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March 1, 2006 By    

Companies and employees too often fall victim to unfortunate events that are of their own creation. A long-standing accident theory (Heinrich’s Domino Theory) states that accidents and injuries are a result of unsafe acts or conditions that are caused in part by personal fault due to a person’s environment or ancestry.

 Tom Mullaney
Tom Mullaney

That may sound like a bunch of philosophical mumbo jumbo, but the simple explanation of this theory is that when people are involved in a process and an unsafe act or condition is present, the likelihood of an accident or injury occurring is substantial.

There are numerous opportunities in the propane industry where Heinrich’s Theory causes catastrophic losses that could have been controlled by specifically addressing the unsafe acts and conditions related to system installation and, more specifically, system service.

Insurance claims, particularly in southern sections of the United States have increased in previous years. These increases are due to distributors not adequately completing their system service during out of gas service calls, installations and routine inspections.

It is important to understand that by not completing your system checks as required you are not only exposing your customers to unnecessary harm, but you are also endangering your company to potentially catastrophic financial duress. Escalating insurance premiums or the loss or unavailability of coverage due to your failure to meet industry guidelines is a significant possibility.

The National Propane Gas Association has instituted its Gas Check Program based on the regulatory requirements adopted in NFPA 54 and NFPA 58.

Gas Check requires that you:

  • Complete the appropriate Gas Check form.
  • Complete a thorough inspection of the heating system, sediment traps, pilot safety system and venting system.
  • Inspect all container placements.
  • Inspect all room heaters, burners and pilots.
  • Test all lines, controls, regulators, valves and fittings.
  • Test flow pressure, regulator lock-up and leak tests.
  • Make the necessary recommendations to the customer concerning repairs, replacement and information which may enhance safety.

I recommend that Gas Checks be completed on a periodic basis, as well as on all new installations, on all customer systems that are taken over from a competitor, and after any system modification that requires additional piping or the addition or subtraction of an appliance is done.

It is especially imperative that rental homes be scrutinized more thoroughly than a regular residence. In rental situations, appliances are frequently added or removed during or after heating seasons without any dealer involvement in the installation or removal. This poses a particularly malicious threat. Renters may be running their own piping and installing their own risers, which may subsequently go uncapped when the renter moves and the appliance has been disconnected.

Dealers should all be fully aware by now that the duty to act is placed squarely upon their shoulders and in any event where liability is perceived the dealer will be held accountable whether justified or not.

During evaluations of risks throughout the country, I speak with many dealers who substitute their own version of Gas Check because they feel complying with the NPGA program will open them up to liability because they are certifying a system as safe.

I will submit to you that in the court of law and in the court of public opinion whether you complete the paperwork and program as presented by NPGA or not, you are still certifying the system as safe by having done the work.

Dealers who think they are protecting themselves and their companies by not completing the paperwork and ensuring that the system is intact are actually putting themselves and their companies at risk.

It is imperative that dealers and the industry as a whole meet and exceed the requirements set forth in pamphlets 54/58. It doesn’t matter whether the customers are commercial or residential, or new or existing. If the system is out of gas, a pressure test MUST be completed and documented. Pressure testing a gas distribution line verifies the system is gas tight and leak free, but if you do not document it, it is assumed the test was never done.

NFPA regulations require a pressure test be performed:

  • Prior to acceptance and initial operation (new installations).
  • If repairs or additions are made (unless minor).
  • When new branches are installed from the point of delivery to the new appliance(s).

Remember that connections between the new piping and the existing piping must be tested with a non-corrosive leak-detecting fluid or other approved leak detecting methods.

All too often, commercial applications are not being tested properly and thus result in catastrophic losses to customers and policy limit claims made against dealers. This is especially true in farming and poultry operations. Dealers are at no competitive disadvantage performing the required tests, but are placing themselves at a huge financial disadvantage in the form of lost insurance coverage or skyrocketing insurance premiums by not doing it.

If you were sitting in my chair and saw the number of propane distributors that are refused insurance coverage or pay unbelievable rates due to their lack of training, documentation and a poor loss history, you would strive every day to ensure that you were never faced with that dilemma.

Whether it’s a system that provides heat for chickens or people or whether it’s service to a factory or a home, ensuring the integrity of the system is the law. Of course, it’s always better to be safe than sorry.

Tom Mullaney is risk management engineer for American Management Corp, an insurance services company based in Conway, Ark. He can be reached at 800-233-2398 or
tommy@amcins.com

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