Vehicle Backing Incidents: How do Some Utilities Seem to Avoid Them?

By R. Bruce Wright, CPCU

“Sometimes when we review particular utilities’ loss runs there are no backing incidents to be found, not even when we look several years back. What explains this?”

It seems as though many utilities struggle when it come to the prevention of vehicle backing accidents, especially but not exclusively with respect to their larger vehicles, such as service buckets, crew buckets, and digger/derricks. During our claims reviews I all too often see numerous cases (Sometimes even dozens in large utilities!) of backing losses among the paid fleet claims. Year after year, these claims are at or near the top of the list when loss frequencies are calculated, usually vying with yard ruts for the number one spot. There is quite a long and varied list of objects such as mailboxes, bollards, posts, parked cars, and even the corners of buildings, that apparently leap out invisibly behind backing trucks.

While most backing losses are relatively minor in cost, the potential exists for major incidents if circumstances conspire against a driver. I still remember the story one of our clients told me about an event that occurred to one of their lineman who, while driving a digger truck, stopped at an intersection, spotted a semi coming from his right on the cross road, preparing to turn onto the road the digger truck was on. Seeing that the semi’s driver needed some extra room, and being a polite and courteous driver, he reversed to back away from the corner. While doing so, he backed over and crushed the entire front 1/3 of the small Toyota that had pulled up behind him at the stop sign! Oops. The resulting injuries were minor, but when everything was finally wrapped up it still came to quite an expensive total cost.

The really frustrating thing about backing losses, to us, to our carriers, and presumably to you, is that virtually every backing loss can be prevented if drivers follow proper procedures. This brings up an interesting puzzle, namely, that while most utilities seem to have their share of these events, sometimes when we review particular utilities’ loss runs there are no backing incidents to be found, not even when we look several years back. What explains this difference?

This is the part of the article where you are likely to be waiting for me to reveal the “magic bullet,” to explain the simple, cheap, and easy procedure/device that those accident-free companies use that stops all backing accidents. Spoiler alert – you may be disappointed. It’s simple, it’s cheap, but it will require hard work!

Of course, there are a few widely touted ideas that you have undoubtedly heard about. The “Plan & Park Defensively” rule, which suggests a driver park so that he needn’t back up to leave. The “Walk Around” rule, which requires a driver to circle his perked vehicle before getting in. The “Set-out Cone” variation, which requires a driver to place a traffic cone behind (or in front and behind) the vehicle, and retrieve it (them) before driving off. The “Spotter” rule, which, as the name implies, requires any vehicle with a passenger to have that person get out and act as a guide whenever a vehicle is in reverse. The “Beeper Reverse Light” that sounds a warning when backing, though few mailboxes seem to get the message and move out of the way.  Many of our clients use or have used one, two, even all of these approaches. Some have had success; many have purchased lots of replacement cones and/or disciplined lots of drivers. The latest idea is backup cameras, which in fact may offer some actual benefits, for a cost.

After having many, many conversations about backing incidents and prevention programs with utility safety officers across the country I have come to the conclusion that the secret to preventing them is not found in any of these techniques. I certainly would not tell anyone to stop using them, especially if they believe that they are helpful. But, I think the real explanation for why some of our clients don’t have these incidents while many others do, lies in the differences in company cultures. While nearly everyone says that they recognize the importance of “culture” in reinforcing the safety message, not everyone follows the same path when in comes to creating it. Here’s what I see.

Those utilities whose senior staffers “get it” with regard to this issue take to heart the need to model, reinforce, and praise the behaviors they want their workers to use. “How’s that,” you ask? It’s quite simple really. If the GM, the Ops. Manager, and the rest of the leadership group, all “walk around” their vehicles, or set out and retrieve their cones, or use spotters themselves, and do so every time they get to their vehicles, then the line workers seem to do so too. If you are now shaking your head saying to yourself, “But those rules only apply to the CDL trucks, not to the pick-ups and SUVs our managers drive,” then I think you may have just figured out one of the problems! If we impose rules on workers that add to their perceived workload or hassle factor, while exempting ourselves, is it any wonder that we would get less than full compliance? That the workers would feel dumped on? Wouldn’t you? It’s just human nature!

In addition, at utilities that seem not to incur backing losses, the leaders go out of their way to observe drivers, making an effort to catch them in the act of doing things right, so that they can congratulate and thank them for doing so. (And they quietly correct anyone who forgets.) This is how a safety culture is created, not by board policy, not by complex procedures, and certainly not by unpaid days off, but rather by showing, reinforcing, and rewarding the desired behaviors.

Okay, I know, it “says easy, does hard.” But it can be done, it has been done, and it is being done right now by some of the utilities I visit. (The ones with few or no vehicle backing incidents!)

AEDs Revisited

By R. Bruce Wright, CPCU

“It seems like a good time to revisit this topic and highlight a few developments.”

It has been some time since automated external defibrillators (AEDs) were last addressed in this newsletter, so it seems like a good time to revisit the topic and highlight a few developments.

To summarize the history of AEDs in the workplace, let’s begin by looking back to the year 2000. That year Congress passed the Federal Cardiac Arrest Survival Act (aka the Good Samaritan Law.) This statute offers protection to non-professionals against all liabilities arising from the emergency use of AEDs to assist victims of cardiac arrest, except in cases of “willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the victim…” The act also recommends the placement of, or AEDs, in all Federal buildings and provides for Federal Good Samaritan protection to emergency first responders who use AEDs.

In 2001 OSHA issued a strong recommendation in favor of increasing the placement, access and use of AED’s in the workplace. Details can be found in OSHA Publication 3174, (2001), which in their words “Stresses the need for AEDs in the workplace to save lives” and states that, “AEDs are effective, easy to use, and relatively inexpensive.” A summary of OSHA actions related to this subject can be accessed on-line at

Congress in short order took further steps in its efforts to endorse the use of AEDs, passing in 2002 the Community Access to Emergency Devices Act (Community AED Act) as part of the Public Health Security and Bioterrorism Response Act. This act made available $30 million in federal grants to states and localities for the purchase and deployment of automated external defibrillators (AEDs) in public places where cardiac arrests are likely to occur. The bill once again encouraged private companies to purchase AEDs and to train employees in CPR and emergency defibrillation.

By 2005 OSHA began to take steps starting the rulemaking process by announcing proposed rules (Rules 70:34821-34980; 2005, June 15) that directly address AED requirements for electric utilities. Included as part of the proposed rule, OSHA requested public comments on whether the standard should require the employer to provide AEDs and, if so, where they should be required and what the potential costs and impacts might be from such a rule. So far, no decision has been made to impose this requirement. Details of the proposed rules can be found on the OSHA Website at

In the years since 2000, many utilities have chosen to obtain AEDs based on their belief that these devices were valuable and effective additions to their loss prevention or health and safety programs. Many of the utilities we visit are among this group, with some going so far as to equip all or most of their crew vehicles in addition to the more typical provision of AEDs in their office and warehouse locations. Other utilities have chosen to postpone action, either awaiting rules compelling them to act or for other internal reasons of their own. If yours is one of these utilities, it may be time to rethink that decision.

Here’s some further food for thought–

The leading cause of death in the U.S. is sudden cardiac death (SCD) which it is also one of the leading causes of death in the workplace. Even more importantly to electric utilities, electric shock is a known cause of cardiac arrest and SCD even in healthy adults. As a result, there may be sufficient facts to lay the foundations for a theory of “foreseeability,” one of the key elements needed to establish civil negligence and legal liability.

In addition, it is apparent that AEDs are becoming ever more common in both public spaces and workplaces due to the governmental steps recounted earlier in this article as well as because employers have found a variety of other good reasons to deployment AEDs. This is changing the basis for public expectations, especially for workplaces with known high risk factors.

Finally, CPR training, which is required for utility workers, now routinely includes instruction on AED use. Most of the CPR training regimens in use by our clients include this training.

The bottom line is that as a result of all these factors, it is increasingly possible to make a good case that today, for companies with high risk environments for SCD such as electrical utilities, the liability arising from a decision not to provide AEDs in the workplace is actually greater than doing nothing at all. So where does that leave us? Here are some facts:

1. While so far OSHA does not specifically require AEDs, OSHA’s General Duty Clause states that employers must provide a workplace “free from recognizable hazards that are causing or likely to cause death or serious harm to employees.” (Court interpretations of this clause conclude that it means that employers have a legal obligation to provide a workplace free of conditions that cause, or are likely to cause, death or serious physical harm to employees when there is a feasible method to abate the hazard.)

2. The majority of utilities seem to have elected to deploy AEDs for their potential benefits to both employees and the public.

3. People are generally more aware of, and comfortable with, the idea of AED use, and may even be coming to expect to find them generally available.

4. The civil law legal climate often closely tracks public attitudes and expectations.

5. Prices for AEDs have fallen steadily since 2000, and new units are available for well under $1,500, while refurbished units (Usually demo units, fully guaranteed) are even more economical.

Only you and your managers can decide what this adds up to for your utility. But I can’t see why anyone would hesitate to invest in the acquisition, deployment, and employee training on the use of as many of these AEDs as they have buildings and crew vehicles. A relative small investment may prevent tragic and costly outcome.

Risk Management and the Smaller Company

By R. Bruce Wright, CPCU

Most of the utilities in this power program are small enough not to have a full time “Risk Manager,” and consequently the work that would be assigned to a Risk Manager at a larger organization is usually spread out among multiple people. Other than at the largest members of our program, typically the Finance VP or office manager gets the insurance purchasing assignment (with guidance and/or approvals required from others), operations managers may be directed to make field decisions related to risk reduction, the designated safety officer gets the general safety assignment, and in most cases no one is given the explicit task of looking at the process of risk management holistically.

Does it matter? I think it does, so let’s take a quick look at what Risk Management is and how it relates to safety and loss prevention. (Warning, the next few paragraphs may be a bit dry and scholastic in tone, but please hang in there so we can all have a common frame of reference. The basic concepts are those advanced in the Chartered Property and Casualty Underwriters program.)

Let’s start with a basic definition of Risk Management. Traditionally, Risk Management is focused on managing safety, purchasing insurance, and controlling financial recovery from losses generated by hazard risk. A Risk Management Program is the system for planning, organizing, leading and controlling resources and activities that an organization needs to protect itself from the adverse effects of accidental losses. An even broader definition of Risk Management includes Financial Risk (outcomes from investing) and Strategic Risk (outcomes from business management decisions.) These are risks that involve the possibility of either loss or gain to the organization. For the purpose of this article, I will focus only on the pure risk associated with traditional Risk Management, where the outcomes are “loss or no loss,” not “loss or gain.”

There are four primary techniques available for use in a Risk Management Program. These four techniques are:

1. Risk Avoidance – eliminate the risk. For example, an electric utility may decide not to offer other services or products like propane, or appliances. They may also choose to have certain work performed by outside contractors, effectively eliminating the risk in particularly hazardous activities, such as blasting.

2. Risk Reduction – mitigate the risk. This is an “after the fact” effort, intended to get losses from getting larger than they have to. Having an automatic fire alarm is an example, as is using an outsourced specialty contractor to mitigate oil spills from transformers.

3. Risk Retention – accept the risk. Risk retention is a strategy where the cost of insuring against the risk would be greater than the total losses sustained; or risks that are so large or catastrophic that they either cannot be insured due to scope or infeasible premiums. (Deductibles are also a form of retention up to a pre-selected limit.)

4. Risk Transfer – purchase insurance to cover the risk. Risk pools are technically retaining the risk for the group, but spreading it over the whole group involves transfer among individual members of the group. This is different from traditional insurance in that losses in excess of available funds may be assessed back to all members of the group.

My goal here is not to present a class in Risk Management. Instead, the case I want to make is that there are unintended consequences of the way these techniques and functions are traditionally thought of in smaller companies. Senior Managers of utilities in this program tend to see insurance as a core element in Risk Management and they typically assign the responsibility for this important task to a high level person, such as the Finance VP, Office Manager, or even retain it themselves. However, they all too frequently see safety as a separate effort that is assigned elsewhere in the chain of command, often to a lower level member of the Operations Department. As a result, the two functions are not coordinated, and no one has responsibility for the “big picture” short of the GM or CEO.

I understand that many (if not most) of our program’s insureds are not in a position to hire a full time Risk Manager in the senior level of the company. However, the most effective approach to the problem of keeping safety and risk management working effectively in a coordinated manner is to keep both functions clearly in view. To achieve this, a number of participants in this program have decided to have their safety officer report directly to the GM or CEO. This accomplishes a number of good things. First, it removes the safety function from the direct impact of operational considerations, which provides some insulation (No pun intended!) from the pressures inherent in responding to demands caused by weather, equipment failures, or budgetary concerns. Secondly, it offers direct access to the top for the safety officer, providing a regular channel of communication as well as immediate access to the top when quick action is needed. Thirdly, it supplies the GM with regular reminders of all safety activities, which any leader needs to stay involved as a matter of course. Finally, it raises the profile of the safety effort and may even provide for regular reporting on safety efforts to the Board of Directors.

An effective Risk Management Program for reducing losses- liability, property, auto and WC- regardless of how well designed and planned, will only succeed when supported by a company culture that values it, and company cultures start at the top, as you have heard me say in the past.

Copper Thefts and How to Deter Them

By R. Bruce Wright, CPCU

Recent reports from the field, as well as claims activity monitoring, confirm that with the rising price of copper the thefts of copper wire and materials have been trending upward over the past year or so. Incidents have included thefts from yards and warehouses, and even more problematically from substations.

Thefts from yards and warehouses can be addressed through the use of traditional prevention and deterrence techniques that we are all familiar with. These start with the basics:

  • Ensure that yards are fenced and secured, gates are not only equipped with locks, but the locks are actually engaged, preferably through automatic systems.
  • Control access to warehouses by keeping all entrances secured for employee use only and devise systems to always make sure that access is limited to authorized users at all times, including of course at night.
  • Provide perimeter alarms, gate alarms, interior motion detectors, local sirens, automatic dialers and monitor them.
  • Use video surveillance cameras monitored by dispatchers or at least recorded.

Most utilities are diligent in doing many or all of these things, limiting the opportunity for theft from their warehouses and yards. But thefts from substations are more problematic. A recent survey reports that 7 out of 8 responding utilities reported at least one unauthorized intrusion into a substation within a 12 month period, with many reporting even more incidents. Of these intrusions, nearly 1 in 3 resulted in a theft, typically of copper wire or copper materials.

An effective response to these threats requires a multi-level effort that includes deterrence measures, detection and evaluation techniques, and a response plan. Such an approach may require an upfront investment, but the savings can be significant.

Threat deterrence at substations includes the obvious physical deterrents like fencing, hardened vehicle gates, secure locking systems or “smart locks.” Security fencing is a vital layer to your substation security program. In some instances you may wish to consider using higher than normal fences, double fencing, concrete footings around the base of the fences, or even solid walls on some or all sides. Your substations should already have locks, but there are higher tech alternatives now available, such as “remote open” locks that require activation across the internet in order to open and non-reproducible keys with locks manufactured such that the locks better resist traditional cracking techniques. Smart locks and access cards can communicate instantly with your computer systems providing details on who has had access to your substations and for how long. Using these system you can customize access settings, by user or by location.

Substation threat detection and evaluation goes beyond simple perimeter control efforts. Motion detection, sound detection, live video surveillance and similar techniques are all available now to detect and assess threats to your substations. Widespread access to wireless communication networks and private fiber optics has made these approaches more economical than ever before. Live video surveillance coupled with onsite theft deterrents like sirens and strobe lights that can be remotely activated are in use at several of our systems. These systems can be activated by motion detectors that provide a live feed to the monitor, who then can evaluate what is seen for an appropriate response, which reduces or even eliminates false alarms which are the major complaint about automatic systems.
The third element of the program is a well developed response plan in the event that an intrusion occurs. It should cover issues such as who determines the nature of the response, when to involve the law enforcement, what to do to get a substation back online in the event of a catastrophic intrusion, and the list goes on as far as your imagination can carry it.

Finally, attention to a few related elements should support these efforts. You should have security signage with warnings, in multiple languages where appropriate, to convey your commitment to security, including the presence of surveillance cameras. You should never use your substations to stage or store non-critical materials. Storage of materials can create an even greater lure for thieves and incite intrusions that otherwise would not happen. When possible camouflage your storage of critical replacement parts. You should have a program of regular substation visits that include a security review. A checklist ought to prompt the inspector to check security lights, check for undergrowth that could provide cover, and compare any electronic records and work order records of visits to the substation.

Enhancing your security efforts in these ways will work to minimize expenses due to thefts and theft related damage. And don’t forget, work to convince your state government to require scrap metal dealers to keep positive IDs to track people who sell supposed “scrap copper” to them, since only the elimination of the market will finally stop these thefts!

Cogeneration, Electrocution, and Urbanization

As noted earlier, HA arranges coverage for a variety of power facilities, each of which presents its own set of exposures. “Generation facilities can be large or small,” Hurtado says. “They generate power from coal, natural gas, or other fuels; and that is what puts power into the grid. They sell their power to distribution facilities, which generally have multiple contracts to sell power to the end user, which is an individual or business.

“Cogeneration,” Hurtado continues, “is the simultaneous production of electricity and heat using a single fuel such as natural gas, although a variety of fuels can be used. The heat produced from the electricity generating process (for example, from the exhaust systems of a gas turbine) is captured and used to produce high- and low-level steam. The steam can be used as a heat source for both industrial and domestic purposes and can be used in steam turbines to generate additional electricity. Cogeneration technology provides greater conversion efficiencies than traditional generation methods as it harnesses heat that would otherwise be wasted,” Hurtado explains.“We generally inspect a generation or cogeneration facility before we offer a quote because we want to make sure that it’s operating according to the standards established for that particular piece of equipment,” he says.

Generation and cogeneration facilities have a public liability exposure, Hurtado says, “but it’s not as great as that for a distribution facility, because they are a step removed from the general public.”

Power distribution facilities include electric cooperatives, municipal facilities, and public utility districts. “The distributor is an intermediary between the generation or cogeneration facility and the end users, who are residential, commercial, or industrial consumers,” Hurtado says. “While there are a variety of incidents that can cause a loss in the utility industry, our primary concern is contact cases, when an individual comes in contact with a live power line.”

“Electrocutions happen for a number of reasons,” Hurtado notes, and these run the gamut from bad judgment to bad luck. Electrocution,” he explains, “not only can cause death but also can result in severe burns, loss of limbs, or quadriplegia.

“If a person touches a power line when he is grounded, the electricity enters the body and leaves with such tremendous force that there is little chance of a complete recovery.”

Urbanization factor

The incidence of electrocutions and touch incidents has increased,” Hurtado observes, “because of what I like to call the urbanization of rural America.

“Over the last 40 years, we have witnessed many people moving into rural areas for a variety of reasons. Because of the advent of air conditioning,” he adds, “many rural areas of the South have become major metropolises. Forty years ago, Orlando was just a small town in central Florida—but look at it now.

“Atlanta and Tampa are other examples of how air conditioning has been a factor in making these warm temperate and subtropical areas much more attractive as permanent places to live, raise families, and retire,” Hurtado continues. “This migration has transformed many areas that not too long ago were considered rural into large cities and towns. Larger populations not only put more stress on power distribution facilities; they also bring more people into contact with power lines.

“Windstorms are caused by a variety of atmospheric conditions and can easily bring down or cause power lines to sag,” he explains. “For some reason, some people don’t seem to realize the danger involved in touching or attempting to move a downed or sagging power line. The fact that a line is down or sagging doesn’t mean it no longer has power running through it,” Hurtado observes. “The best course is always to assume that the line is energized and let the professionals from the power company make an assessment and take the appropriate actions. Over the years we have experienced a variety of electrocution claims. It’s likely that most could have been avoided by the exercise of appropriate caution and respect for the power source at hand.”

In addition to claims from the general public, Hurtado says, “we have experienced a variety of claims brought by general contractors or subcontractors who were injured while working near power lines. Again, using appropriate equipment that is non-power conductive, maintaining an adequate distance from live lines, working closely with the power company to make sure lines are discharged before work on or near them takes place, and a healthy respect for the danger at hand are keys to preventing a tragic injury,” Hurtado declares.

Don’t take electricity for granted

Flip a switch and your lights come on, your TV screen leaps to life, and your microwave starts to reheat your Szechuan leftovers.

For most Americans, electricity is an unseen yet vital force that we take completely for granted until an ice storm leaves us shivering in the dark or an August heat wave shuts down the local power grid. The people who design, build, maintain, and repair power generating facilities, however, take nothing for granted as they work to keep electricity flowing to our homes, stores, offices, schools, hospitals, and factories.

And if you think generating and distributing electricity is challenging, consider the complexity of arranging insurance coverage for the myriad of exposures faced by these facilities.

History of Hurtado & Associates

Bringing both industry experience and underwriting expertise to the table is Hurtado & Associates, Inc. (HA), a finite niche insurance brokerage based in Sandy, Utah, that specializes in placing insurance for power distribution facilities throughout the United States.

Jess Hurtado, founder and managing director, has 30 years of insurance experience that includes broking, underwriting, alternative risk, claims analysis, risk management, and program management. He began his career in 1978 with Stevenson, Collinsworth & Nielson, an independent agency based in Miami. Jess has subsequently held positions with Bayley, Martin & Fay and Rollins Burdick Hunter, major brokerages that ultimately became part of Aon. Since 1996, Mr. Hurtado has worked exclusively in the insurance marketplace for power distribution facilities, focusing on arranging coverage for rural electric cooperatives. In 2005 he left Aon to form Nielson, Hurtado and Associates, which is now Hurtado and Associates, Inc.

“What is now HA’s electric utility program,” Hurtado says, “is over 30 years old and has been operating continuously through a variety of company names. We are proud to be part of this ongoing tradition.

“Since the formation of HA, we have expanded our business to include not only electric cooperatives but also municipal power distribution facilities, public utility districts, generation facilities, and cogeneration facilities,” Hurtado explains. “We have grown from what was essentially a one-carrier market to a retail operation with multiple markets within each segment of the insurance marketplace.”

A one-stop shop

HA’s mission, Hurtado says, is “to provide one-stop shopping for power distribution facilities; to coordinate, through our market knowledge and relationships, the most comprehensive coverage and competitive pricing available. We currently place business throughout the United States, and we are licensed in all 50 states.

The HA staff brings focus and commitment to meeting the insurance needs of electric utility risks. Each staff member was involved with the electric utility program prior to the formation of HA. Serving as administrative manager is Tonya Hill, who has worked on the electric utility program since 1999. She works closely with the firm’s brokers and insureds on all aspects of account placement and management. Will Potter has been part of the utility team since 2002 and is HA’s key account manager, working with brokers and underwriters in the analysis, underwriting, and placement of accounts.

Hurtado’s son, Jared, has been working with the utility program for six years. He is the President of HA and is the lead producer for marketing and new business production.