April 12, 1995

INSURANCE INFORMATION NOTICE 95-5

SUBJECT: BOILER AND MACHINERY PREVENTIVE MAINTENANCE/SERVICE CONTRACTS

 

Some agencies or facilities do not have personnel who are assigned the responsibility of performing scheduled preventive maintenance/service on boiler and machinery equipment and choose to contract out this service. These agencies contract with an independent contractor to perform these tasks.

Some of these contracts include the provision that the contractor will bear the cost of repair or replacement of boiler and machinery equipment. The contractor's contract amount is set to include the cost of repair or replacement of equipment covered by the contract.

If boiler and machinery loss occurs on a piece of equipment for which there is a maintenance/service contract, the following action should be taken immediately.

-- Immediately submit notice of loss to the ORM Property Claims Unit.

-- Make sure the ORM adjuster is aware that such a contract exists and upon request furnish a photocopy of said contract.

-- Retain and preserve any objects/parts of machinery and/or products which may, have caused, contributed to, or which are suspected of causing the accident, for inspection by a claims adjuster assigned by ORM.

-- If a failed object is moved to a vendor for repair/replacement, notify the ORM Property Claims Unit of the location of the object. Instruct the vendor not to dispose of the damaged parts until released by agency, with ORM approval.

Adherence to the above will assist the adjuster in processing the insurance claim and may lower the cost of insurance. Failure to adhere to the above could jeopardize your coverage.

Questions regarding individual claims should be directed to James Lea, Property Claims Supervisor, at (504) 342-8484 or LINC 421-8484. General coverage questions should be directed to Valerie Byrd at (504) 342-8470 or LINC 421-8470.