FM Global Property Loss Prevention Data Sheets

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January 2001 Page 1 of 5

THE HUMAN FACTOR OF PROPERTY CONSERVATION

Table of Contents
Page 1.0 SCOPE ................................................................................................................................................... 2 1.1 Changes .......................................................................................................................................... 2 2.0 LOSS PREVENTION RECOMMENDATIONS ....................................................................................... 2 2.1 Introduction ...................................................................................................................................... 2 2.1.1 How the Human Factor Contributes to the Hazard .............................................................. 2 2.1.2 Managements Key Role in the Human Factor ..................................................................... 2 2.1.3 What You Can Do To Manage the Human Factor Hazard ................................................... 2 2.2 Human Factor .................................................................................................................................. 2 3.0 SUPPORT FOR RECOMMENDATIONS ............................................................................................... 2 3.1 Priority Activities of the Human Factor ............................................................................................ 2 3.2 Loss History ..................................................................................................................................... 3 3.2.1 Hot Work ................................................................................................................................ 3 3.2.2 Lift Truck Operator Training ................................................................................................... 3 3.2.3 Electrical/Human Factor Related ........................................................................................... 3 3.2.4 Various/Human Factor Related ............................................................................................. 3 3.2.5 Emergency Response ........................................................................................................... 4 3.3 Illustrative Losses ............................................................................................................................ 4 3.3.1 Hot Work Management ......................................................................................................... 4 3.3.2 Equipment Maintenance ........................................................................................................ 4 3.3.3 Loss Prevention Inspections/Building Maintenance .............................................................. 4 3.3.4 Management Commitment to Property Conservation ........................................................... 4 4.0 REFERENCES ....................................................................................................................................... 4 APPENDIX A GLOSSARY OF TERMS ....................................................................................................... 5 APPENDIX B DOCUMENT REVISION HISTORY ....................................................................................... 5

2002 Factory Mutual Insurance Company. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted, in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission of Factory Mutual Insurance Company.

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The Human Factor of Property Conservation

FM Global Property Loss Prevention Data Sheets

1.0 SCOPE This data sheet is intended to be an overview document or preface to the 10-series data sheets. It provides subject matter related to the Human Factor relative to property conservation. Its intent is to highlight those activities where the Human Factor is most likely to impact on the frequency and/or severity of loss to property and/or business interruption. Documented losses are the basis for the highlighted areas. 1.1 Changes This is the first publication of this document. 2.0 LOSS PREVENTION RECOMMENDATIONS 2.1 Introduction 2.1.1 How the Human Factor Contributes to the Hazard Properly trained employees can have a positive effect on reducing the impact of a loss from an emergency situation. At the same time, however, people not effectively trained in the operation, maintenance, or emergency response of plant equipment, processes, or physical hazards in a facility, create the potential for errors in judgement and action. The results from these improper human decisions can directly lead to the actual cause of an emergency incident or significantly exacerbate the situation. Inappropriate human activities oftentimes become an important factor in creating an environment for a property loss incident to develop. This can happen through improper operation of equipment, misunderstanding the hazards present, ineffective action to prevent or mitigate a developing emergency condition, improper maintenance of facilities/equipment and lack of planning for potential emergency conditions. 2.1.2 Managements Key Role in the Human Factor Senior managements understanding of the Human Factor is the key to effective management of this potential hazard. Management has the sole responsibility for adopting complete policies, implementing effective procedures, and appointing properly trained and empowered individuals to provide daily supervision for each of the stated human activities. An on-going commitment from senior management to properly manage the Human Factor is a requirement for effective loss prevention results. 2.1.3 What You Can Do To Manage the Human Factor Hazard Start by understanding the hazard from the Human Factor. Then implement needed programs that will minimize the potential for negative impact from the Human Factor, and maximize the possibilities for positive impact. Additional and more specific information on the Human Factor can be found in other references that are listed in Section 4.0 of this data sheet. For FM Global insured facilities, also consider contacting your local FM Global field engineering representative or account engineer for additional assistance. 2.2 Human Factor 2.2.1 Recognize the need for a corporate-wide formal program to minimize the negative impact and maximize the positive impact of the Human Factor in all facility operations. Address a wide range of human activities that are applicable to loss prevention (A list of Human Factor priority activities, based on actual losses, is given in Section 3.1). Once established, demonstrate senior managements commitment to managing the Human Factor by inclusion into a written property conservation policy. 3.0 SUPPORT FOR RECOMMENDATIONS 3.1 Priority Activities of the Human Factor Management Commitment to Property Conservation Pre-Incident Planning Emergency Response including Hazardous Materials Hot Work Management Managing Outside Contractors

2002 Factory Mutual Insurance Company. All rights reserved.

The Human Factor of Property Conservation

FM Global Property Loss Prevention Data Sheets

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Page 3

Loss Prevention and Control Inspections and Testing Equipment and Building Maintenance and Safety Control Testing Housekeeping and Storage Practices Equipment Operator Training Fire Protection Impairment Management Ignition Source Control Process Safety Management Property Supervision Managing Change Contingency Planning and Disaster Recovery Equipment Operator Training Including Cranes and Lift Trucks 3.2 Loss History An FM Global study of losses indicated that the Human Factor plays a negative role in approximately 2/3 of all losses. A few statistics and examples regarding this are given below. 3.2.1 Hot Work Hot Work losses are among the top causes of losses at properties insured by FM Global. And outside contractors cause over half of those losses. In a study for the ten years 1987 through 1996, contractors caused 236 fires and explosions while doing hot work at properties insured by FM Global. In the same study, employees caused 165 fires as well. These statistics show that one should not assume a contractor will automatically adhere to safe practices simply because they are contractors and do hot work all the time. This study also points out that safe practices should be followed by everyone all of the time, including in-house personnel. In another FM Global study of 616 hot work losses, 539 losses were caused by cutting or welding torches, and next in order were plumbers and painters torches at 37 losses. 3.2.2 Lift Truck Operator Training When used improperly, industrial lift trucks can cause severe fires and explosions, major gas leaks, water damage, and collapse of building roof areas and rack storage. An FM Global analysis of losses involving lift trucks between 1987 and 1996 revealed that more than half of these were caused by bad driving resulting in collisions. More than one-third of these involved sprinkler system damage. The trend is increasing, as the average yearly loss cost for the years 1993-1996 more than doubled over the yearly average for 1987-1992. About 2/3 of the fires and explosions involving LP-Gas trucks result from breaks or leaks in the fuel connections. 3.2.3 Electrical/Human Factor Related A study by FM Global was done for the period from 1992 to 1996 for fires and explosions at insured locations caused by electrical ignition, where the Human Factor was the cause or contributed to the extent of the loss. A total of 216 losses were found in this study. Maintenance, inspection and testing issues accounted for 44% of these losses, while 25% were attributable to emergency response techniques. Improper operation of equipment involved 16% of these losses, while the remaining 15% were related to housekeeping issues. 3.2.4 Various/Human Factor Related An FM Global analysis was done for the period from 1992 to 1996, for fires and explosions (except fire only for shut valves and adequately sprinklered fires) at insured locations where the Human Factor played a negative role. Also contractor losses were for various perils and not just fires and explosions. The arson losses are the fires and explosions where the cause was arson/incendiarism. There were 434 losses. The contractor related losses included 437 occurrences.

2002 Factory Mutual Insurance Company. All rights reserved.

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The Human Factor of Property Conservation

FM Global Property Loss Prevention Data Sheets

The hot work losses were related to the use of soldering pots or irons, grinding or buffing, brazing or roofer s torch, cutting or welding, etc. There were 321 occurrences. 3.2.5 Emergency Response An FM Global study was done on Emergency Response for the period from 1987 to 1997. This included 1718 losses total. It revealed that where the Emergency Response was ineffective or inadequate, the average loss was from 6 times to 19 times higher than where it was effective. 3.3 Illustrative Losses 3.3.1 Hot Work Management At a food processor located in a 70-year-old building of plank-on-timber construction, a contractor was removing obsolete machinery and piping from a third floor area. A member of the facilitys plant engineering staff checked with the contractor early in the morning and left the area. Reportedly the contractor had posted a fire watch with fire extinguishers. Shortly after work with an oxyacetylene torch was begun, fire was discovered in the second floor below the pipe-cutting work area, the result of molten metal globules falling through openings in the floor. Extensive fire damage was caused to flooring, palletized storage of cartoned food products, packaging material and records. Palletized storage of food product on the first floor was wet down. Management began implementing the hot work permit system shortly thereafter for both employees and contractors. 3.3.2 Equipment Maintenance At a hospital, two 16-cylinder engine generators are provided to supply emergency power. They are reportedly run unloaded for a half-hour every week and under load every four weeks. Routine maintenance was provided by a contractor. One day, Unit 1 had been operating under load for about 20 minutes when loud noises were heard. Before the operator could shut down the unit, a connecting rod came through the side of the engine block. Extensive internal damage was found. During the investigation, Unit 2 was also examined and found to be far outside of the manufacturer s specifications. Considerable damage to various components was found. For both units, the prime contributing factor was lack of power cylinder load balancing. 3.3.3 Loss Prevention Inspections/Building Maintenance At a concrete plant, cement dust was leaking out of a conveyor that ran across a buildings roof. The growing pile was ignored, and eventually caused a large section of the roof to collapse. 3.3.4 Management Commitment to Property Conservation A fire on a paper machine at a newsprint manufacturing facility caused extensive damage throughout the dry end of the machine. Fire spread was rapid with thick smoke filling the building, quickly making manual fire fighting very difficult. The rapid fire spread was in part due to poor housekeeping in the machine house. Polyester dryer felts and oil leaking from fire-damaged lubricating and hydraulic oil lines contributed to the fire. The most likely cause is spontaneous ignition of oil-soaked paper dust deposits. The fire was not controlled by the automatic sprinkler system, as the fire pumps were in manual mode rather than automaticstart mode because of leaks in the underground sprinkler main. By the time the fire pumps were started, the fire was out of control. The poor state of the automatic fire protection can be attributed to lack of management communication with regards to loss prevention and lack of a Property Conservation program. 4.0 REFERENCES Many other FM Global data sheets. Many listings in the FM Global Property Loss Prevention Resource, in the form of publications, learning kits, videos and seminars.

2002 Factory Mutual Insurance Company. All rights reserved.

The Human Factor of Property Conservation

FM Global Property Loss Prevention Data Sheets

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APPENDIX A GLOSSARY OF TERMS Human Factor: the Human Factor is the action or inaction that people introduce that directly impacts on the probability for a property loss incident to occur and/or affects the level of severity that an incident reaches. It can be a positive or negative factor. The hazard of the Human Factor is directly proportional to the physical hazards and processes present within a facility and inversely proportional to the level of preplanning, education and training provided for individuals in advance of the incident. APPENDIX B DOCUMENT REVISION HISTORY This document does not contain a document revision history.

2002 Factory Mutual Insurance Company. All rights reserved.