2/27/2014

Hot Work Losses

Identifying key elements in cutting and welding subrogation claims.

By Peter A. Lynch

When it comes to fire losses, missteps around “hot work”—which involves cutting and welding—are more common than one might expect and can ignite significant damage and property claims. In fact, a University of Iowa study found that the U.S. averaged 12,360 hot work fires, $309 million in property damage, and 31 deaths per year.

An example of how hot work errors pose a substantial fire hazard involves a welder working on a vent onboard the Alaskan state ferry Malaspina. The welder accidentally triggered a fire, causing $750,000 in property damage to the nearly 50-year-old ship valued at $107.5 million.

This article will cover what constitutes hot work, key standards to review when evaluating hot work claims for subrogation, and suggestions on improving recovery in hot work losses.

Defining Hot Work

Hot work losses need to be evaluated step by step. And like Bud Abbott and Lou Costello’s famous comedy skit on baseball called, “Who’s on First?” getting the sequence and players right can be confusing. As Costello tries to get the details straight, Abbott tells him “Who’s on first, What’s on second, I Don’t Know is on third….” The round and round confusion made for good comedy, but lack of certainty is no laughing matter in hot work claims.

So, who is on first? The initial step is to determine what qualifies as hot work. It’s defined by the National Fire Protection Association—NFPA 51B: Standard for Fire Prevention During Welding, Cutting, and Other Hot Work 3.3.2 [2009]—as “work involving burning, welding, or similar operations that is capable of initiating fires or explosions.” See also OSHA Standard 1910.252 on “Welding, Cutting, and Brazing.”

Hot work includes brazing, torch cutting, grinding, torch soldering, thermal spraying, thermite welding, thawing pipes, and installation of torch-applied roofing and welding. All of this type of hot work generates heat, hot slag, and sparks that can ignite combustible and flammable materials that are not properly protected. The potential fire hazard may not be apparent due to concealed areas, crawl spaces, wall assemblies, and substructure spaces near the location where the hot work is being done. For these types of losses, you’ll need to determine if the loss involved burning, welding, or similar operations. 

Finding the Paper Trail

A paper trail is critical when pursuing subrogation in a hot work matter, so it is important to obtain the operable documents related to the work. Was a permit secured? Were plans submitted? Most hot work requires the authority with jurisdiction over the property to have issued a permit. A hot work permit normally identifies the building and its location, description of the hot work, name of the hot work operator, if a fire watch (person assigned to ensure safe conditions are maintained) is required, and reasons for the fire watch.

Normally, the permit requires all combustible and flammable materials to be removed from within a 35-foot radius of the hot work. A checklist should specify that all surfaces and floors should be swept free of combustible dust and debris in the area, which includes covering cracks and openings in walls. In addition, professionals should cover floors and ducts in the affected area. Smoke detectors also should be covered to prevent false alarms, and sprinkler heads should be protected with a wet rag. A fire watch should be posted, and an operable fire extinguisher should be accessible. Once all of these items have been taken care of, the authority having jurisdiction then signs off on the permit.

If combustible and flammable materials cannot be removed, steps must be taken to cover them with welding blankets, curtains, or pads. Each is designed to be placed in the vicinity of hot work operations to address specific scenarios according to NFPA 51B.

  • Welding Blanket – A heat-resistant fabric intended for use in horizontal applications and designed to protect machinery and prevent ignition of combustibles such as wood that are located adjacent to the underside of the blanket. (NFPA 51B 3.3.7)
  • Welding Curtain – A heat-resistant fabric intended for use in vertical application and designed to prevent sparks from escaping a confined area. (NFPA 51B 3.3.8)
  • Welding Pad – A heat-resistant fabric designed to be placed directly under a hot work operation, such as welding or cutting. It is intended for use in horizontal applications with severe exposures and designed to prevent the ignition of combustibles that are located adjacent to the underside of the pad. (NFPA 51B 3.3.9)

In addition to NFPA 51B and OSHA Standard 1910.252, it is vital to determine what the fire code for the loss location requires. For example, Chapter 26, Section 2601 of the California Fire Code applies to welding and other hot work and notes, “Hot work shall only be conducted in areas designed or authorized for that purpose by the personnel responsible for the hot work program.” There may be overlapping standards between NFPA 51B, OSHA 1910.252, fire and other building codes, local codes, and ordinances. All need to be analyzed and harmonized as a responsibility of the operator.

If a permit was issued, review its terms and conditions. For example, Oakland, Calif., Code of Ordinances chapter 15.36 on demolition permits is related to cutting work and makes it unlawful to demolish without a permit under most circumstances. Several questions should be addressed, including:

  • Did the hot work operator comply with the terms and conditions?
  • Did the permitting authority inspect the hot work site before operations began? If so, what restrictions were applied to the work?
  • Did the operator fail to get a permit, potentially violating local ordinances?
  • Did the operator fail to get the permit because he did not want his work plan to be evaluated for safety or to cut costs?

Additionally, were welding blankets, curtains, or pads used, or were they omitted despite being necessary? Many fires happen because of the failure to properly shield openings or cracks in walls, floors, ducts, or shafts from sparks emanating from hot work. Fires often are discovered later to have resulted from the initial combustion from a smoldering ignition remaining undiscovered until open flaming occurs. The complex nature of discovery means it is critical to have a knowledgeable expert review these and other related issues. 

Operator Qualifications

It is important not to overlook examining the qualifications of the hot work operator. Be sure to determine what type of license the operator possesses and whether he is a demolition contractor if the hot work is being done in a renovation project. Is the operator a certified welder with a knowledge of different types of welds (e.g., fillet, full pen, pipe 6G, pipe 6GR)? How long has he been a welder? What training did the operator have regarding permitting and safety procedures for the specific equipment being used for the hot work? 

Following the Rules

Investigate whether the operator was following the rules of the game and used the appropriate tools in the welding/cutting process. What type of equipment did the operator use—electric, gas welding, or oxy acetylene? If oxy acetylene, what size nozzles were used? What were the gas flow settings? It is important to find out what the gas flow settings were, in part, to assess the operator’s knowledge.

 Find out if a pre-hot work check of the equipment was done to ensure safety. If any equipment was found damaged, was it still used? If a claim of repair was made, was it handled by qualified personnel? Determine if there was an equipment check done at the site and if the report is available for review. 

It’s critical to identify the status of fire suppression systems at the time of the loss. For example, were fire suppression systems entirely shut off, potentially violating applicable fire codes? Entire alarm systems and smoke detection should not be off. Automatic sprinkler systems also should not be deactivated, only individual heads near the hot work.

In addition, identify whether the operator had a fire extinguisher, which must be accessible and available. Was the required fire watch posted? Normally, a fire watch must be used when combustible materials cannot be removed within a 35-foot radius of the hot work. That fire watch should stand guard for at least 30 minutes after the hot work is completed. On-site conditions may require the fire watch to remain longer than 30 minutes. Moreover, more than one fire watch may be needed if combustible materials could be ignited by hot work operations and cannot be directly observed by the initial fire watch.

Hot work is not permitted if a building’s entire sprinkler system is turned off. Similarly, it is not allowed if the complete building fire detection system is shut down. Moreover, if explosive atmospheres exist, including mixtures of dust, liquids, vapors, or gases, then hot work is not permitted.

Recovering from Hot Work

Armed with the right tools, hot work recovery is possible. Case in point: A fire loss several years ago involved modular classrooms that were being assembled on a school site. The modular units were manufactured off-site and shipped to the location. However, when the installer attempted to assemble the modular classrooms, they did not connect together. A decision was made to have welders come on-site to cut away materials and ease the connections. The welders were recalled one afternoon to a building and sprayed water on an area where there was smoke and melted insulation. They left the site that day between 3:30 p.m. and 4:00 p.m. A fire broke out afterward, and the fire department responded at 6:18 p.m. Unfortunately, the cutting work done earlier in the day started a chain of events that ultimately led to a fire breakout after the welders had left the premises. Fire loss damages were in excess of $400,000.

Upon assignment of the loss, the claims personnel recognized its potential for subrogation. A consultant and counsel were retained, and identified parties were placed on notice. A site inspection with interested parties took place. Essential evidence needed to prove the case was examined and stored. The notified parties declined to accept responsibility and, once the loss was substantially adjusted, litigation commenced. The contractor building the modular classrooms on-site and the welding companies were named defendants in the civil suit. After a series of depositions of key contractor personnel was taken, the matter successfully settled with a significant recovery.

Courts have noted that fires started by sparks often require fact finders to rely on circumstantial evidence because no one sees the fire start. In W.B.Camp & Sons, Inc. v. Turner Steel Erection Company, the court noted that the deceptive nature of fire and the stealthy incidence of destructive blazes make reliance on circumstantial evidence a virtual necessity. Because of the insidious, destructive nature of hot work fires, a comprehensive investigation, including retention of evidence and appropriate consultants, is vital. Hence, the claims professional needs to identify who is on first and what is on second to bring home a successful subrogation recovery.  



Peter A. Lynch is a member of the subrogation and recovery department at Cozen O’Connor. He can be reached at plynch@cozen.com or follow him on Twitter @firesandrain.

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