Taking precautions when attending site inspections

Photo: iStock.com/TheDman

For those of you who have provided propane or performed services to an account that sustained a fire or explosion, you might have received a letter advising that you may be a responsible party.

These letters typically advise you to send the letter to your liability insurance carrier or your attorney. They ask you to attend an inspection of the accident site to determine how the incident occurred.

Typically an origin and cause investigator is retained and sent to the scene to determine where and how the fire or explosion started. Often other consultants, such as mechanical engineers and electrical engineers, attend. These days it is likely that an attorney retained by your insurer will also attend the inspection to address legal issues that might arise and to gain a hands-on understanding of the loss. These attorneys also have the opportunity to request actions that they deem necessary for handling the defense of the case.

A new request

We have observed anecdotally a new form of notice to our industry clients – and the reason for this column.

Several of our clients have received letters from attorneys asking them to attend a site inspection to conduct a leak check of the gas system at a property that has sustained a fire or explosion. The letter does not ask them to put their insurance carrier on notice of a potential claim or to notify their attorney. They are not asked to participate in the investigation with an origin and cause investigator. They are asked to bring with them equipment to conduct the leak check. There is no mention of payment for performance of this service, and – from what we have seen – no payment has been made for this service.

We understand the propane company is called out because it supplies gas to the property. It is not notified that it’s considered a potential party because someone has made that determination. The noted concern here is that anything can happen during an investigation. The whole purpose of the investigation is to find out what happened to cause the fire or explosion. By definition, this means that until the investigation is complete, no one is safe from being a target, especially the gas company.

The gas companies that have responded to these requests have not been designated a potentially responsible party. But that could change, as well.

The approach we ask the industry to take when confronted with a seemingly friendly invitation to participate in a scene exam by conducting a leak check is this: Send that letter to your insurer and/or attorney before you attend. It may well be that nothing will come of the invitation, but it is best to take the safe course in these instances.

The insurer or attorney can document that you are not considered a potentially responsible party and can take steps to preserve your right to inspect the site if it is later determined that you could be responsible. One of the risks you face is that the site will often be altered or destroyed during the site inspection. It might also be released for razing after the inspection. Then if you are brought into a lawsuit without reserving your rights to inspect, the evidence will be gone and it will impair your ability to defend. There are rules that allow you access to the factual investigation of others in these situations, but that is not as powerful as having your own team of investigators on site.

So, when you get a letter asking you to provide leak testing to an accident site and it does not put you on notice that you are a potential party, send that letter to the insurer and your attorney. It is the safe course and, in the long run, the best way to protect your business.

John V. McCoy is with McCoy Leavitt Laskey LLC, and his firm represents industry members nationally. He can be reached at jmccoy@MLLlaw.com or 262-522-7007.