The Hidden Risks of Bringing a Crane onto Your Job Site

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Logo, Travelers. Text, No Such Thing As a Minor Crane Accident.

Hank Dutton speaking over slide. Image of various cranes shown. Statistic about crane related deaths. Text, No Such Thing As a Minor Crane Accident.

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HANK DUTTON: Cranes can be one of the most expensive pieces of equipment on site and when things go wrong, there are no such thing as a minor crane accident. You know, when I think about the question of some of the risks that contractors should be aware of, I’d first encourage those parties that are involved, be it the general contractor to the subcontractor, you know, those that are involved with contracting with a crane company to provide the crane and the operator to read and understand that rental agreement that's being used.

Because based on that rental agreement, contractors should be aware of who is responsible for what with those crane operations. And how addressing inherent risk, how they can actually be transferred amongst the parties that are involved.

Because unfortunately, many times what we see is that contractors and subcontractors mistakenly believe that all of the risk and responsibility for crane and crane operations belong with the crane company. However, that's really not the case.

Within the crane industry, contracts tend to use similar verbiage and they pass much of that responsibility for the crane operations to the lessee. Generally speaking, there's not a lot of room for a contractor to transfer that risk back to that crane company. Therefore, what that does is it puts a burden on that contractor who's renting the crane to really understand what they're responsible for. Which those items can actually range from things like ground conditions to overall safety for the crane and the crane operation itself.

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Logo, Travelers. Text, Crane Accidents from a Claim Perspective

Thad Doyle speaking over slide. Image of various cranes shown. Statistic about crane related deaths. Text, No Such Thing As a Minor Crane Accident.

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THAD DOYLE: When we first get news of a crane accident, especially if it's coming from a general contractor or say a prime subcontractor. We’ll often hear it wasn't my crane or I didn't hire them directly and we understand that from how the flow of responsibility typically takes place in a construction project, you know. But however, people often think that they're insulated from that crane accident.

And what we'll talk about today is seldom, does it actually work out that way every time? In my years of looking at those contracts that Hank just mentioned, the vast majority always favor the crane owner and operator. And in fact, we see crane incidents where the crane is defective; there's clear operator error.

I think we'll talk about one of those scenarios later on. The majority of those cases that contract does indeed favor the crane company and we end up paying a share of that claim. So I think this audience knows that cranes are a rare and precious need for the industry so those crane companies hold all the bargaining power for us.

My advice to this audience is to start with the assumption that risk transfer ends with the party that hires the crane and the operator. I think if you start with just general premise it will help create the mindset of your company on how to best manage your crane related operations going forward.

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Logo, Travelers. Text, Accidents Involving Rented Cranes.

Hank Dutton speaking over slide. Image of two buildings shown and emoji stickers to represent text. Text, 3 Areas Contractors Need to Focus On.

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HANK DUTTON: I have been involved in numerous crane accident investigations. And one theme that definitely holds true above everything is that there’s generally no winners when crane accidents occur. Crane accidents can involve property damage, worker injury, death, in addition to the damage caused to the equipment, which could even total out the crane resulting in millions of dollars going out the door.

But as for the question asked, for an accident involving a rented crane, there’s one that comes to mind, and it really illustrates some good points for contractors to consider. So, in this example, the crane was rented, actually a sub of a sub now that I think about it. So, we had a situation where we had general contractor, subbed it out. A sub of a sub actually brings the crane onto the site. And this job was in a major city, it was in a really congested area.

And unfortunately, the collapse occurred while a crane was being operated, and as a result, there was one person killed. And there was actually extensive property damage throughout the area. And what this accident really speaks to is three areas where contractor should focus: around contracts, planning, and education. So, I’m gonna add a little bit of detail around each of those elements for a minute.

So, for the contracts: contractors really should read and understand the terms and conditions of that rental agreement. Many times, they may want to consult with your legal counsel to ensure that they understand what’s being said within those contracts.

And for the planning, this should include safety planning for lifting operations and how to mitigate the inherent exposures for the workers, as well as for the general public that may be in the area.

And for the education, I'm sure everyone knows what education is. But what I'm specifically referring to is to include crane safety training, for those workers as well as a supervisor safety staff; they’re being charged with overseeing that work.

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Logo, Travelers. Text, Far Reaching Liability

Hank Dutton speaking over slide. Image of a building shown with a crane with corresponding text. Text, Far Reaching Liability.

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HANK DUTTON: One interesting thing about the example that I mentioned was that the general contractor themselves, they were brought into the claim even though they didn't directly contract with a crane company. The general contractor was not a party to the rental agreement in the scenario. And what this illustrates is what can be a common misconception about crane operations involving cranes that are actually rented with an operator, in that the general contractor they didn’t think they'd have any liability because remember their subcontractor had actually rented this crane.

So when I mentioned the importance of reviewing the rental agreement earlier and I also mentioned that a contractor may have some obligations regardless of that rental agreement. For example, those that come with state or federal laws. So it is worth noting that there have been other cases where general contractors were brought into a claim due to inadequate ground conditions for the crane. And in these cases, the general contract was brought in due to their failure to fulfill a safety obligation. And that safety obligation was actually something that was born out of an OSHA regulation because according to the OSHA Construction Crane and Derrick standards, their general contractors, prom contractors, and construction managers, they’re referred to as controlling entities. And the same standard states that the controlling entity is responsible for ensuring the ground conditions. Keywords, “responsible for ensuring the ground conditions are adequate for crane operations.”

Therefore, you know, it's highly recommended that companies involve their legal counsel when it comes to deciding who’s going to contract with a crane company? Who's going to provide that crane operator? Who’s going to be responsible for what with those crane operations as well as the other terms and conditions that will be agreed upon? That way they can help ensure that all parties feel like that they've been protected in a way that's acceptable to them.

You know, one final note I would say that companies should also make sure that they train their field staff about what's contained in those contracts. Because those are going to bathe people that are probably going to be expected to fulfill it and that way, they can ensure the contract responsibilities are actually fulfilled on site.

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Logo, Travelers. Text, Understanding General Contractor Exposures.

Image of a building shown with a crane with corresponding text. Text, Far Reaching Liability.

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LOUISA DESSON: Thad, in this case, can you tell us a little bit more about why the general contractor faced exposure?

THAD DOYLE: Absolutely. Happy to talk about that. So as Hank pointed out, this was a scenario where we have an owner, who has a general contractor. General contractor hired a sub, that sub had a subcontractor. That subcontractor hired a crane with an operator.

And in this particular scenario, you know, the contract language works exactly as we would expect. The contract between the owner, the GC's, down to the subs, was good language and appropriate language. The GC in this circumstance faced exposure for a few reasons beyond those contracts. One was risk transfer did actually stop at the crane. So, as we mentioned before, typically favors the crane company and in this circumstance, it certainly did. And the entity that actually hired them had minimal limits and you know, I don't remember off hand exactly what they were but their limits barely paid for the damage to the crane themselves. So right there that first up subcontractor didn't have adequate limits.

On the next layer of subcontracting that entity also didn't have limits. So now you see where this is heading with who has money available to pay for the crane. The third issue and probably the most important is, in this particular circumstance, the plaintiffs and the claimants, they took the necessary steps to try to place some liability on the general contractor.

So let me just touch upon that last issue quickly. In this particular issue, the contract documents and even the health and safety plan that general contractor stated affirmatively that they would be involved in crane operations, including weather related risks, which is what led to this incident. And on that particular day, the general contractor was not even on site and that contradicted exactly with what their own documents said they would do.

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Logo, Travelers. Text, How to Mitigate Crane Risks.

Hank Dutton speaking over slide. Image of a man teaching a group of people with corresponding text bubble. Text, Crane Safety Training.

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HANK DUTTON: When I think of the many elements that can impact a lifting operation, there’s a bunch of them. But there are some key ones that really sort of come to mind that people should be considering. A successful lift begins with good planning, right. It's like the old adage, you how it know goes, fail to plan, plan to fail and so this plan is very important. And the plan needs to be developed by qualified personnel who understands the hazards that are involved in lifting operations and these may be a little bit more than what maybe a contractor normally does; maybe it's a subcontracted operation.

So, in those situations, you know, I would encourage those contractors that are having subs to do it, to review the lift plan with their sub to help ensure that the plan is complete. You know, things that maybe that general contractor knows that maybe the sub didn’t know. That way these hazards can actually be addressed. You know, we can ensure that the plan is complete in that situation.

You know, the next thing I guess that comes to mind is I would encourage contractors to provide their management personnel, which includes the supervisory staff as well as safety staff, some training on crane operations. And sort of mentioned that earlier, you know Thad brought up a good point. After an accident, you don't want a jury looking back and going, “wow that contractor lacked expertise, wow they attempted to do something that maybe they hadn't actually trained their staff for.”

And then there's also that execution piece. And the lift plan needs to be executed by a team that understands those risks and not only understands the risk, but how best to mitigate those risks. Realizing that things can actually change out in the field. And so, having a process they had talked about how you're going to deal with those changes. You know, that's also important. But back to that team, think of teams as having a team of individuals, many roles involved. Roles from a site supervisor to a lift director to you know of course the obvious ones, you know, the operator, the signal person, the rigor. You know those are the ones that people focus on but maybe we miss some of the other. So, you know, contractors should verify that their crews have received the appropriate training before allowing those lifting operations to begin.

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Logo, Travelers. Text, P.R.E.P. (Prepare, Reap, Educate, Process)

Hank Dutton speaking over slide. Image of a crane shown. Text on P.R.E.P. meaning. Text, P.R.E.P. (Prepare, Reap, Educate, Process).

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HANK DUTTON: You know, when I think about things that I’d like for people in the days call to sort of takeaway from here, you know, us in insurance, we really like acronyms and so there is one acronym that comes to mind. And it's PREP. You know, preventing crane accidents is better than relying on contracts for protection. And I go back to that comment Thad made, you know, sometimes who decides that contract is your local friends, right. They call him a jury and a judge. So definitely, if we can work more as an industry to prevent crane accidents, we don’t have to rely on the rest of the world to decide it for us.

The “R” in that: reap the benefits of having a solid process. We talked about process many times in our conversation today, but have a solid process around managing crane. Managing cranes on your site which can include, reviewing of lift plans, which is a topic you know that definitely is very near and dear to me. Ensuring adequate ground conditions are provided for those of you that are attending today that work for general contractors. It's one of the things that's actually written in a federal law for you.

You know, the “E.” Educate. Educate your supervisor and safety personnel on crane safety and risk management principles. Because what we see is that a lot of people are like well you know, hey I got qualified crane operators, qualified riggers signal persons; that's all great but what about the rest of the team, right? So think about how you‘re taking care of your risk management principles being trained to your supervisory staff and those people that have to execute it.

And the last one is the “P.” Have a process. And that process that I’m referring to is a process for checking contracts. Verifying insurance covers that Thad had mentioned earlier, to try to help make sure that you have enough limits in place. And we're talking about how you look at that around crane operations, specifically just because I am a little bit biased, I guess. I mean everything is really around the crane in my world.

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