not this one. The engine room is stripped of components for the onset of repairs and a sublet repairer is preparing to affect cosmetic repairs to the engine room. Electrical conductors were cut without regard for their source, and when you inquire as to what conductors would be used to affect the repairs, the technician points to a wire rack in the shop containing multiple sizes of trailer grade wiring and torpedo or butt lock connector terminal ends. This is the assured’s choice in repairer.
A discussion takes place between you and the repairer’s representatives, including the general manager, over the repairs yet to be done, and you mention ABYC Electrical Standards E-ll, NFPA 302, Code of Federal Regulation and others during the discussion. They respond with, “What are those?”
What do you do now???
Although I have been presented with this scenario on many occasions, I pose the question for discussion purposes. How would you handle this? If you are a repairer, could you or your technician respond intelligibly to questions regarding required standards? If asked about ABYC E-ll, NFPA 302, CFR 33 and 46, could you answer correctly? Or better/worse yet, if you have just raised your right hand and sworn to tell the truth about your knowledge of these “minimum safety standards” after the death of a family on their boat you just worked on, could you answer the question? How would you reply?
After 25 years in the marine industry either as a dealer, technician or marine investigator/surveyor, I have seen all of these from one side or the other. This above scenario was quite recently presented to me and I offer my perspective on its handling and the part each person has in its resolution.
Now, the rest of the story. When inquired with the repairer, they became incredibly resistant to someone” imposing” upon them standards with which they should be conducting their work. They informed the assured (their customer) the surveyor was mandating repair methods too extraordinary, and continuation in this manner would dramatically increase the billing from the already agreed upon scope. As the repairer had indicated, he did not own an ABYC Standards manual, and demanded I give him mine. I suggested the repairer obtain a copy of ABYC Standards for their own reference and possibly consider an educational training course in standards and codes. They told the assured they were already members of ABYC and that I had no idea what I was doing. Then, they advised the assured they would be adding to their bill the cost of the recommended training and manuals which they had just ordered to complete the repairs to standards being “imposed.”
Over the next few weeks, a debate ensued between the assured, their insurance agent, the adjuster and his manager, the repairer and myself while the fiberglass shop was affecting the cosmetic repairs to the engine room interior. The assured and I discussed a simple point – the standards being recommended are “minimum safety standards” OR are required by law and therefore, not open to negotiation for any repairer. “Are your family’s lives worth taking the short cuts?” I then asked the assured and shop why the insurance company and damage surveyor would supply the repairer with the wrenches and sockets to do a job, which they should already have? The assured contacted ABYC directly inquiring as to the nature of ABYC, if this surveyor’s expectations are extreme or typical, and details regarding the repairer’s membership in ABYC. ABYC assisted the assureds in their questions, advising of the repairer’s only recent request for membership (the application was received that same day) and ordering of the ABYC Standards. Based upon ABYC’s information to the assured, the entire course of the claim changed. Standards and expectations were confirmed.
Based upon this new information and defining standard based boatyard practices, the assured froze repairs of their vessel. The assured was eased, at least regarding that crazy surveyor’s comments, but now had a boat in the middle of repairs with a shop unable to complete them in accordance with minimum safety standards. Now what? The insurance carrier in this matter, State Farm Insurance and their claim’s manager, Kent Peterson, and his adjusters on the file stepped up to the plate, acknowledged the need to relocate the vessel and fully supported this writer’s points of concern.
The relocation of the vessel would require additional charges for transport, but I believed the repairs could still be accomplished close to the original estimate. At my advice, the vessel was delivered to one of three facilities trained and familiar with ABYC Standards in our area. The assured chose the local Marine Max dealer, with whom I admittedly had faith in their ability to complete the repairs. I met with the service manager, Robert Sissel, who was already citing the necessity of standards adherence and their own expectations to follow these “rules” during our first conversation. Needless to say, the assured became much more comfortable with the repairs provided, the adherence to safety concerns for their vessel and the proper indemnification of their loss.
For years, State Farm has recognized that the marine aspect of their business is different than that of land-based roof adjusters or auto physical damage experts, and requires different expertise. They make every attempt to retain only experts in the field with proven track records capable of even going to court if necessary. Their point is to provide the best services possible to not just the particular insured / client involved, but all the assureds who have policies. With this policy in mind, State Farm authorized me to complete subsequent inspection~ of the vessel at this new location to ensure the vessel received the quality of care outlined in the minimum’ safety standards and legal requirements of ABYC, NFPA and CFR 33 and 46.
Additional items were discovered, discussed and agreed upon during the repairs. At last inspection, the 80 hours r originally estimated by repairer #1 to complete the job was completely obtainable while adhering to the standards, not more time as subsequently indicated by repairer #1.
Is training and certification an expense or an investment? It is clear to say for the first repairer, a lack of training can be considered an expense as it lost them $30,000 in potential income. For the second repairer, investment in training and certifications in the ABYC Standards provided them $30,000 in income they would not have had. Were it not for my training as a marine technician, accident investigator and an as ABYC certified technician, the repairs to the vessel would have been completed, the vessel returned to service possibly resulting in injury or worse to the assured or significant loss of value to the vessel. Imagine an insurance carrier’s liability exposure in a wrongful death case in which a small child dies from electrocution or carbon monoxide exposure due to these improper repairs. What is the insurance company’s investment in hiring trained individuals? Is it an expense or an investment to hire skill and experience?
I feel we, as professionals, sometimes lose focus of our duty to protect others, sometimes from themselves. We are sometimes so focused on “getting the file off our desk”, we forget to provide the best service we can to our clients and their diems, the assureds. We cannot be satisfied with simply moving through the file. We, especially in this declining marine market, must provide our clients and assureds with the most knowledgeable and expert evaluations possible. I have had discussions with many surveyors over the years about the topic of ABYC Certifications. The debate: Do the certifications cause for an increase in your liability by having them or not having them? Many years ago, I was introduced to an acronym- WW.J.T. or What Would the Jury Think. I ask you, would you rather try to defend yourself to the jury for not getting the training in minimum safety standards OR for having the training and explaining your scope of inspection? Remember, court is not necessarily about the truth, but what spin the attorney can put on it.
Training is an investment in your business and your credibility. It requires more training, not less. More certifications. More class time. More travel. What kind of return on investment are you getting on you? If an insurance company wants to hire the cheap guy, you probably don’t want to work for them anyway and stand to get the case on the back side by their likely shortcomings. What kind of a repairer are you? What kind of a damage surveyor are you? If you are a company adjuster, what is your return on investment in whom you hire? The small shop cannot be excluded from these “standards” just because they are small and nor members of ABYC. More marketing energy should be spent on encouraging ABYC training for the small marine dealers. Ignorance is not an excuse!
I believe Brian Tracy, a business and motivational speaker, says it very well: “Success comes when you do what you love to do and commit to being the best at it.” Are you?