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A large tree branch had struck the front and undercarriage engine bay of the machine. It fractured and broke the engine oil lubricant pressure switch/sender that is fastened to the engine oil filter housing. This led to an oil leak resulting in the complete emptying of oil lubricant from the engine; resulting in catastrophic engine failure.
The machine was in a good condition prior to the incident. At the time of assessment, there appeared to be no significant evidence of pre-existing damage.
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Treadmill desks have become a topic of increased curiosity; they’re all over social media with millions of views, especially after the work from home culture kicked in.
Having fitness for work conversations can be confronting and challenging for both leaders and workers as they may involve questions of personal health (mental or physical), uncertain outcomes, sensitive topics and strong emotions. As challenging as they are, they are a vital tool for effective people management.
The damage sustained to the machine included the front grille panel, front surround panelling, air condenser, cooling pack and complete engine assembly.
The Shire had declared the machine for $90,000 and it was expected that the actual repair costs would be significantly higher due to higher costs of parts, freight and additional damage being discovered. This meant that the expected repair costs would exceed the declared value, making the machine uneconomical to repair and an economic total loss for claim purposes.
The current market value of the machine was around $110,000- $120,000, $30,000 more than declared by the member.
The issue of undervaluation is affecting many members at the moment as the second hand market for vehicles has skyrocketed and combined with supply chain issues worldwide, vehicles and machinery are more valuable than they were in pre-COVID, z2020, times.
The member decided to retain the damaged equipment; members are entitled to do this if they wish however it means that we must deduct the salvage value from the settlement. Generally the member will do this if the asset has parts that can be utilised as part of their maintenance arrangement.
Lessons from this case
From a claims perspective, we were able to settle on the declared value the member had elected on their asset register.
The issue is that inflation and economic conditions continue to deteriorate and local governments should carefully consider if leaving contingency is valuable vs
potential impact of a loss.
This is a great example to remind members to review their declared asset values across the board. In this instance, the impact was only $30,000 but if this was a major building asset, the impact could have been in the millions.
Local governments face a range of challenges when managing their people, avoiding injury and reducing workers’ compensation claims. Like many industries, the sector is managing an ageing workforce and an increase in chronic issues such as obesity, heart disease, and mental illness.
A major return to work barrier, following a long absence due to an injury or health concern, is a worker’s ability to keep up with the
physical demands of the role. Every job role has a unique footprint that requires different physical and cognitive capabilities.
Businesses worldwide are experiencing the effects of the highest inflation rate in a
generation. WA local governments need to consider inflationary pressures when valuing both their property and motor assets so that they can be confident that if disaster strikes, your protection will be adequate to appropriately respond.
LGIS is the unifying name for the dedicated suite of risk financing and management services for WA local governments, established by the WA Local Government Association in conjunction with JLT Public Sector (part of the Marsh group of companies). LGIS is managed by JLT Public Sector (ABN 69 009 098 864 AFS Licence 226827).
Risk Matters, via this website, is designed to keep members, their staff and elected members informed on topical risk management and insurance issues and LGIS programs and services.
