How Much Will this Cost?
By Bryan R. Durig, Ph.D., P.E.
Summit Engineering
Submitted July, 2002
In November 1996, a food production facility in the northeast experienced a fire that heavily damaged the equipment and building. Figs. 1 and 2 show views of the damaged facility and equipment. Summit Engineering was asked to assist the property insurance carrier to determine: to what extent the equipment was damaged; could it be repaired or did it need to be replaced; and how much was it going to cost to make the necessary repairs to the equipment for the facility to get back in operation.
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Figure 1 |
Summit Engineering visited the site on several occasions to evaluate the condition of the production equipment. The types of equipment used at this food production facility consisted of soaking tanks, mixers, cookers, ovens, fryers, coating tumblers, conveyors, weighers, packaging machines, labelers and other miscellaneous equipment. There were five main rooms that housed the production equipment. Two rooms contained the mixing and cooking equipment, two rooms contained the packaging equipment and the fifth room housed both the cooking and packaging equipment for one line of products. The different rooms had all sustained smoke and heat damage but to varying degrees. There was also extensive process piping and electrical wiring to the equipment that was damaged and in need of repairs.
The production equipment consisted of some old and new equipment, all of which had electronic components controlling their operation. The production equipment was exposed to heat, smoke and water from fire fighting activities. Soon after the equipment was exposed to these elements, corrosion set in on many of the exposed metal parts. A coating was sprayed on all the equipment by the plant’s employees to slow down or stop the corrosion until a complete evaluation of each piece of equipment could be conducted. If appropriate activities are not undertaken to protect the equipment from further corrosion, it is very possible that equipment that would be repairable at minimal cost could be damaged by corrosion to the point where the equipment would need replacing.
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Figure 2 |
Since this was a food production facility, the equipment needed to be ultra clean. The majority of the equipment was damaged by the smoke, heat and water such that repairing was not cost effective. However, there were several large pieces of production equipment that sustained little damage and only needed repairs and cleaning.
One of the major problems on this loss was that the insured decided to upgrade their equipment and modify their facility as part of the plant rebuilding activities. This created a difficult task of separating the upgrades and increased cost associated with the plant improvements. Cost estimates were developed for replacing equipment with like kind and quality. In addition, cost estimates were developed for installing the equipment and process piping/electrical in the original plant configuration. Cost estimates for repairing the original equipment and facility were compared with actual cost from the general contractor to evaluate differences associated with upgrades and improvements.
About the Author: Bryan R. Durig is a consulting engineer with Summit Engineering, an association of consulting engineers providing services in the areas of accident analysis, property loss claims consultation, structural analysis, fire investigations, machine damage assessment, product liability and injury to personnel.
Copyright © 2002 Bryan R. Durig. All rights reserved. No portion of this article may be reproduced without the express written permission of the copyright holder, except as follows: You may link this article to your website, either directly or through an ExpertLaw Library index page, provided your link does not depict this article, its author, or expertlaw.com in a negative manner.