Metal Stamping and Fabricating Operations Update : Tuesday, June 25, 2013 BEST'S HAZARD INDEX

Best's Hazard Index

Line

Underwriting Comments

Automobile Liability

3

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General Liability: Premises and Operations

3

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Product Liability and Completed Operations

6

Degree of exposure depends upon a product's end use.

Environmental Impairment Liability

5

Cleaning and finishing operations pose pollution exposures.

Workers' Compensation

7

Power press operations could result in serious injuries to workers.

Crime

2

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Fire and E.C.: Property

5

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Business Interruption

5

Some machinery, equipment, and their parts may be difficult to obtain.

Inland Marine

4

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Boiler and Machinery: Equipment Breakdown

5

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Low 1-3, Medium 4-6, High 7-9, Very High 10

SIC CODES AND CLASSIFICATIONS 3469

Metal Stampings, Not Elsewhere Classified NAICS CODES AND CLASSIFICATIONS

332119

Metal Crown, Closure, and Other Metal Stamping (except Automotive) RELATED CLASSIFICATIONS

Scrap Metal Processors Sheet Metal Work Tool and Die Shops Wastewater Treatment Facilities (Nonhazardous) Welding, Brazing and Cutting SPECIAL EXPOSURES   RISK DESCRIPTION From bobby pins to garbage cans to mailboxes to ice cream scoops, metal products are found in every house, garage, business, and vehicle (including planes, trains, and ships) across the country. The fabricated metal products industry, also referred to as the metalforming industry, is comprised of two primary types of facilities: those that form metal shapes and those that perform metal finishing operations. This report will focus primarily on metal stamping, which as a sector within the metalforming industry, also includes metal fabrication, spinning, slide forming, and roll forming.

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

Metal stamping establishments are engaged primarily in manufacturing a wide range of intermediate and/or end ferrous and nonferrous metal products, including household appliance housings and parts; cooking and kitchen utensils; furniture components; tanks and containers; office equipment; and electronic and machine parts. The range of products manufactured depends, in part, on the type and size of the operation. Some metal stamping operations are captive (i.e., they are part of a larger manufacturing establishment that requires specific fabricated parts for its finished products). For example, the automobile industry, which accounts for more than half of the metal stamping industry's output, typically has automotive part stamping operations as a component of its overall manufacturing process; these shops will produce such items as fenders, body panels and trim, mufflers, hubcaps, and other automobile parts. However, the output of the metal stamping industry tends to be used as intermediate goods by other manufacturing industries, primarily manufacturers of durable goods (e.g., heating and plumbing equipment, engines and turbines, and fabricated structural metal). Therefore, demand for these goods will determine the demand for stamped metal goods. Some operations concentrate on metal crowns and are intermediate goods for nondurable manufacturing products, such as beverages and preserved fruits and vegetables. A metal stamping proprietor must determine first whether it would be feasible to undertake a given job and, if so, how best to meet the customer's needs by studying blueprints, diagrams-to-scale, and/or customer plans and specifications. For new items, either the stamp shop's engineers will design a prototype, which is approved by the customer, or the original equipment manufacturer (OEM) will design and build a prototype for the stamper, which is then manufactured in volume. Except for larger operations, most stamp shops rely on the OEM to develop and test a part prototype before it is released for tooling and production. Often, communication between the stamper and its clients is conducted via the Internet. Customers will send an electronic copy of the part print to the stamp shop through a secure online quoting system; the stamper will review the request, post a quote, and electronically return the estimate to the customer using a specific form. Metal stamping shops will receive raw materials in the form of sheet or coiled metal. The stamping industry uses two principal types of dies, steel or carbide dies, with single, progressive, draw, pierce, or trim operations. A prototype die is usually made of zinc and is used to make a few hundred parts to verify the shape of the die; a steel die replicate generally is then produced to complete the production run. The primary tool used in stamping is the power press, which can be mechanical, hydraulic, or pneumatic; mechanical power presses are the most commonly used in the stamping industry. The stroking of mechanical power presses is controlled by mechanical or electro-mechanical systems; these presses operate on a controlled reciprocating motion principle. A clutch, flywheel, and crankshaft form the main components for power transmission. As a workpiece is fed into the press, either automatically or manually, the ram (with an upper die) moves on a downstroke toward the point of operation. As the upper and lower dies press together on the stock metal, a reformed workpiece is produced. Using various dies attached to the ram and bolster plate, a power press allows workers to perform cutting, forming, and assembly operations. To fashion raw materials into desired shapes and sizes, shearing or cutting operations involve such processes as: punching or piercing holes or openings; blanking (which mimics cookie-cutting processes); cutoff; parting; and trimming. Also, dies can form material using any number of forming methods, including bending, drawing, coining, and embossing. Bending is the simplest forming operation; the part is simply bent to a specific angle or shape. Other bending processes may produce both two- and three-dimensional shapes. During the drawing process, a punch forces metal sheet stock into a die, where the desired shape is formed in the space between the punch and the die. Coining processes form metal by changing its thickness to produce a three-dimensional relief on one or both sides of the metal, like a coin. Finally, embossing processes produce a recessed imprint of an image on one side of a piece of steel, while conversely producing the same image raised on the other side. Nowadays, many large-scale stamping shops have some form of computer-like automation at their facility, and some will have highly automated production lines where programmable logic controllers or dedicated microprocessor electronic systems are used to control and monitor production processes. Robotic materials-handling arms can be programmed to load sheet metal into, for example, a press brake or bending machine, in which the metal is formed to specification, and then the robotic arm will remove the piece and the process begins anew. This type of production allows for continuous operation so that workers can program the machinery before they leave for the night, and return in the morning to find a pile of pressed metal awaiting the next step in the production process. To further improve production efficiency, the industry has also focused on reducing the downtime associated with die installation, removal, transport, and storage. Downtime from die changes has been significantly reduced (from hours to minutes) through the use of new systems of die lifters, pre-rollers, bolsters, cranes, and die carts. During the forming process, metals may remain cold (and so, direct physical pressure is applied to the metals) or be heated (to make them more malleable); very few stamping processes require heat, and heated material processes are more commonly associated with forging operations. Metal stamping operations employ the use of lubricants, which are used when forming metals; degreasing and cleaning solvents (e.g., acetone, xylene); acids (e.g., hydrochloric, nitric, sulfuric); alkalis; and heavy metals, all of which are used to clean metal surfaces. Some metal stamping shops also have fabricating or prototype operations, which employ the use of computer-numeric-controlled (CNC) programmable laser, water jet, plasma (i.e., gas-cutting), or punching machines to cut out metal parts and produce detailed holes and openings in workpieces. A water jet is similar to laser cutters that etch and sear holes through metal, but instead of shooting a laser beam, it fires a fine stream of water into the metal at a high velocity. This technology can be time consuming, but more precise in the cuts. Using such equipment eliminates the need for expensive stamping die tooling, and is typically used for low- and mid-volume parts manufacturing (from 1 to roughly

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

4,000 units); higher production runs will use conventional stamping dies. Other types of lasers and water jets are used to cut out highly complicated shapes from metal stock, which eliminates the need for costly trimming and piercing dies. Some metal stamping shops perform such surface finishing operations as cleaning, polishing, and painting on their manufactured products. Some full-service firms will have coating processes to apply finishes, such as porcelain (used in appliance part stamping), electrostatic coats, powder coats, and topcoat painting; plating operations are almost always contracted out to electroplating shops. It should be noted that fabricating and finishing operations may vary greatly depending on the metal stock and product involved. Where necessary, the product is tested rigorously for quality control purposes. Final steps may involve grinding or filing seams, joints, and rough surfaces, as well as testing the system (where necessary in conjunction with existing systems) to ensure proper operation. It is important to note that the industry has become quite automated along with advances in technology. Metal stamping facilities normally are designed around a large production area in which all phases of the stamping process are carried out, although some operations house certain parts of the process (e.g., finishing operations) in separate buildings. In addition to the production area, metal stamping facilities will consist of a reception area that typically is completely separated from production floors. There will be offices for executives, cubicles, or rooms where projects will be designed on computers, and where administrative and accounting functions will be handled; restrooms; cafeterias; storage facilities or yards; and shipping areas. Employee restrooms may also be made available to visitors. Shops are typically located in heavy industrial areas, since fabricated products are often used as parts in other manufacturing processes. Typical hours of operation are 8 a.m. to 5 p.m., Monday through Friday. Larger insureds may operate more than one shift and also run on weekends. Some operations, based on their size and amount of automated materials handling machinery, may operate around the clock. Rush jobs may require considerable overtime. Fabricating and stamping work is performed in a large production facility, typically running first and second shifts. Job descriptions include metallurgists, engineers, administrative personnel, truck drivers, and a variety of process workers (e.g., drill press operators, grinders, welders, die setters, tool makers). Smaller shops may range in size from 10 to 50 workers, mid-size operations often employ up to 100 workers, and large stamping facilities may have 500 to 1,000 or more workers. When entering this field of work, most production workers (e.g., power press operators, welders, die setters, mechanics, machinists, laser operators, crane operators) are required to undergo some kind of formal on-the-job apprenticeship, which involves learning about the various stamping procedures. Generally, a high school diploma or GED will be in order to pursue even entry-level metal fabricating positions. Employees in this field may also be required to have a related one-year certificate or technical diploma from a community college or technical school. Some insureds require an associate's degree in metal fabricating, or additional vocational training, for higher levels of fabrication work. Certain occupations, such as engineers and metallurgists, will require advanced college degrees. National metal stamping trade associations may administer apprenticeship programs, as well as continuing education courses for this industry. The Precision Metalforming Association (PMA), a trade group representing the metalforming sector, estimated in 2012 that the North American industry generated US$113 billion in sales.   The Precision Metalforming Association (PMA, which can be reached at www.pma.org) is the full-service trade association representing the $113-billion metalforming industry of North America. Fabricators and Manufacturers Association, International (FMA, which can be reached at www.fmanet.org) is a professional organization with more than 2,300 individual and company members from the United States, Mexico, Canada, and more than 40 other countries working together to improve the metal forming and fabricating industry. Canadian Tooling and Machining Association (CTMA, which can be reached at http://ctma.com) is a non-profit trade association that represents and promotes the interests of the Canadian tooling and machining industry, both nationally and internationally. In the United Kingdom, the Metalforming Machinery Makers' Association (MMMA, which can be reached at http://www.mmma.org.uk) is the only body solely dedicated to representing the sheet metal forming industry in the UK.   MATERIALS AND EQUIPMENT Sheet and/or coiled metal of various types (e.g., carbon steel, aluminum, stainless steel) and gauges; plate metal; bar stock. Fabrication equipment: power shears, saws, punches; jig borers; hand and power brakes; bending, notching, and forming machines; milling machines; lathes; coilers; grinders; sanding and sandblasting machines; degreasers; spinners; finishing machines; spot welders; wire cutters; laser cutters; water cutters; riveting and welding equipment; handheld power tools; cutting oils; coolants. Stamping equipment: mechanical, hydraulic, and pneumatic power presses; reels; straighteners; automatic feeds; in-press and between-press transfer systems; horizontal pallet unwinders; conveyors; parts bins; assorted dies. Quality control and laboratory equipment: precision micrometers, transducers, scales, laser interferometers, optical comparators, alignment checking devices, inspection machines. Various types of finishing coatings; cleaning solvents; paint, porcelain, and enamel application facilities. Pollution control equipment.

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

Personal protective clothing and devices, such as gloves, aprons, boots, face shields, eye goggles; self-contained breathing apparati. Materials handling equipment: hand trucks, forklifts, electric hoists, cranes, automated robotic arms and related machinery. Computers; manufacturing computer software; design and engineering blueprints; office furniture and equipment. PROCESS OR SERVICE   NARRATIVE LINES OF LIABILITY Automobile Liability The Automobile Liability exposure will depend on whether the insured delivers finished goods. Raw materials are usually delivered by suppliers. Metal stamping shops will deliver finished goods, either by company-owned vehicles or by common carrier, depending on the size of the product and the location of the client. Typical hazards will include inclement weather, driver error, fatigue, shifting cargo, and electronic distractions. Other driving activities may include pickup and delivery of general supplies, visits by sales representatives, and occasional visits to clients. Generally, the Automobile Liability exposure for metal stamping operations will be slight, and will be further reduced if shipping is handled through common or contract carriers. The underwriter should determine whether the insured owns or leases its vehicles. What are the number, ages, types, and conditions of the insured's vehicles? Most metal stamping firms will contract out delivery services with public carriers and will not own their fleet. Insureds typically will have company vehicles for sales travel, local errands, and other business-related destinations. Most vehicle rental agreements favor the company that is renting out the vehicle; such contracts are typically worded so that the outfit renting the vehicle is responsible for any damages that result from its use while it is in that party's care. Are personal vehicles ever used for company business? If so, a nonowned vehicle exposure will exist. Determine whether underlying insurance exists at acceptable limits. Metal stamping shops produce end or intermediate products for different customers; this may require the insured to transport finished products over long distances or through unfamiliar territory. What is the insured's radius of operations and frequency of travel? Determine if the insured make deliveries. Most insureds will have contracts with public carriers for the delivery of raw materials; if so, the Automobile Liability exposure will be greatly reduced. Should the insured have its own fleet of tractor-trailers, these vehicles would be covered under Automobile Physical Damage and will not be covered in this report. For more information about hazards associated with tractor-trailers, please consult the Automobile Physical Damage section of the Trucking — Long Haul report. What is the insured's practice? The underwriter should examine all contracts to determine the limits of liability. To avoid disputes, each party's obligations and responsibilities should be clearly outlined. What are the hazards faced by the insured's drivers? Metal stamping employees will travel in company vehicles and face typical road hazards, such as traffic congestion and inclement weather, which can sometimes lead to accidents. Does the insured require drivers to turn on headlights and use extra caution when driving in bad weather or during hours of darkness? It is a positive underwriting sign if the insured has a safe driver program in place. Other hazards could arise from driver error, possibly caused by fatigue, negligence, or the use of drugs or alcohol. Are the insured's drivers ever required to operate vehicles during hours of darkness when visibility is reduced and the potential for fatigue is increased? How frequently are the insured's drivers tested for drugs or alcohol? According to federal Department of Transportation (DOT) regulations, commercial motor vehicle drivers in the United States are prohibited from performing safety-sensitive functions within four hours of consuming alcohol. Does the insured comply with these regulations? For more information on these exposures, refer to the Automobile Liability section of the Trucking — Long Haul report. Today's vehicles have many electronic distractions, such as navigational, entertainment, and communications devices. These items may be factory installed (e.g., in-dash GPS units, radios, phone systems) or brought into the vehicle by the driver, but all have the potential of creating distractions that could lead to a motor vehicle accident. What types of electronic distractions are present in the insured's vehicles or any vehicles used by the insured's employees while they are engaged in company business? Some of the insured's vehicles will be equipped with a two-way communication system, such as a portable/cellular telephone that permits drivers to remain in touch with the office. Do the insured's vehicles have a two-way communication system? At any given time throughout the day, workers who are on the road could use their cell phones to talk, text message, or check their e-mail for work-related correspondence. Insureds could be held liable for damages that occur as a result of drivers using their cell phones while driving. Are driver safety courses offered that include cell phone safety tips for drivers that do a lot of driving? Does the insured provide hands-free headsets and voice-activated cell phones to all drivers? Throughout the US, individual states and the District of Columbia have enacted cell phone- and texting-while-driving restrictions. Depending on the state, some laws are restrictive (i.e., they ban cell phone use and texting while driving and require the use of hands-free devices) while others place no limits on cell phone use. Often, states' driving-while-distracted laws and regulations will restrict the use of cell phones according to the age or experience of the

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

driver (e.g., 18 or younger, student, or probationary) or the occupation of the driver (e.g., school bus operators, truck drivers). The US Department of Transportation in 2010 banned drivers from texting while operating commercial trucks. Canadian distracted-driving laws are similar to those in the United States, and depend on the Canadian province or territory. Elsewhere, distracted-driving laws are just as varied. Japan prohibits all mobile phone use while driving, including the use of hands-free devices. Between 2009 and 2010, both Australia and New Zealand enacted bans on the use of mobile phones and text messaging while driving; both currently permit the use of hands-free devices. All EU nations, with the exception of Sweden, ban handheld cell phone use while driving but permit the use of hands-free devices. Ten of the 27 EU member states specifically prohibit texting. In the UK, distracted driving laws prohibit the use of handheld mobile phones and currently permit the use of hands-free mobile devices. Some insureds prohibit their employees from using cell phones while driving entirely, making them pull off the road if they need to initiate or respond to a call. What is the insured's policy? How often do drivers go to new or unfamiliar locations? When drivers venture into unfamiliar territory, what kind of navigational assistance does the insured provide – maps or navigational assistance devices? Are any of the insured's fleet vehicles equipped with built-in or portable navigational assistance devices that can help drivers find their way in unfamiliar areas? If so, this is a positive underwriting sign. Even though these navigation assistance systems have benefits, one drawback is that they may cause drivers to become distracted while they are operating a company vehicle for business purposes, thereby making the insured liable. Whether factory installed or portable, GPS devices momentarily require the driver's attention. If the insured uses GPS devices in its company vehicles, were models selected that are designed to be minimally distracting? Units that are dash-mounted should be positioned in such a way that they do not block the vehicle operator's view of or access to any other gauges or controls. In addition, the mounting unit must be sturdy and hold the GPS steady so that the screen does not vibrate, which could make it difficult for the driver to see it. Since the most obvious source of distraction is entering route information, the insured should instruct its drivers to always do this before engaging the vehicle. Do the insured's GPS devices have screens and text that are clearly legible, as well as audio commands that are easily understood? Determine the ages, and levels of training and experience of the insured's drivers. If the insured employs truck drivers, they must hold a valid driver's license issued by the state in which they reside. All truck drivers operating vehicles that can carry 26,000 pounds (11.793 metric tons) or more must hold a commercial driver's license (CDL) from the state in which they live. Drivers who hold a Class A endorsement on their CDL may operate a tractor-trailer of any size, carrying any weight. Do the insured's drivers have the appropriate endorsements to their CDLs? Does the insured employ any drivers under the age of 25? If so, a youthful operator exposure will exist. Since the Fair Credit Reporting Act requires written permission from the driver to obtain MVRs, the insured should make obtaining this permission part of the hiring process. Is a routine vehicle maintenance program in place? Does the insured use Automotive Service Excellence (ASE)-certified mechanics to repair the insured's vehicles? Some insureds employ their own full-time mechanics, while others contract out these services. Determine the qualifications and experience of the insured's mechanics. Unless they are certified mechanics, workers should not be permitted to repair or assist in the repair of the insured's vehicles. What is the insured's practice? General Liability: Premises and Operations Most insureds will have few visitors to their premises; therefore, the General Liability: Premises and Operations exposure for metal stamping shops will be slight. Shops involved in designing pieces, however, may occasionally have clients visit the premises, especially to observe quality control procedures. Other visitors will include sales representatives; local, state, and federal inspectors; maintenance and repair crews; delivery personnel; and the employees' friends and family members. Hazards will typically be limited to slips, trips, and falls, and electric shocks, but, in situations where visitors are allowed on the production room floor, could include crushing, dismemberment, and in an unlikely event, death. What is the layout of the insured's premises? Metal stamping facilities normally are designed around a large production area in which all phases of the stamping process are carried out, although some operations house certain parts of the process in separate buildings (e.g., finishing operations). In addition to the production area, metal stamping facilities will consist of a reception area that typically is completely separated from production floors. There will be offices for executives, cubicles, or rooms where projects will be designed on computers, and where administrative and accounting functions will be handled; restrooms; cafeterias; storage facilities or yards; and shipping areas. Employee restrooms may also be made available to visitors. Determine the insured's hours of operation. Typical hours of operation are Monday through Friday, 8 a.m. to 5 p.m. Larger insureds may operate more than one shift and also run on weekends. Some operations, based on their size and amount of automated materials handling machinery, may operate around the clock. Rush jobs may require considerable overtime. What are the average and maximum numbers of daily visitors? Determine whether the insured's customers visit the premises to consult on stamping designs. If this is the case, consultations likely will occur in an office area where designs are produced on computers, so there will be no exposure to production machinery. Unless they are government inspectors, visitors should never be allowed in the production area where potentially dangerous machines are located. Crushing, dismemberment, and death are all possible should visitors come into contact with them. Typically the only visitors allowed in production areas will be government safety inspectors, who will look to ensure all production machines are properly

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

guarded and meet government standards. Many industrial factories have their production room floor walkways clearly delineated with brightly colored tape, essentially outlining a corridor along which visitors can walk. These defined footpaths are set a safe distance from workstations while allowing for safe passage. Directional arrows pointing the way to exits also can be affixed to the floors. Signs reading "Employees Only" or "Authorized Personnel Only" should be posted within the building(s) where visitors are forbidden to enter. All visitors who do enter the production floor should wear the proper personal protective equipment, such as safety glasses. How is visitor access to dangerous machinery restricted? Local, state, and federal inspectors (e.g., fire marshal, Environmental Protection Agecncy [EPA] or OSHA in the United States) will visit the premises to inspect the work environment and to assess if the insured is in compliance with applicable worker, environmental, and fire safety regulations. Are all visitors closely supervised by an experienced employee? Slips, trips, and falls present the main General Liability: Premises and Operations exposure for the office area; visitors to production areas will be exposed to slips, trips, and falls, as well as crushing, dismemberment, burns, electrical shocks, and possibly death. Good housekeeping is essential to reduce slipping and tripping hazards in all areas where nonemployees are allowed, including work areas where machinery repair is performed. What is the level of housekeeping? Floors should be swept or vacuumed daily. Spills should be cleaned up as soon as possible, and "Caution — Wet Floor" signs placed over the affected areas. What is the condition of the insured's flooring? Worn, torn, or loose floor coverings should be repaired or replaced promptly. Hallways, aisles, and reception areas should be well maintained and kept free of debris and clutter. Are electrical and telephone cords routed away from walkways? Cords that must cross walkways should be taped down and/or covered with a mat. Visitors who trip or fall in the production area may further injure themselves on scrap metal materials that may be lying about. Trash should be removed daily. Furniture in the insured's reception areas should be in good condition and repaired or replaced as needed. Who is responsible for inspecting the insured's furniture? Determine their reputations and qualifications. If there are stairs on the premises, are stairways well lit, in good condition, and equipped with sturdy handrails? Are stair treads covered with a nonskid material? If there is an elevator on site, how often is it inspected? Typically, insureds will contract out elevator maintenance. Determine the reputation and loss history of the insured's elevator maintenance contractor. Obtain current copies of certificates of operation for all elevators on the premises. Some metal fabricating and stamping facilities will have restrooms for both employees and visitors. Restrooms should be maintained regularly and adequately. Slips and falls could occur if floors are not kept clean and dry, or if wet areas are not marked indicating the floor is wet and caution should be exercised. Are the insured's restrooms easily accessible to all patrons, including senior citizens and persons with disabilities? All restrooms should be in compliance with state and federal regulations governing health, cleanliness, and access. Cleaning chemicals should be locked in a cabinet and inaccessible to visitors. For specific information on hazards found in the workshop area, see the Workers' Compensation section of this report. Depending on the operation, some metal fabricators or stamping operations will have enclosed rooms where metal pieces are spray-painted, for example — sometimes by hands, other times by automated robotic arms. Given the flammable nature of these chemicals, these rooms must be made explosive-proof to protect worker safety. For instance, a room where employees do some of the painting with pneumatic spray guns should be classified as a Class 1, Division 1 room. This means that anything that can cause a spark is forbidden from the room. Lighting fixtures need to have shields to prevent combustion from potential blowouts. Cell phones, pagers, and similar devices cannot be brought into the room — and signs should be posted outside of the room telling visitors to leave any such equipment outside. There should be floor mats in front of the room's entrance that eliminates static when walked on. What kind of electrical equipment does the insured have on the premises? Determine the number, ages, types, and conditions. Other than government inspectors, visitors will not regularly come into contact with potentially dangerous machinery. Regardless, all electrical equipment and wiring should be properly grounded and NRTL-listed. Frayed or loose wiring may cause electrical shock and should be repaired or replaced by a qualified electrician. Determine whether the insured hires a licensed electrician to install and maintain the company's electrical equipment. What are that person's levels of experience and qualifications, and how often does he or she inspect the electrical equipment? Most metal stamping firms will house inventories of metal stock in inside storage areas, although cost factors have forced some businesses (e.g., the automotive industry) to transition to a "just-in-time" model of raw material inventories. Some large insureds have outside storage areas that contain old dies, or piles or pallets of hot-rolled metal waiting to be processed. Playing on or around a metal stockpile can be dangerous because stacked metal can topple, crushing anyone who is standing below. Storage areas may be considered an attractive nuisance. Trespassers — especially children — who enter the insured's premises after hours can seriously injure themselves while playing on or around metal piles or equipment. How does the insured prevent unwanted visitors from entering the premises during off hours? Are the premises fenced? The insured should post "Danger — No Trespassing" signs along the perimeter of the property. Some large insureds or those that are captive facilities may receive their raw materials by rail, in which case a railroad sidetrack will border the insured's facility. What agreements concerning the sidetrack has the insured made with the railroad company? In many cases, the stamping shop will assume responsibility for unloading and deterring trespassing. Railroad sidetracks are an attractive nuisance and ideally should be fenced off to deter trespassers. The outdoor area of the premises should also be inspected. Sidewalks and parking lots should be in good repair and well lit. Visitor parking lots should be separate and clearly identifiable from areas where multi-ton stock is delivered to lessen any chance of accidents. Have provisions been made for the timely removal of ice and snow?

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

Product Liability and Completed Operations The Product Liability and Completed Operations exposure for metal stamping is significant because there are several factors that can compromise the quality of a stamped metal product. Poorly designed parts, manufacturing process defects, defective raw materials, shoddy stamp jobs, and/or the failure of the insured's quality control personnel to detect defective products may each contribute to a possible loss. The exposure will vary from site to site and will depend on what kinds of stamped products are produced at a particular facility. Captive stamping operations will face a reduced exposure since they usually work with established types of metals and always produce the same stamped products. In addition, defective products made by a captive shop would probably lead to claims against the parent company, rather than the shop itself. The severity of exposure for this line depends to a large extent on the ultimate use of the parts that the insured produces. The malfunction of some parts can cause serious bodily injury and/or property damage. Metal stamping operations typically produce intermediate products (e.g., parts for automobiles, electronics, furniture, machines and appliances) that will be used as components in other products, as well as specific end products (e.g., cutlery, toolboxes, license plates, trash cans, etc.). If the insured stamps small pieces that are components of larger systems assembled elsewhere, it may be difficult to substantiate a claim that an accident was caused specifically by the insured's part. However, it is possible that if the insured provides defective components to a manufacturer, any Product Liability suits that the manufacturer incurs may be transferred to the insured. What kinds of clients does the insured have, and what types of metal parts are produced? Are any parts that the insured produces considered critical components? Does the insured specialize in production for a certain industry? Large operations may produce thousands of different intermediate products used in a wide variety of manufactured items. If the insured provides components for finished products, such as automobiles or aircraft (which is common for captive operations), a Product Liability suit could be extremely costly. Even if the insured is not held liable in such a suit, sizeable defense costs may be incurred. Determine the types of end products the insured manufactures. There will be a smaller chance of claims if the insured produces the same parts routinely. Is the insured considered a "captive" shop for a larger manufacturer? The underwriter should examine all hold-harmless agreements signed between the insured and its customers. Several factors should be considered when selecting the optimum production process (or combination of processes) for a stamped product, including: the type of metal; the part size; the metallurgical structure effect inherent in the process; the part shape or complexity; the tolerances or finishes required; and the quantity to be manufactured. Determine how the insured addresses such production and quality issues when engineering die designs and implementing them into the manufacturing process. Because it will produce a faulty product every time it is used, a faulty product design can cause a severe Product Liability exposure. However, since customers normally supply the insured with a design prototype, this exposure will be relatively uncommon. Nonetheless, it is still crucial that insureds collaborate closely with their clients to ensure complete accuracy and precision when designing a part. Are hold-harmless agreements signed by clients that choose to supply their own designs? Does the insured custom design prototypes, or are the prototypes for each job ordinarily supplied by the customers? The exposure will be lower if the insured uses customers' prototypes. Assess the insured's means of testing its designs and prototypes. When the insured makes new designs, does it make several prototypes for the customer to assess and approve? All designs (whether supplied by the client or the insured) should be carefully tested and products inspected before full-scale production begins. Client inspection and approval should be sought, and recordkeeping practices should be stringent. Are pieces ever tested under normal working conditions? What is the insured's inspection process for metals obtained from a supplier? Raw metal materials that do not meet exact design specifications can generate poor quality products. Although unlikely due to the suppliers' and the insureds' rigid quality control measures, raw metal materials could be contaminated by an improper mixture of alloys or by the use of scrap metal that has not been fully analyzed. Since weak or contaminated metal can result in defective products, it is critical that the metal used for particular stamped products consists of only those elements that will provide the desired characteristics for the end product. What quality assurance measures does the insured take to analyze raw metal materials? What are the reputations and loss histories of the insured's suppliers? How long has the firm been dealing with its current suppliers? Determine if any of the insured's suppliers have ever been named as defendants in a Product Liability lawsuit. Metal stamping operations typically rely on their reputation for accuracy and quality in obtaining new business. How long has the insured been in business? What is its reputation and loss history? Does the insured have a record of Product Liability claims? In both storage and stamping areas (especially in the stamping area), it is important that no foreign materials are ever introduced to the metal. What is the level of housekeeping at the storage and stamping areas? Floors and aisles should be kept clear, and swept or vacuumed daily. Determine what experience and training are required of employees who work directly in stamping operations. When entering this field of work, most production workers (e.g., power press operators, welders, die setters, mechanics, machinists, laser operators, crane operators) are required to undergo some kind of formal on-the-job apprenticeship, which involves learning about the various stamping procedures. Generally, a high school diploma or GED will be in order to pursue even entry-level metal fabricating positions. Employees in this field may also be required to have a related one-year certificate or technical diploma from a community college or technical school. Some insureds require an associate's degree

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in metal fabricating, or additional vocational training, for higher levels of fabrication work. Certain occupations, such as engineers and metallurgists, will require advanced college degrees. National metal stamping trade associations may administer apprenticeship programs, as well as continuing education courses for this industry. Does the insured have an apprenticeship program? If so, how many apprentices are trained at one time? It is a positive underwriting sign if the insured offers financial assistance for employee education. Metal stamping requires a great degree of precision; poorly trained or inadequately qualified press operators or other production workers increase the chance of error. What is the insured's employee turnover rate? Stamping shops with employees who stay for many years generally present fewer hazards. What types of production machinery does the insured have on the premises? Determine the number, ages, types, and conditions of the equipment. To guarantee accuracy in stamping processes, machines should be inspected and serviced frequently. How often does the insured inspect machinery, and what inspection procedures are used? Determine who is responsible for inspecting and maintaining the insured's machinery. Are all repair people qualified and trained to work with the insured's machinery? Do products themselves or design specifications change often? The more adjustments or changes the insured must make to machines or settings, the greater the chance of an error. What is the insured's procedure for investigating reports of poor product performance? Has the insured ever had any such complaints? If so, ascertain what corrective actions were taken in stamping processes to ensure that all known product performance problems were corrected. How involved is the insured in designing and engineering the parts that they produce? Most shops rely on the original equipment manufacturer (OEM) to provide them with parts specifications. However, insureds that provide design services increase the potential for Product Liability claims resulting from design defects. The insured should require the customer's signed approval on all designs before stamping begins. How are employees who are involved in product design trained in the insured's design techniques? Does the insured use manual or computer-aided design (CAD) techniques? How familiar are workers with CAD? Does the insured or the client decide which metal would be best suited for stamping a particular part? Using the wrong metal with the wrong qualities could render the resulting parts useless. If the insured fails to notify a client or product assembler of a known defect in the design of a produced part, the stamping shop could be held liable. Does the insured know the performance requirements of all parts produced? Assess the scope and efficacy of the insured's quality control program. Are quality control procedures conducted in house, or is an independent laboratory used? Determine the training and experience of the insured's quality control personnel. Are there written quality control procedures that are used and understood by all employees? What equipment and techniques are used to inspect finished products? Quality control programs may be manual, computerized, or both. Insureds often use statistical process control procedures, whereby a certain number of parts are measured for tolerances during the stamping process. In-die part measuring is increasingly being employed, whereby sensors in the die assess the part as it is being stamped. Computerized inspection programs are generally more accurate than manual measurement because of the degree of precision and the number of measurements required to ensure accuracy of stamped products. For items that must conform to very high specification standards (such as parts used in the electronics industry), insureds may use optical comparators to determine product conformity. Claims may also arise from any improper product labeling and/or packaging. Determine what kind of warnings or warranties the insured issues with each of its products. Supplementary materials (e.g., safety warnings, directions for use, etc.) should be provided when necessary, but should be reviewed by legal counsel ahead of time. Does the insured have an established product recall program in place? An effective product recall program will help the insured to mitigate or minimize Product Liability claims by eliminating the potential for further damages. The program should outline a system for identifying the product's location, stopping its use, and facilitating a recall. Has the insured ever had to perform a product recall or market withdrawal? An effective recall program is essential for recovering products that could become the basis for future Product Liability claims. Environmental Impairment Liability Certain manufacturing processes (e.g., cleaning or coating operations) that accompany the metal stamping process can generate hazardous byproducts, such as contaminated wastewater or dust. During pre- or post-stamping or fabrication operations, parts are typically cleaned and degreased to remove lubricants, coolants, and metal fines. The disposal of coolants, cutting oils, cleaning solvents, and marking dyes therefore presents the major hazard for metal stamping operations in this line; full-service shops that provide final coating processes will face increased exposures. The industry generates two basic types of waste streams: metal-bearing wastewater and oil-bearing wastewater, according to the US Environmental Protection Agency (EPA). Appropriate treatment technologies (e.g., ultrafiltration, chemical emulsion breaking processes) must be used to handle such process waste safely and lawfully. While stamping operations in and of themselves generally cannot cause a severe environmental accident, their steady output of pollution yields a moderate Environmental Impairment Liability exposure. The EPA in 2008 issued a rule pertaining to the National Emission Standards for Hazardous Air Pollutants: Area Source Standards for Nine Metal Fabrication and Finishing Source Categories. These nine categories are Electrical and Electronic Equipment Finishing Operations; Fabricated Metal Products; Fabricated Plate Work; Fabricated Structural Metal Manufacturing; Heating Equipment, except Electric; Industrial Machinery and Equipment Finishing Operations; Iron and Steel Forging; Primary Metal Products Manufacturing; and Vales and Pipe Fittings. This rule establishes emission standards

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in the US for the new and existing use of dry abrasive blasting machining, dry grinding and dry polishing with machines, spray painting and other spray coating, and welding operations. For instance, dry abrasive blasting operations must be enclosed, with a filtration control device; dry grinding and polishing machinery must have their emissions captured and vented to a filtration control device, and dust in the surrounding area must be minimized. Welding operations must implement one or more of the following to minimize emissions: use welding processes with reduced fume generation capabilities; use welding process variations that can reduce fume generation rates; use welding filler metals, shielding gases, carrier gases, or other process materials that are capable of reduced welding fume generation; optimize welding process variables to reduce the amount of welding fume generated; and use a welding fume capture and control system. Facilities already in existence had to submit applicable sources to the EPA by July 25, 2011, and 120 days after the startup for new sources. These businesses and related entities must also submit annual certification and compliance reports. If domiciled in the US, is the insured in compliance with the EPA's National Emission Standards for Hazardous Air Pollutants: Area Source Standards for Nine Metal Fabrication and Finishing Source Categories? Consult the EPA's Federal Register, Volume 73, Number 142, dated July 23, 2008, for more information regarding the agency's final rule and how it might pertain to the insured. Similarly, the underwriter should consult governing bodies in the insured's country of operation if it is not located in the US. The water used in the stamping or testing process (e.g., when assessing the suitability or functionality of a part) gathers contaminants each time it comes into contact with a stamped product; this wastewater must be disposed of in an environmentally safe fashion since it could leak into the ground and contaminate the water table. Has the insured ever been cited for improper disposal of contaminated wastewater? Normally, metal stamping operations must either recycle their wastewater or treat it until all pollutants have been removed. What is the insured's practice? Wastewater should first go through an in-ground oil-water separator to collect oil in a holding tank before water is discharged into the ground or into a municipal sewer system. Determine whether the insured's municipality of operation will allow wastewater to be discharged into the ground without first going through an oil-water separator. The insured will have to apply for a special permit for this to happen. Larger amounts of wastewater may require special precautions, such as an aboveground or underground collecting tank, and disposal by a hazardous waste hauler. Does the insured have a wastewater collecting tank? Investigate the condition and construction of the tank. The tank should be inspected frequently for signs of deterioration. Is wastewater disposed of by a hazardous waste hauler, or is it done on site? If done on the premises, the underwriter should determine the number, age, type, and condition of the insured's wastewater treatment equipment. Is treated wastewater discharged into lines under the authority of a publicly owned treatment works (POTW) facility? Determine who hauls the insured's process wastewater, and assess their qualifications and experience. For more information, refer to the Environmental Impairment Liability section of the Wastewater Treatment Facilities (Nonhazardous) report. What are the types, amounts, and uses of hazardous substances utilized during the insured's manufacturing processes? While proper disposal of spent coolants can mean high administrative, handling, and landfilling expenses for an insured, recycling coolants is economically advantageous. In addition, the Hazardous and Solid Waste Amendments to the Resource Conservation and Recovery Act (RCRA) require waste generators in the US to certify that the volume and toxicity of their wastes have been reduced to the lowest degree possible. Recycling coolants may, therefore, be a legal requirement for the insured. (The reader should bear in mind that not all stamping operations will use coolants in their manufacturing processes.) Until recently, only large stamping shops could afford the space for and cost of an in-shop recycling machine to treat coolants contaminated by leaking hydraulic oils or metal chips and fines from any onsite machining processes; now, smaller shops are able to obtain smaller-scale recycling machines. A recycling machine extracts contaminants through a combination of processes, including filtering, skimming, and centrifuging. The recycled coolant is then mixed with a small amount of fresh coolant and cycled back into the machine. Used oil, recovered by the skimming process, is sold to refiners. Coolant recycling machines help to reduce the insured's generation of waste materials and, therefore, reduce the Environmental Impairment Liability exposure. Insureds that do not use coolant recycling machines often contract these services with an outside hazardous waste disposal agent. Even insureds that use a recycling machine are required to dispose of the contaminants that the machine extracts from the coolant. Metal stamping shops typically use a variety of cutting oils, cleaning solvents, and marking dyes during various phases of the stamping process. What measures does the insured take to dispose of these substances properly? Is the insured in compliance with all applicable local, state, and, in the US, EPA environmental regulations? It is a positive underwriting sign if the insured uses water-soluble oils, which are deemed less hazardous. The underwriter should determine how the insured stores these substances while awaiting pickup by hazardous waste haulers. Determine who hauls the insured's hazardous wastes and what disposal facility the insured uses. Are both the hauler and the disposal facility properly licensed, and, if domiciled in the US, do they have EPA identification numbers? How often does the waste hauler visit the insured's premises? Ascertain the average and maximum sizes of waste loads hauled. The insured must maintain chain of custody documents indefinitely. These should include all hazardous waste manifests, signed by the insured, the hauler, and the disposal facility. Such records are invaluable in defending a suit. Has the insured ever been cited and/or fined for noncompliance with hazardous substance use or disposal? Because of the hazardous waste exposure presented by most cleaning solvents, some insureds have opted to use a cleaning tank that is periodically drained and refilled by an outside contractor who takes responsibility for the disposal of the hazardous liquid. Although this transfer of responsibility should be clearly stated in the contract with the disposal firm, the courts may not relieve the insured of all liability. What criteria did the insured use in selecting the disposal firm? Are

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chain of custody documents maintained? The contractor should give the insured copies of all waste manifests and receipts from approved disposal facilities. What type of cleaning process and solvent(s) does the insured use? If the insured uses a cleaning tank, how frequently is the tank refilled? Metal stamping operations emit a variety of gaseous pollutants, such as metal dusts and volatile organic chemicals (VOCs). Does the insured measure the amount of air pollution produced at the stamping shop? Is all sampling and monitoring equipment kept in good repair and calibrated frequently? The insured should inspect and service all atmospheric sampling equipment at least annually. What kinds of stack emission controls does the insured have in place? Is the insured in compliance with state and federal regulations concerning air pollution? In the US, California, for example, enacted a law in 2010 to put limits on allowable VOCs in metalworking fluids and direct-contact lubricants at industrial facilities. Specifically, Rule 1144 of the South Coast Air Quality Management District — the air-pollution control agency for all of Orange County, and urban portions of Los Angeles, Riverside, and San Bernardino counties — established administrative and reporting rules regarding the manufacture and use of products with VOCs. The owner or operator of a metal-stamping operation or industrial facility within the district must develop and maintain a VOCs listing of all related metalworking and/or direct-contract lubricants purchased for use at the facility. The listing must contain the name and regulatory identification of the industrial facility. The VOCs listing also must contain the following information for each fluid or lubricant: the specific manufacturer's name; product number, identification, or code that uniquely identifies the VOC-containing fluid; a fluid category; and grams of VOCs per liter of material. The VOCs listing must be updated within seven calendar days from the date of receipt of a new metalworking fluid or lubricant at the facility. The plant owner must maintain that information and make it available to regulatory representatives upon request, so that the amount of fluids and lubricants used at the facility can be verified. If the facility elects to use an emissions-control system to comply with Rule 1144, the owner or operation must maintain daily records of all key system parameters — including hours of operation, temperatures, pressures, and flow rates — that are necessary to ensure control of efficiency requirements. An underwriter should investigate whether the insured's state of operation has any specific regulations regarding products containing VOCs. If so, is the insured in compliance with those regulations? Determine the scope and extent of the insured's final coatings operations; extensive coating operations will present numerous environmental hazards. These processes require a lot of capital investment, so often it is more cost effective to send parts out to custom coaters than to invest in expensive equipment. Full-service shops may offer various types of coatings, such as electrostatic, powder, or topcoat painting for finished products; for example, stampers that manufacture appliance parts will typically have porcelain-coating systems. Insureds that engage in coatings operations will face increased Environmental Liability exposures and must obtain all appropriate state and federal permits. For more information on the hazards associated with painting and finishing operations, please refer to the Environmental Impairment sections of the Electroplating Contractors and the Paint Manufacturing reports. Workers' Compensation Although metal stamping processes have become increasingly automated in recent years, workers are still exposed to a number of hazards in the work environment, the most serious being mechanical power presses and press brakes. Other hazards include die handling, use of hazardous substances, inadequate training for employees, and working around heavy machinery. Metal stamping workers are exposed to a number of possible injuries, including: back sprains and strains associated with overexertion; bodily motion injuries, such as hyperextension; burns; crushing injuries or amputations from process machinery; cuts and bruises from nonpowered hand tools; eye injuries and superficial cuts from flying particles generated during grinding operations; electrical shocks; respiratory ailments; and, however unlikely, death. Employees who work in an office environment may be susceptible to eye fatigue and cumulative trauma disorders (CTDs). Overall, the Workers' Compensation exposure for metal stamping firms will be substantial. Insureds based in the US must adhere to Occupational Safety and Health Administration (OSHA) rules and recommendations for the safety of their employees. If the insured is located outside the US, it is recommended that underwriters be familiar with the locale's applicable worker safety regulations. What are the number, ages, and levels of training and experience of the insured's employees? Fabricating and stamping work is performed in a large production facility, typically running first and second shifts. Job descriptions include metallurgists, engineers, administrative personnel, truck drivers, and a variety of process workers (e.g., drill press operators, grinders, welders, die setters, tool makers). Smaller shops may range in size from 10 to 50 workers, mid-size operations often employ up to 100 workers, and large stamping facilities may have 500 to 1,000 or more workers. Many of the workers in automated stamping shops will be maintenance and process control personnel who operate, inspect, monitor, and service the facility's machinery. What are the typical duties required of employees? In addition to production floor workers, metal stamping shops may employ a variety of other professionals, including quality control personnel, sales representatives, and truck drivers. Inadequate supervision and safety training, violations of safe operating procedures, and a stressful work environment can all contribute to worker injuries. The frequency and severity of workplace accidents can be minimized by ongoing safety education, adequate training and supervision, properly guarded and serviced machinery, and the proper use of personal protective equipment. OSHA in June 2011 cited a New York-based metal fabrication shop for 20 alleged serious violations of workplace safety standards following the injury of an employee who lost 5 fingers when his hand got

Source: Best's Underwriting Guide, Version 2017

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caught in an operating roller machine. OSHA's inspectors found several instances of unguarded moving machine parts, including rollers, belts, pulleys, and a saw blade. The inspection also identified incomplete or missing energy control procedures necessary to prevent the unintended startup of presses and other machines while employees performed maintenance on them; several electrical hazards, including ungrounded electrical circuits and cords; power cords exposed to damage and misused electrical equipment and cords; unmounted fire extinguishers; blocked exit access; and a locked exit door. Has the US-based insured ever been cited by OSHA for an unsafe workplace? It is a positive underwriting sign if the insured consults with an area or regional OSHA office or professional safety firm to discuss how workplace hazards can be controlled. Does the insured have an ongoing safety awareness program in place? Regular meetings should be held to discuss safe equipment handling and work procedures, potential hazards, and injury and illness records. Who runs the insured's safety awareness program, and what are that person's training and experience? All workers should be supervised while in the production area. What is the level of supervision in this area? What are the training and experience levels of the insured's production supervisors? How are the insured's employees trained? When entering this field of work, most production workers (e.g., power press operators, welders, die setters, mechanics, machinists, laser operators, crane operators) are required to undergo some kind of formal on-the-job apprenticeship, which involves learning about the various stamping procedures. Generally, a high school diploma or GED will be needed to pursue even entry-level metalworking positions. Employees in this field may also be required to have a related one-year certificate or technical diploma from a community college or technical school. Some insureds require an associate's degree in metal fabricating, or additional vocational training, for higher levels of fabrication work. Certain occupations, such as engineers and metallurgists, will require advanced college degrees. National metal stamping trade associations may administer apprenticeship programs, as well as continuing education courses for this industry. Due to inexperience and/or lack of thorough training, temporary or new workers pose a significant risk; it is critical that such employees receive adequate safety training, as well as proper instruction in the operation of the equipment and machines with which they work. Does the insured require all inexperienced workers to undergo a formal apprenticeship program, or are workers only provided with on-the-job training? Production workers often learn the trade while on the job and usually begin as assistants to more experienced workers. Are new workers assigned to work with more experienced ones until they have shown competency in assigned tasks? Determine the minimum training and certification that are required of the insured's production workers as well as the qualifications of those who are responsible for training new workers. Many workplace injuries could be avoided if workers' capabilities are closely matched with the job(s) they are expected to perform. How does the insured test applicants' skills and match them to appropriate jobs? Specific training is needed to operate most machines in a stamping operation. Are all employees qualified to use the machines they work on? Because of high production, start-up, and equipment costs, most captive stamping shops will operate around the clock. What are the insured's hours of operation? Smaller metal stamping shops usually will keep normal business hours, 8 a.m. to 5 p.m., Monday through Friday. Second shifts and some weekend work may be common for insureds that are trying to meet production runs. What is the layout of the insured's premises? Metal stamping facilities normally are designed around a large production area in which all phases of the stamping process are carried out, although some operations will house certain parts of the process in separate buildings (e.g., finishing operations). In addition to the production area, metal stamping facilities will consist of a reception area that typically is completely separated from production floors. There will be offices for executives, cubicles, or rooms where projects will be designed on computers, and where administrative and accounting functions will be handled; restrooms; cafeterias; storage facilities or yards; and shipping areas. Employee restrooms may also be made available to visitors. What is the overall condition of the insured's production facility? Are aisles wide enough for employees to move about freely, particularly when moving large and/or awkward pieces of metal? Floors should have a nonslip surface. Dangerous machinery and work area should be clearly marked. Many manufacturers outline dangerous work areas with reflective tape, usually yellow in color. Another method is to clearly mark individual machines as a hazard and detail the specific hazard so the employee can see it. Good housekeeping is vital to worker safety; a cluttered workplace can cause trips and falls. Moreover, employees who trip or fall may injure themselves on sharp metal scrap, or they may fall to a lower level of the facility. What is the level of housekeeping? All walkways should be clearly marked and kept clear of scrap metal, equipment, power cords, air hoses, and gas lines. Is all refuse picked up regularly, and are all tools put away when not in use? Temporary and permanent wiring and telephone cords should be kept off the floor and out of traffic areas and routed along or inside walls. Where this is not possible, cords should be covered. Spills should be immediately mopped and dried, and "Caution — Wet Floor" signs displayed over affected areas. Trash should be removed daily. Metal supplies should be stacked a safe distance from all machinery. Haphazard stacking may cause materials to shift and fall or may present a tripping hazard. If there are stairs on the premises, are stairways well lit, in good condition, and equipped with sturdy handrails? Are stair treads covered with a nonskid material? If there is an elevator on site, how often is it inspected? Typically, insureds will contract out elevator maintenance. Determine the reputation and loss history of the insured's elevator maintenance contractor. Obtain current copies of certificates of operation for all elevators on the premises. Restrooms should be maintained regularly and adequately. Slips and falls could occur if floors are not kept clean and dry, or if wet areas are not marked indicating the floor is wet and caution should be exercised. Are the insured's restrooms easily accessible to all employees? All restrooms should be in compliance with state and federal regulations governing health, cleanliness, and

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access. Cleaning chemicals should be locked in a cabinet and inaccessible when not in use. Furniture used by employees should be regularly inspected for structural integrity. Determine the levels of experience and qualifications of the person responsible for setting up and inspecting the insured's furniture. Determine the ages, types, and conditions of all electrical equipment on the premises. All electrical equipment and wiring should be NRTL-listed and properly grounded. A licensed electrician should perform all installation and servicing on the insured's electrical equipment. Determine the qualifications and experience levels of the insured's electrician and how frequently he or she inspects the insured's equipment. Are all workers in the production area required to wear appropriate personal protective equipment? Workers, especially those responsible for manual materials handling, must wear adequate foot protection, such as slip-resistant, steel-toed boots. Does the insured provide heavy-duty work gloves for all employees who perform rigorous manual labor? The US-based insured should be in compliance with OSHA standards 1910.132, General Requirements for Personal Protective Equipment, 1910.138, Hand Protection, and 1910.136, Occupational Foot Protection. Determine the number, types, conditions, and ages of all machines used in the insured's processing operations. Older machines may have inadequate machine guards and operate less precisely, thereby increasing the chance of accidents. Are machines operated by employees who are familiar with their specific operating procedures? Machinery should always be properly oiled and cutting tools properly sharpened to prevent accidents. What is the maintenance schedule for machines? Specific maintenance procedures should be designed and implemented for each piece of equipment. Machine maintenance should include both preventive and corrective action. All equipment should be inspected regularly, so minor repairs can be made to avoid major breakdowns and accidents. Test and performance data should also be analyzed. Who is responsible for the upkeep of the machinery, and what are that person's qualifications and training levels? Signs warning of all in-running nip points and trip-and-fall hazards should be posted prominently throughout the production area. Back injuries stemming from manual materials-handling operations, such as moving raw material into presses and dies, may be common. Workers will typically move raw and finished materials mechanically (i.e., via crane, conveyor, or forklift), although many procedures (such as die handling) may require workers to move heavy objects across the facility. Dies can range significantly in size and weight, and workers may try to move extremely heavy dies manually instead of utilizing a mechanical die lift. Does the insured instruct all workers in proper lifting techniques? Are they provided with materials-handling aids and encouraged to obtain help when moving extremely heavy objects? Are die weights clearly marked? Insureds should set limits on the amount of die weight a worker can manually carry. Is the US-based insured in compliance with OSHA standard 1910.176, Handling Materials — General? Workers will use cranes to move raw materials from storage areas to production areas, as well as to move items (primarily dies) around the production line. What are the ages, types, and conditions of the insured's cranes? What are the levels of training and experience of the crane operators? Only qualified personnel should be permitted to operate them. Are all crane operators aware of the correct hand signals used during a moving operation? Loads should never be carried over where other individuals might be working. What is the insured's practice concerning safe crane operation and keeping the area under the crane's route clear of people? The crane's maximum load capacity should be clearly marked on the machine. Are crane operators instructed never to exceed a crane's maximum load capacity? Do all cranes have a self-setting brake on the motor shaft or other part of the gear train? Cranes must be visually inspected for damage and wear before each use. Monthly inspections by qualified service personnel must also be performed. Is the US-based insured in compliance with OSHA standards 1910.179, Overhead and Gantry Cranes and 1910.184, Slings? Another significant exposure involves the handling of dies, some of which can weigh hundreds or even thousands of pounds. During the process of loading heavy dies to a power press, chains or cables may be used when an overhead crane, specialized forklift truck, or die-setting truck lifts the die. If securing devices are improperly attached or inadequate to bear the die's weight, such devices could break and cause it to fall or slide off the lift truck. It is important that cables and chains are regularly checked for signs of wear and tear and that they have adequate load-bearing capacity for the amount of weight being moved. Materials handlers must also be thoroughly trained in the proper methods of securing heavy dies, transferring them to the presses, and unloading the dies into the presses. Also, accidents could occur if dies are not stored properly. Sturdy storage racks are necessary to hold heavy dies; if inadequate, racks could collapse and injure nearby workers. Are storage racks regularly checked for any signs of stress, such as bowing or listing? For safety purposes, extremely heavy dies should be stored on the floor. Metal stamping shops will sometimes use conveyor belts to transfer either raw materials, finished products, or both, during the stamping process. What is the insured's policy concerning conveyor use? Employees must not ride on or climb over or under a moving conveyor belt. Are all conveyors equipped with guards to prevent contact with the nip points of the belts, rollers, or trains? Are emergency shutdown switches placed along the conveyor lines? All conveyors on the premises should be regularly inspected and serviced. Metal stamping operations involve the use of a number of manually controlled or automated machines and equipment, all of which could expose workers to amputations, fractures, and crushing injuries from being caught in, under, or between moving machine parts. Most machine-related injuries are caused by missing or disabled guards, inadequate safety training, poor maintenance, or failure to lock and tag out machinery while making repairs. Production machinery can be quite expensive, and this can result in metalworking outfits purchasing used equipment — some of which might be missing crucial machine guards or other parts. Determine whether the production machinery was bought new or used, and if any machinery is used, what steps were taken — including ascertaining the training and experience levels of the professional

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who inspected the equipment — to ensure its proper functionality. Is the US-based insured in compliance with OSHA standards 1910.147, The Control of Hazardous Energy (Lockout/Tagout ) and 1910.212, General Requirements for Machine Guarding? Accidents with production machinery (e.g., press brakes, lathes, dies, power presses, grinders) could occur in any number of ways, such as the inadvertent energization of a press or lathe or the accidental dropping of the dies that are being moved by crane. Depending on the operation, some metal fabricators or stamping operations will have enclosed rooms where metal pieces are spray-painted, for example — sometimes by hands, other times by automated robotic arms. Given the flammable nature of these chemicals, these rooms must be made explosive-proof to protect worker safety. For instance, a room where employees do some of the painting with pneumatic spray guns should be classified as a Class 1, Division 1 room. This means that anything that can cause a spark is forbidden from the room. Lighting fixtures need to have shields to prevent combustion from potential blowouts. Cell phones cannot be brought into the room — and signs posted outside of the room telling visitors to leave any such equipment outside. There should be floor mats in front of the room's entrance that eliminates static when walked on. These rooms should also have three-hour firewalls. Do the US-based insured's lacquering rooms meet OSHA standard, 1910.307 — Hazardous (Classified) Locations? Hazards relating to these types of rooms will be further discussed in the Fire and E.C. Property section of this report. This industry will use mechanical power presses (some insureds also employ the use of hydraulic and/or pneumatic presses), which are used to punch out metal parts for a variety of intermediate and end uses. Injuries (mostly amputations) from the punching action of the press can be prevented if workers are properly trained in equipment operation, the machines are properly maintained and regularly inspected, and guards are installed and maintained. Manually operated presses have two common modes of machine initiation: foot controls and two-hand control buttons. With foot controls, a worker activates the press by depressing the foot pedal, leaving the hands free during the press' cycling. According to the US Bureau of Labor Statistics, statistics indicate that foot-controlled power presses are associated with a higher number of occupational injuries. Studies show that with foot-controlled presses, there is a critical cycling rate above which the frequency of inadvertent actuation errors increase dramatically as the press cycling rate increases. Jobs on foot-controlled presses must be evaluated to identify their critical cycling rate. Since press operators performing repetitive tasks at operational speeds in excess of a critical cycling rate gradually begin to lose effective control over their foot movements, steps must be taken to reduce the hazards of inadvertent energization due to exceeding that critical cycling rate. Has the insured assessed critical cycling rates on all foot-controlled power presses? Due to the hazardous nature of foot-controlled presses, they are no longer commonly manufactured. However, such types of presses may still be found in stamping shops, since presses are durable and costly. It is a negative underwriting sign if the insured uses primarily foot-controlled presses. With two-hand control buttons, the worker manually positions the workpiece in the press and then uses both hands to activate the control buttons. The buttons are sometimes placed slightly above and on opposite sides of the machine's opening, meaning the worker will have to reach upward and outward to operate the machine, thereby ensuring the worker's hands will not be near dangerous moving parts. The safety design of two-hand controls can be defeated if press operators are able to place their hands into the point of operation after the press cycle has been initiated; this type of movement is commonly called the "after-reach hazard." Physical location and orientation (e.g., control buttons located too close to the press dies), as well as the operator's hand speed and the stopping time of the press, all significantly affect the operator's ability to "after-reach." Are strict safety procedures followed, regardless of the type of press activation? Workers face the greatest danger at the point of operation where metal stock is inserted, held in the machine, and withdrawn upon completion. Often, accidents occur because the worker reaches around guards (or guards have been removed) to remove a piece of scrap metal, and the press is inadvertently energized. Are warning signs posted on machines to alert employees of all nip points? Workers are exposed to limb or digit crushing, laceration, or dismemberment when operating or servicing power presses and related machinery. Safeguards must be in place to prevent hands, arms, or any other part of a worker's body from making any contact with hazardous moving parts. A variety of safety mechanisms (such as presence-sensing devices) are available. Such common technologies include a light curtain — an invisible barrier that blankets the entrance leading to the hazardous moving part. Should a hand or other body part somehow penetrate the light curtain, the machine instantly stops. Other devices restrain or withdraw the operator's hands from the danger area during operation by requiring him or her to use both hands on the machine's controls or by providing a barrier that is synchronized with its operating cycle. Safeguards must be: secure so that workers cannot easily remove or tamper with them; made of durable material to hold up under normal use; and designed to protect against falling objects, which could land in the machine and then fly out at workers. In addition, safeguards must not create new hazards (e.g., jagged edges, shear points) or interference with normal machine operation. Presses should be designed to allow for effective machine lubrication without the need to remove any safeguards. Also, full revolution mechanical power presses cannot normally be safeguarded during die-setting operations; other safeguarding methods, such as lockout/tagout procedures or using specific devices, must be used instead. In addition to being locked out, a full revolution power press should be barred with a turnover bar, de-energized, and the flywheel brought to a stop. It is important for underwriters to note that in Europe, a manufacturer of stamping and fabricating machinery must outfit each machine with safeguards; however, in the US, it is the machine's buyer that must put the appropriate safeguards on the machinery. Are pedals that control press operation guarded to prevent accidental tripping of the press by falling objects or inadvertent depression of the pedal by workers? Safety props or blocks should be used to block the descent of the ram

Source: Best's Underwriting Guide, Version 2017

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during die setting or maintenance work. All V-belts, flywheels, motor pulleys, and gears should be guarded, according to ANSI Safety Standards for Mechanical Power Transmission Apparatus. Are workpieces properly secured in a vise or clamp so they are not thrown from the machine, particularly from the table of planing machines? Thorough employee training in the safe operation of power presses is critical. What kind of training is required for the insured's power press operators? Do mechanical press operators wear the appropriate personal protective equipment, such as safety glasses, safety shoes, gloves, and hearing protection? Additionally, proper and regular power press inspection and maintenance are necessary for a safe work environment. Presses should be inspected weekly to ensure the proper function of the clutch/brake mechanism, anti-repeat feature, and single stroke mechanism. Also, power press pull-out devices or restraints should be checked for proper adjustment at the beginning of each shift, following a new die setup, and whenever new press operators take over. Insureds must have written programs outlining procedures for the inspection, operation, and maintenance of mechanical power presses, as well the training of press operators. Is the US-based insured in compliance with OSHA standard 1910.217, Mechanical Power Presses? Metal stamping operations in the US are required by law to report any power press injuries that occur on their premises. Assess the recordkeeping procedures used by the insured to track any power press injuries. All production machinery operators, regardless of skill level, should be required to remove all jewelry (including watches, bracelets, and wedding rings) before working, tie their hair back and/or wear a hairnet or cap, and should be instructed not to wear loose clothing, and to securely button long sleeves or wear short-sleeved shirts. What is the insured's practice? If the insured has grinding operations on site, workers may sustain eye and/or face injuries caused by airborne particles. Does the insured have grinding operations on site? Workers in metal fabrication shops will typically use handheld grinders, which do not pose as much hazard as large table grinders. While a fabricated workpiece is undergoing grinding or some other finishing operation, employees may be sprayed by metal fragments and dust. Are employees instructed to wear safety goggles, which, in the US, should be approved by NIOSH, when performing duties in which airborne particles may be generated? The US-based insured should be in compliance with OSHA standard 1910.133, Eye and Face Protection. Such abrasive operations will also introduce airborne particles of metal dust to the entire production area if strict safety precautions are not followed. Are all grinding operations carried out in an isolated, enclosed space? Grinding machine wheels may burst and cause very serious, even fatal, injuries. Proper care should be taken in their use and maintenance. Proper grinding surfaces and wheel balance are important for the safe operation of grinding machines. Whenever possible, hinged, transparent face guards should be mounted over the exposed wheel, above the open guard area. Are grinding wheels checked for balance and cracks before being mounted? Are the wheels mounted correctly? Before using a grinder, the operator should make sure that all guards are adjusted and securely in place. Pedestal grinders should be securely anchored to the floor and bench grinders should be securely mounted to a bench. Certain resin-bonded wheels may contain fillers, which could create a dangerous dust. Because of the numerous hazards associated with grinding operations, the insured should have written safety procedures regarding the proper use of grinding machines. Some stamp shops conduct niche operations, such as powdered metal stamping, that also may generate metal dusts; if toxic metals are used, such dust may harm any workers who inhale it. The extent of the exposure will be determined by the type and amount of dusts and the specific hazards of each. What types of metals does the insured work with? The insured may use nickel and its alloys, steel, cast iron, aluminum, and/or brass. How much dust is generated? All finishing stations should be equipped with sufficient ventilation to remove metal dust. Does the insured have a general or localized system? How frequently are the filters changed? What type of dust collection system does the insured use? Vacuum dust collectors can be fitted to the machines at the point of operation. The US-based insured should not exceed the permissible exposure levels as determined by OSHA. Does the insured have an air conditioning system in its process areas? If so, how is use of the system controlled? Air conditioning systems may interfere with the general ventilation systems, and metal dusts and toxic fumes might not be removed from the work area. Some stamping shops have elevated work platforms from which, if proper precautions are not taken, falls could result. What precautions has the insured taken to protect employees who must work on elevated surfaces? Keeping all walking and working surfaces dry and free of debris and installing handrails around all catwalks, elevated platforms, and stairways will help minimize this exposure. Is the US-based insured in compliance with OSHA regulation 1910.22, General Requirements for Walking/Working Surfaces? Although rare, some insureds will manufacture batteries or their parts, which have metal stock that contains lead or lead alloys. Workers may have to contend with dangerous amounts of airborne lead dust and fumes. Repeated, prolonged contact with lead can cause lead poisoning. Does the insured handle any lead or lead alloys? Are employees trained to spot the symptoms of lead poisoning, such as fatigue, pallor, and abdominal pain? Is the US-based insured in compliance with OSHA standard 1910.1025, Lead? Insureds may have some types of machinery and equipment that have confined spaces. Working in such spaces can be extremely hazardous. Does the insured inform workers of the hazards associated with working in confined spaces and provide adequate training in safety procedures? For insureds domiciled in the US, all OSHA standards must be followed for work in confined spaces, especially concerning the use of respiratory equipment, confined space attendants, communication equipment, and rescue personnel. Does the US-based insured comply with OSHA standard 1910.146, Permit-Required Confined Spaces? What are the ages, types, and conditions of the respirators issued to workers who are responsible for repairing machinery or equipment within confined spaces? Does the insured have any work areas that require confined

Source: Best's Underwriting Guide, Version 2017

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space permits? For additional information regarding the hazards of confined space entry and precautions that should be taken, see the Workers' Compensation section of the Grain Elevator Operations report. What type of coating process (e.g., lacquering, wet paint, powder coating, electro-coating, and plating) does the insured perform on the premises? Insureds that perform various coating processes on the premises will face greater a Workers' Compensation exposure due to the flammability of some of the substances used in these operations. These processes require a great deal of capital investment, so often it is more cost effective to send parts out to custom coaters than to invest in expensive equipment. What is the insured's practice? Metal stamping workers are exposed to a number of respiratory hazards from the various harmful dusts, fumes, and vapors present in the workplace. What are the types and quantities of any hazardous substances present on the insured's premises? Insureds should follow manufacturers' instructions for using, storing, and handling hazardous substances. A number of hazardous chemicals (e.g., acids, cutting oils, and solvents, such as benzene, toluene, and xylene) are used in the stamping process; all of these substances are harmful if inhaled or swallowed. Employees who handle such chemicals should have specific training in their use. Any workplace where these substances are present must be well ventilated. If necessary, is proper respiratory protection provided for employees who work with these substances? The US-based insured should comply with OSHA standards 1910.134, Respiratory Protection, and 1910.94, Ventilation? What is management's attitude toward worker safety? What general provisions have been made? Material safety data sheets (MSDSs) should be provided for all hazardous substances in the workplace. Does the insured have an effective, written hazards communication program? Does the insured, if based in the US, comply with OSHA standard 1910.1200, Hazard Communication? The insured should encourage workers to practice good hygiene, since hazardous substances could be inadvertently ingested; eating, drinking, applying cosmetics, and smoking, therefore, should not be allowed in the shop area. Employees should be required to wash their hands before leaving the work area, and especially before eating. Has the insured posted signs that indicate such rules? Emergency eyewash stations should be provided for workers handling hazardous chemicals; however, employees should be instructed not to attempt to wash metal particles from the eye. Instead, professional medical help should be sought immediately. Some hazardous substances, such as solvents, can also be skin irritants. Are employees encouraged to wear gloves and/or barrier creams when working with solvents? Does the insured encourage employees to apply refatting creams to their hands after handling solvents? All hazardous substances should be properly labeled and stored according to EPA and OSHA regulations in the United States. Are bulk containers kept outside of the workplace and needed amounts of chemicals transferred into smaller, manageable containers for actual use? All drums and canisters holding assorted hazardous chemicals should be clearly labeled to include the manufacturer's name, the product/chemical's name, an emergency phone number, a list of hazards related to the contained substance, and the bodily organs that could be affected by the contained substance. The US-based insured should be in compliance with OSHA standard 1910.119, Process Safety Management of Highly Hazardous Chemicals. In some shops, cutting fluids are used in tool and die-making equipment, such as mills, lathes, and grinders, to clear away metal chips from processing surfaces. When the fluids are introduced to hot, rotating parts, however, an oil mist is sometimes created. Oils with anti-mist additives should be used. Are adequate splashguards provided to catch cutting oils thrown out from operations? Cutting oils are toxic if swallowed or inhaled, and can damage the eyes if contact is made. Cutting oils can also irritate the skin as well as cause oil acne, dermatitis, and squamous cell cancer. The insured should be aware that particles may be suspended in the cutting fluids and can have an abrasive action on the skin. Are workers required to wear appropriate personal protective equipment when working with cutting oils? This includes protective gloves, eye goggles, face shields, and filter or respirator masks. The underwriter should determine what type of cutting oils the insured uses and their hazards. Workers can also slip and fall on excess cutting oils that spill on the floor. How often does the insured clean areas around machinery to remove excess cutting oils that may cause slips? Anti-slip mats should be used to reduce this exposure. What types of coolants are used in the insured's metal cutting process? Coolants are usually flooded over the cutting tool through a flexible tube and nozzle. Does any of the coolant ever escape and spray at workers? Proper machine guards should be used to limit this exposure. Determine if the insured performs any kind of metal cleaning procedures. Some insureds perform metal finishing operations or prepare workpieces for finishing elsewhere. Cleaning metals in acid or alkali baths prior to finishing poses a respiratory hazard. Pickling and bright dip operations use different types of baths, depending on the type of metal being cleaned. What kinds of cleaning solutions does the insured use? Do employees wear personal protective equipment when working with such baths? Noise levels in metal stamping operations will often be excessive; workers who do not wear proper hearing protection devices could suffer permanent hearing loss. Workers exposed to a time-weighed average (TWA) of 85 dB of noise must be provided with hearing protection, which, in the US, should be NIOSH approved, if they request it. OSHA mandates that insureds must provide and require employees to wear such hearing protection (e.g., earplugs or earmuffs) when noise levels reach or exceed a TWA of 90 dB. What kind of hearing protection equipment does the insured issue to workers? Annual audiometric examinations must be performed on all production workers. In addition to causing hearing damage, the high noise level also will make verbal communications between workers difficult. This may hinder a worker from receiving instructions, warning signals, or emergency commands. Is there a means present for workers to receive visual warnings and instructions in case of an emergency? Has the insured provided workers with noise attenuating hearing protection devices that block dangerous background noise but allow for verbal communication? Has the insured taken any measures to reduce

Source: Best's Underwriting Guide, Version 2017

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noise created in its production areas? The US-based insured should be in compliance with OSHA standard 1910.25, Occupational Noise Exposure. Workers who operate hand-held power grinders and other pneumatic tools may experience excessive hand-arm vibration, which can result in Raynaud's phenomenon, a disabling condition that causes blanching, numbness, and loss of muscular control in the fingers. Are workers who may be exposed to excessive hand-arm vibration put on a rotating work schedule? Are they provided with tools that have ergonomic grips? Workers should be trained in the proper operating procedures for smaller power tools and welding equipment. All tools should be inspected prior to use and must be properly grounded, double-insulated, and NRTL-listed. Manufacturers' warning labels and safe operating procedures should be observed. Does the US-based insured comply with OSHA standard 1910.242, Hand and Portable Powered Tools and Equipment — General Requirements? Does the insured conduct any welding operations on the premises? Welding can cause injuries ranging from burns to retinal damage. Some types of welding, such as mig welding of galvanized sheet metal parts, generate hazardous smoke and gases. Are such operations conducted in a controlled booth or with the aid of air evacuation devices? The US-based insured should be in compliance with OSHA standard 1910.252, Welding, Cutting, and Brazing. For a complete discussion of relevant exposures and their controls, see the Workers' Compensation section of the Welding, Brazing, and Cutting report. Forklift use will be common at stamping shops, since a variety of materials will be moved around the production area. Improper use of these vehicles could result in the operator or other workers being injured by toppling inventory or the vehicle overturning. Determine the number, ages, and conditions of all forklifts on the premises. Is the rated load capacity clearly marked on all forklifts? Are employees instructed not to exceed the rated capacity of any forklift? All forklifts should be equipped with overhead protection, such as a roll cage. Safe operating procedures concerning forklifts must be strictly enforced. Are forklifts equipped with motion and backup alarms? Employees should be instructed to stay clear of areas where forklifts are operating. Are clearly marked traffic aisles laid out for forklifts? Thorough training in the safe operation of forklifts is essential to minimize injuries. Forklift operators must be trained to inspect, drive, load, park, and refuel their vehicles properly. Prior to operation, do drivers use a written checklist to assess the condition of their vehicles, including gauges, warning lights, horns, motion alarms, forks, fork retainer pins, locks, tire pressure, and steering and brake functions? What are the training and experience levels of the insured's forklift operators? What types of forklifts does the insured use? If gasoline or propane forklifts are used, proper ventilation is required. Is refueling of forklifts conducted outdoors? Because explosive gases may escape from a forklift battery during recharging, this procedure should take place outdoors and away from ignition sources. When forklifts are unattended, are control levers placed in neutral, emergency brakes set, forks lowered, and power cut? If the lift is parked on an incline, chocks must be placed in front of or behind wheels to prevent rolling. Most insureds have a loading dock on the premises for receiving raw materials and for distributing finished products. Employees could be hit by trucks during materials loading/unloading operations. Employees working around delivery vehicles should be outfitted with reflective, blaze orange vests, which, in the US, should be approved by NIOSH, to increase their visibility to truck drivers. Are all delivery trucks chocked during loading and unloading to prevent them from rolling? A safe, well-organized dock will effectively reduce worker injuries. The dock's traffic flow, including the arrival and departure of trucks, forklift operations, manual materials-handling equipment, and pedestrian traffic, should be closely regulated. Traffic lanes for both pedestrians and vehicles should be clearly marked. Good communication, both verbal and with signage, is also essential. Are speed limit and warning signs (e.g., "Sound Horn" and "Proceed with Caution") posted throughout the area? A loading dock may also have blind corners that can contribute to accidents. Are convex mirrors installed at corners and at the beginnings of aisles? Because many positions involve manual labor tasks, it is recommended that pre-placement physicals be given before job assignments are made. Some job-related injuries, such as lower back injuries, repetitive (cumulative) trauma disorders, and chronic foot and leg problems, can be avoided by proper ergonomic design of workstations. How are workstations arranged? The work height should be set so that individuals can maintain maximum comfort levels while performing their assigned tasks. Working with elbows and/or arms raised puts a strain on arms or shoulder muscles. Both workstations and tasks should be engineered to avoid awkward bending, twisting or reaching motions. Foot and leg problems can be problematic among machine operators, since venous pooling can occur when workers stand on hard surfaces for long periods of time and cannot flex their feet or lower legs. Problems with legs and feet can be alleviated with anti-fatigue mats (i.e., open-link rubber mats), that allow leg muscles to flex, or by having workers wear special shoe inserts. What is the level of lighting in the shop? Light should be sufficient to enable machine operators to work without eyestrain. Good lighting without glare is important, particularly when close work is required. Office workers may be subject to cumulative trauma disorders (CTDs), such as carpal tunnel syndrome, resulting from extensive work on computers. Additionally, employees working with computer monitors may experience eye fatigue. It is recommended that they look away from the screen frequently to focus on distant objects and take a 15-minute break every 3 hours. Employers should follow ANSI/HFES standard 100-2007, which provides ergonomic guidelines, including design requirements, for visual displays, keyboards, and workstations. Are all of the insured's workstations ergonomically designed? Employees who drive while on company time could be in danger of a possible accident. For more information, please consult the Automobile Liability section of this classification.

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Is at least one person per shift trained in first aid and CPR? Emergency medical supplies, along with the telephone numbers of emergency care, should be readily accessible throughout the premises. Is the US-based insured in compliance with OSHA standard 1910.151, Medical Services and First Aid? Crime The metal stamping industry is typically not a special target for crime; therefore, stamping shops will have a minimal Crime exposure. There will be limited cash on the premises since most insureds will bill their customers and be paid by check or credit card. Insureds may have an employee dishonesty exposure from the theft of hand-held and power tools, or embezzlement. Theft of any valuable raw or finished materials by outside parties will be covered under an all-risk policy; refer to the Fire and E.C.: Property section of this article for more information. What are the average and maximum amounts of cash on the premises daily? A small amount of petty cash may be on hand to cover incidental job expenses, but most major purchases and services will be paid for by company check or by credit card. What forms of payment are accepted by the insured? Cash, checks, and credit card receipts should be kept in a torch-, tool-, and explosion-resistant safe until they are deposited. Are checks marked "For Deposit Only" immediately upon receipt? How often are bank deposits made? If possible, the insured should make deposits at staggered times, using different routes to avoid suggesting a pattern. Who carries out the insured's check disbursement and bank statement reconciliation functions? Different people should handle these functions if possible. Are accounting functions performed by more than one employee? It is a positive underwriting sign if the insured makes periodic, unannounced audits. Metal stamping shops will face the possibility of employees pilfering tools and other items found at the production facility. Small amounts of materials and equipment may be taken from the facility each day without being noticed, even under close supervision. While theft of tools or other materials may occur, the individual value of the items taken will usually be low. As a loss control measure, it is recommended that the insured have identification numbers permanently etched onto all of its tools. Are such items stored in a secure area when not in use? Most of the expensive equipment at the production facility will typically be too large and heavy to be carried off easily. Collusion and fraud between materials suppliers and employees are possible. Although unlikely, employees may accept a lower quality or quantity of metal stock than was specified in the contract from a supplier in exchange for monetary remuneration. Employees may also collude with third parties on theft of finished products, either in transit or at other points along distribution lines. What kind of inventory control system does the insured have in place? Announced and unannounced inventory audits should be conducted on a regular basis. Does the insured check all pre-employment references? Adequate employee supervision may also help reduce the employee dishonesty exposure. What security measures have been taken to protect the premises? All production, office, garage, and storage area doors should be equipped with double-cylinder, deadbolt locks. Windows should be equipped with tamperproof locks. Does the insured provide its employees a key card or badge that allows them to enter areas of the plant not accessible to the public? These badges allow for insureds to monitor employee movements on the premises. Similarly, high-definition, closed-circuit security cameras can be trained on all doorways and parking lots to account for who is leaving and entering the premises. What is the insured's practice? Has any type of alarm system been installed on the premises? If so, it should be connected to a central-station alarm monitoring facility. Are the premises surrounded by perimeter fencing and posted with "No Trespassing" signs? This may not be feasible for many insureds. Determine the location and response time of the nearest police department. Fire and E.C.: Property Metal stamping shops will have a variety of flammable liquids (e.g., fuels, coatings, cleaning solvents) used in stamping processes stored on the premises. Possible ignition sources include sparking or excess heat generated by processing equipment, welding operations, and faulty wiring, as well as smoking in the workshop. According to the Fabricators and Manufacturers Association International (FMA), fire is a major contributor to losses in the metal fabricating industry. Often, when a fire does occur, it is so severe (due to large volumes of flammable substances on site, as well as fire incidents that occur after work hours) that entire buildings are lost. The fire load will consist of metal shavings, flammable liquids, oily rags, corrugated storage containers, packaging material, office furniture, paper, trash, and computers. Overall, the Fire and E.C.: Property exposure for metal stamping operations will be moderate. What are the ages, types, conditions, and layouts of the insured's premises? Does the insured own or rent the premises? A metal stamping shop may be freestanding or located in a multi-occupancy building; some facilities can be quite large, having tens of thousands of square feet of production area. The layout of a metal stamping operation is centered around a large production area, which may be subdivided into smaller rooms where different phases of the stamping process occur. In addition to production areas (e.g., tool rooms, press rooms, assembly areas), the layout will include loading docks; a reception area; possibly a cafeteria or break room; administrative offices; meeting and/or spec rooms; tool and die shops;

Source: Best's Underwriting Guide, Version 2017

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engineering offices; quality control labs; and restrooms. Most metal stamping operations will also have exterior facilities that include warehouses, storage yards, and garages. The yard may or may not be a covered facility, but it is usually walled or fenced in. The underwriter should determine any hazards posed by adjacent occupancies. Does the insured have firewalls that extend to the ceiling separating it from other occupancies? Because of the amount of large machinery operated in a metal stamping shop, the insured will have a significant electrical load. What are the ages, types, and conditions of the insured's wiring? Some metal stamping shops are located in older structures with electrical systems that may be outmoded or incapable of handling the insured's electrical requirements. Has the insured's electrical system been upgraded to handle current electrical requirements? All wiring should be inspected periodically by a licensed electrician for damage and fraying. Wiring should also be inspected for worn or torn insulation coverings, which can occur from overloading, vibration, moisture, corrosion, heat, or cold. Sparks from defective or improperly installed wiring or overloaded circuits could ignite nearby flammable and combustible materials. Is the insured in compliance with NFPA 70, National Electrical Code, and NFPA 70B, Electrical Equipment Maintenance, which provide wiring guidelines and preventive maintenance suggestions? A qualified electrician should inspect, test, and maintain the stamping shop's electrical distribution system (including monitoring and cleaning of electrical distribution panels) on a regular basis. Malfunctioning electrical equipment and machinery pose a significant ignition source for metal stamping shops. According to the FMA, fires involving processing equipment, such as power presses, vapor degreasers, laser cutters, water cutters, coatings facilities, dust collection systems, and air compressor/cooling systems, are the most common. What are the ages, types, and conditions of the insured's electrical equipment and machinery? Underwriters should carefully assess how processing equipment is used, maintained, and protected, since these issues directly relate to causes of fire in the metal stamping industry. All electrical machinery should be NRTL-listed, properly grounded, and double insulated. Is all machinery properly installed, inspected, and serviced by a qualified professional technician? Preventative maintenance programs should be in place for all equipment and machinery to help reduce fire hazards; such programs should be written and scheduled accordingly. Insureds should evaluate each piece of machinery in the shop for its fire hazards and the appropriate controls that should be in place. Hot work, such as grinding, welding, and torch-cutting operations, is common in this type of industry, so proper safety precautions should be taken. How are all welding areas designed? Are welding areas and any torch holders constructed of or covered with fire-resistive materials? Welding areas should be separate from other stamping operations, preferably by firewalls and doors. Oxygen and acetylene tanks should not be stored near each other. Are all flammable or combustible materials (e.g., solvents, fuels, oils, dusts, lint) removed from work areas where grinding, welding, or cutting equipment is used? Managers should examine these areas for potentially flammable materials before approving the use of any equipment with open flames. Does the insured employ the use of hot work permits, which provide a safety checklist for employees who are involved in any kind of hot work activities? Consult the Fire and E.C. section of the Welding, Brazing, and Cutting  report for more details. Fires that erupt after business hours typically generate the most devastating losses. Heat- or spark-producing machinery that has been left on overnight could cause severe fires. The insured should have plant-closing procedures that include a final fire check and shut down of all heat- or spark-producing machinery. Does the insured have a formal facility and equipment shutdown check in place? Some metal stamping operations are automated and therefore unattended. Additional loss control measures for such processes include testing safety controls regularly; performing such operations in areas that are separated by firewalls from other production areas; and using automatic fire protection systems. Does the insured have any processing operations that are unattended? What kinds of fire loss control measures are used for such operations? Smoking is another possible ignition source, and it should be forbidden on the premises given the amounts of flammable substances contained within. If smoking is permitted on site, is it restricted to certain designated areas? "No Smoking" signs should be displayed wherever smoking is prohibited, particularly in locations where fuel and/or other flammable liquids are stored or dispensed. Where smoking is allowed, have self-closing, fire-resistant receptacles been provided? What are the average and maximum values exposed to loss? Depending on the size of the operation, some insureds have large quantities of raw and finished metal materials on site. In the event of a fire, whether raw materials are salvageable will depend on the metal. More expensive (i.e., exotic) metals may mean greater dollar losses. How large is the insured's inventory of raw materials? What are the average and maximum numbers and values of finished pieces stored on the premises? Most pieces will be commissioned and, therefore, shops will usually maintain only a small inventory; captive shops, however, may keep large inventories on hand to supply the parent facility. Current "just-in-time" delivery requirements of many customers may also help keep inventory limited to the work in progress. Finished pieces will be difficult to salvage. The underwriter should also consider the amount and value of the equipment used, particularly the insured's inventory of dies. Metal stamping shops will have a variety of costly equipment and machinery, some valued in the hundreds of thousands of dollars; cumulative inventory values could be worth millions of dollars. Replacement Cost coverage should be considered. Determine the insured's fire load. It will include metal shavings, flammable liquids (e.g., solvents, cutting oils), oily rags, fuels, corrugated storage containers, plastic packaging, office furniture, papers, and trash. It should be noted that some

Source: Best's Underwriting Guide, Version 2017

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Best's Underwriting Guide

manufacturers might use wooden pallets in storage areas. Wooden pallets are very flammable and need to be stored properly — stacked on top of one another to a maximum of 8 to 10 feet, with 8 feet of separation between stacks. Pallets stacked too high toward the ceiling could block water from the fire suppression system, and prevent effective firefighting. Certain metal fabricating processes, such as grinding, buffing, or deburring operations, can produce large amounts of metal dust which may burn or ignite spontaneously and may explode when suspended in the air. The explosibility of metal dusts, however, varies with the type of metal. Sparks from grinding operations can ignite dust deposits in ducts or dust collectors; aluminum, a common stamped metal, is easily ignited in its dust form, as is titanium. The underwriter may refer to informational charts, developed by the US Bureau of Mines, for an indication of the relative explosibility of various metal powders. Similar information, including specific instructions on collecting, handling, and disposing of dusts, should be available to all workers. Proper dust ventilation and collection will help reduce the fire hazard from metal dusts. Refer to NFPA 91, Blower and Exhaust Systems for Dust, Stock and Vapor Removal or Conveying, for relevant safety requirements. Equipping individual machines with dust collection devices is recommended. It is a positive underwriting sign if the insured's dust collection devices are equipped with spark detection and suppression technology. This device, if a spark is detected, will halt the dust collection and spray an extinguishing agent into the affected areas. It will also sound an alarm to alert the employees that there is a problem. What is the insured's practice? The ventilation system itself and any hand vacuuming equipment used by employees should be engineered so that it does not produce airborne dust that reaches hazardous concentrations in ducts or hoses. The underwriter should be aware that some types of metal dust require special dust collection systems designed with particular properties of the metal in mind. Aluminum dust, for example, should not be collected with fabric or electrostatic collectors. What kinds of metals does the insured use, and how much dust is generated? Determine what kind of dust collection system the insured uses and who is responsible for cleaning the filters and ducts. (These systems, too, should be outfitted with spark detection and suppression technology.) How often are filters changed and the system thoroughly cleaned? How does the insured dispose of the collected metal dust? Methods for removal of settled dust from production areas will also vary with the types of metal being stamped. Magnesium dust cannot be vacuumed, for example, because it is highly explosive; it must be swept, separated from other debris, and placed in properly labeled iron containers for disposal. Some metal dusts, such as beryllium, need to be wet swept or vacuumed. Does the insured have handling procedures specific to all of the different kinds of metal dust posted in its production areas? Production and storage areas should be kept free of debris and clutter. What is the insured's level of housekeeping? Any rags that have been used to clean up flammable substances, such as solvents, fuels, or cutting oils, should be disposed of in metal, fire-resistant containers until they can be removed from the premises. Is trash collected and removed from the premises on a daily basis? Are metal shavings cleaned up regularly? Determine the type and amount of flammable materials that are kept on the premises. The insured may use liquid degreasers for the removal of oil and grease from metal equipment and small metal parts. These degreasers can be broken into five categories: flammable or combustible solvents, nonflammable halogenated solvents, alkaline solutions, emulsifying cleaners, and safety solvents. The underwriter should ascertain which degreasers the insured uses and the specific hazards associated with each. Metal cleaning solvents, including denatured alcohol, acetone, and methyl ethyl ketone, are extremely flammable. Are solvents ever heated or placed near heat sources? Cutting oils and coolants may contain flammable chemicals. Hydraulic machines may also have flammable hydraulic fluids; the insured should use nonflammable fluids whenever possible. How are flammable liquids stored and dispensed? The insured must be in compliance with NFPA 30, Flammable and Combustible Liquids Code. Are fuel tanks checked periodically for signs of stress and leaks? All flammable and combustible substances should be stored away from potential ignition sources. Is the insured, if domiciled in the US, in compliance with OSHA standard 1910.110, Storage and Handling of LP Gas? Depending on the operation, metal fabricators and stamping operations will use voluminous amounts of lacquers, paints, and other varieties of flammable chemicals when it comes to coating operations, and cleaning machinery. It is essential that these rooms are sealed and made explosion-proof, and that excess chemicals are properly stored. Federal law has requirements for electric equipment and wiring in locations that are classified depending on the properties of the flammable vapors, liquids or gases, or combustible dusts or fibers that may be present therein and the likelihood that a flammable or combustible concentration or quantity is present. These are known as hazardous (classified) locations, under OSHA. Rooms where metal workers coat and paint pieces may fall into this category. These rooms should contain circuits (intrinsically safe circuits) in which any spark is incapable of causing ignition of a mixture of flammable or combustible material; an assembly of interconnected intrinsically safe apparatus, associated apparatus, and interconnecting cables in parts of the system that may be used in hazardous (classified) locations; apparatus enclosed in a case that is capable of withstanding an explosion of a specified gas or vapor that may occur within it, and that which operates at such an external temperature that a surrounding flammable atmosphere will not be ignited thereby. These rooms should be purged and pressurized. Purging entails supplying an enclosure with a protective gas at a sufficient flow and positive pressure to reduce the concentration of any flammable gas or vapor initially present at an acceptable level. Pressurization means supplying an enclosure with a protective gas with or without continuous flow at sufficient pressure to prevent the entrance of a flammable gas or vapor, a combustible dust, or an ignitable fiber. Some of these rooms will have employees using pneumatic guns to spray lacquer on pieces; other rooms will house robotic arms that are programmed to paint the pieces in certain patterns. Typical safety features of these rooms include overhead lighting fixtures affixed with transparent plastic shields that will contain sparks, for instance, in the case of a blow out. Entrances to these rooms should have foot mats placed outside so

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

that static can be eliminated from the soles of the shoes of anyone who enters. Cell phones and related electronic devices are forbidden from these rooms, and there should be signage stating such posted outside of each room, and which instruct people to leave the gadgets outside. These rooms should also have three-hour firewalls, and explosion-proof outlets. Walls, ceilings, and floors of the spray rooms should be washed down to remove any flammable residues that might have accumulated. Determine the number of enclosed rooms where painting or coating takes places and whether they adhere to federal laws regarding hazardous (classified) locations. Rooms where chemicals (e.g., excess lacquer, for instance) are stored should also be explosion-proof. Chemicals should be stored in tightly sealed drums, and the drums should be inspected periodically for leakage. All bulk storage of flammable and combustible liquids must be inspected and serviced regularly by qualified personnel. What is the insured's maintenance schedule? The room's floor should be slightly bowl-shaped to keep spilled chemicals from trickling outside of the room. The room should be built so that at least part of the structure faces outdoors. Blowout windows should be installed so that in the event of a blast, its force will carry it outdoors as opposed to being channeled into the plant. The room's walls should be made of 18-inch-thick concrete, and an intrinsically safe exhaust fan should run 24 hours a day, 7 days a week. Determine the number of rooms the insured has on site where flammable chemicals are stored, and whether they meet requirements for hazardous (classified) locations. Is the insured in compliance with NFPA 91, Exhaust Systems for Air Conveying of Vapors, Gases, Mists, and Noncombustible Particulate Solids? What type of fire detection and suppression system does the insured have in place? Are automatic sprinkler systems installed on site? Has the sprinkler system been designed with the insured's production processes and the metals it uses in mind? Small enterprises may not have any kind of fire suppression system installed. Annually tagged Class ABC and D fire extinguishers should be located throughout the premises, and all workers should be aware of their location. Are employees trained in the proper use of fire extinguishers? Has the insured participated in any pre-fire planning? Insureds should have a written fire plan, and employees should be aware of all emergency procedures should a fire occur. How often is this plan practiced and updated? Is the insured, if domiciled in the US, in compliance with OSHA standard 1910.38, Emergency Action and Fire Prevention Plans? Determine the response time and location of the nearest fire service. A moral hazard may exist. What is the insured's current financial situation? Examine the insured's financial records from the past three to five years. How long has the insured been in business? Determine the level of competition in the area. Also, a morale hazard may exist. How strictly are rules and regulations enforced? Who is responsible for enforcing them, and what is that person's level of experience? Many metal stamping shops now use computer-aided design (CAD) software and other kinds of sophisticated software for different parts of the manufacturing process, such as die design or robotic production operations. Such types of software can be quite valuable, possibly making it attractive to thieves; computer equipment itself is also a potential target for theft. These shops also will use personal computers and laptops to perform inventory and accounting functions, among other things. Determine the number, ages, types, and conditions of all computers. Have computers been etched with identification numbers that can help in recovery if computers are lost or stolen? US-based insureds should register these numbers with the National Crime Information Center. Have backup copies of all important software been made, and are they stored in an NRTL-listed, fire-resistant safe off premises? Business Interruption Metal stamping shops rely more on reputation than location to bring in business; operations that are captive, however, may be highly dependent upon their location. Moving to replacement quarters generally should not affect an insured's business. However, metal stamping shops may have difficulty in replacing costly or highly specialized machinery and finding an appropriate replacement location. Small shops, with a small radius of operations, will usually have competition for local business, and a significant relocation could mean a loss of income. The Business Interruption exposure for metal stamping and fabricating operations will be moderate. Does the insured own or rent the premises? Determine the size and scope of the insured's property. Would it be preferable for the insured to rebuild, repair, or relocate? How important is location to the insured's business? Most metal stamping operations have local or regional customers, so location usually is not critical to the continuation of their business. For many insureds, their reputation within the industry will be a more important factor in determining their ability to continue operations in the event of a loss. Facility requirements, however, may affect the insured's ability to relocate and start up operations quickly. Determine what unusual facility or premises needs the insured may have in order to conduct business. Does the insured rely on a railroad sidetrack for the delivery of metal materials? If so, then a suitable replacement facility may be more difficult to locate. What is the availability of replacement equipment? If any of the insured's machinery is custom made, then replacement time may be lengthy. Since more than one machine may be needed to produce a finished piece, downtime for a single machine can create a bottleneck effect; a flow chart analysis is recommended. Insureds with older machinery may find it difficult to obtain replacement parts or repair information. Are key replacement parts kept on hand? If not, how easily are they obtained? Can they be made by the insured or by a nearby shop? Does the insured have a reciprocal agreement with an area shop to produce parts or complete existing orders if a loss occurs? If one or more pieces of key production machinery (e.g., dies, mechanical drill presses) are destroyed, downtime could be significant as insureds wait for replacement

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

machinery to arrive. Some pieces of equipment will be highly specialized, costly, or rare, and it may take months or even a year or more to obtain such equipment. Does the insured have any backup equipment that could be used in the meantime? Determine who supplies the insured with critical production machinery and how long it would take to replace such items. An underwriter should investigate the need for Extra Expense Coverage which would allow the business to be up and running more quickly. It is a positive underwriting sign if the insured deals with more than one supplier for its metal supplies. What is the availability of raw materials? How easily could such materials be located if they became unavailable from the insured's main supplier? Stock metal materials generally should be easily replaced in the event that a main supplier was unable to deliver them. What types of metals does the insured use? Does the insured work with any exotic metals? Highly specialized pieces of metal may be difficult to obtain, which could possibly cause extended production delays. Replacement shipments may take time to be delivered. Although this industry does not have a peak season, shops that do contract work may suffer more of a loss than those that produce parts for a specific industry or manufacturer (such as captive shops) and that maintain an inventory of finished pieces at all times. Peak seasons that affect those industries or manufacturers, however, may have an impact on insureds that deal exclusively with them. Contingent Business Interruption coverage may be needed if the insured relies on only a few materials suppliers and/or customers. Blanket Business Interruption may be appropriate for captive shops. In the event of a major business interruption, does the insured have a contingency plan in place? Inland Marine The level of exposure for this line depends on how finished goods are delivered, and the amount of equipment that can be easily transported from the insured's shop. Valuable Papers and Records coverage may also be needed. Some shops will have valuable metals attractive to thieves. Generally, the Inland Marine exposure for metal fabricating and stamping operations will be minor. Most insureds will ship finished products via public carrier, and therefore truck cargo is typically covered under the trucking firm's insurance policy. Should the insured perform any of these duties, Transit Coverage is recommended. What are the average and maximum values of loads shipped? How are pieces packed and secured for transit? Although most metal stamped products are fairly durable, some are fragile or have surfaces that can be easily damaged. What types of packaging materials are used? Many metal fabrication operations will rely on forklifts to move heavy loads, therefore a Mobile Equipment Floater is advisable. Determine the number, ages, types, and conditions of the insured's forklifts. What are the qualifications and levels of experience of the insured's forklift drivers? The rated load capacity should be clearly marked on all forklifts. Employees should be instructed not to exceed the rated capacity of any forklift, and all forklifts should be equipped with overhead protection, such as a roll cage. Safe operating procedures concerning forklifts must be strictly enforced. Are forklifts equipped with motion and backup alarms? Employees should be instructed to stay clear of areas where forklifts are operating. Are clearly marked traffic aisles laid out for forklifts? Thorough training in the safe operation of forklifts is essential to minimize injuries. Forklift operators must be trained to inspect, drive, load, park, and refuel their vehicles properly. Prior to operation, do drivers use a written checklist to assess the condition of their vehicles, including gauges, warning lights, horns, motion alarms, forks, fork retainer pins, locks, tire pressure, and steering and brake functions? What types of forklifts does the insured use? If gasoline or propane forklifts are used, proper ventilation is required. Is refueling of forklifts conducted outdoors? Because explosive gases may escape from a forklift battery during recharging, this procedure should take place outdoors and away from ignition sources. When forklifts are unattended, are control levers placed in neutral, emergency brakes set, forks lowered, and power cut? If the lift is parked on an incline, chocks must be placed in front of or behind wheels to prevent rolling. Stamped metal products may have resale value, particularly ornamental or exotic metal pieces. However, quantities of materials large enough to have significant value to thieves will be bulky and extremely heavy, and therefore, difficult to steal. Has the insured ever had incidences of materials or equipment theft? Facility doors should be equipped with double-cylinder, deadbolt locks. Does the insured have any type of alarm system installed at its facility? Ideally, it should be connected to a central-station monitoring facility. Are the premises fenced in? The insured will require Valuable Papers and Records coverage to protect engineering designs, records, contractual agreements, statements, accounting, and employment information. Are copies of all papers and records maintained in an NRTL-listed, fire-resistant safe off premises? A Bailee exposure will exist if clients ever leave original blueprints, dies, die prototypes, or important papers in the care, custody, and control of the insured. Do clients ever leave any such materials with the insured? If possible, the insured should work from a copy, rather than the client's original records or blueprints. Allowing clients to keep all originals will eliminate the Bailee exposure. Boiler and Machinery: Equipment Breakdown The Boiler and Machinery: Equipment Breakdown exposure for metal stamping shops will be moderate, since insureds

Source: Best's Underwriting Guide, Version 2017

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Metal Stamping and Fabricating Operations

Best's Underwriting Guide

will use numerous pieces of production equipment (e.g. punches, presses, drills, etc.) in day-to-day operations. Boilers are not common in this industry, and will not pose an exposure. If the insured experiences a series of equipment malfunctions lengthy downtime could occur while waiting for repairs to be completed, or replacement parts or new production machinery to arrive. What are the number, ages, values, and conditions of the insured's production equipment and machinery? If one or more pieces of key production machinery (e.g., dies, mechanical drill presses) malfunction, downtime could be significant as insureds wait for repairs to be completed, or for spare parts or new machinery to arrive. Some pieces of equipment are highly specialized, costly, or rare, and it may take several months or even a year or more to obtain such equipment. Production machinery can be quite expensive, and this can result in metalworking outfits purchasing used equipment — some of which might be missing crucial parts. An underwriter should determine whether the production machinery was bought new or used, and if any machinery is used, what steps were taken — including ascertaining the training and experience levels of the professional who inspected the equipment — to ensure its proper functionality. Determine the preventive maintenance schedules for all primary production equipment; regular inspections and maintenance will reduce the potential for equipment breakdown. What are the training and experience levels, and qualifications of the insured's equipment maintenance crew? Are repairs contracted out to a qualified professional? Determine the qualifications, experience levels, and reputation of the person responsible for repairing the insured's production machinery. It is a positive underwriting sign if the insured has a written protocol outlining preventative maintenance procedures for all machinery in the stamp shop. If the machinery is custom made, replacement time may be lengthy. What is the availability of replacement equipment? Since more than one machine may be needed to produce a finished piece, downtime for a single machine can create a bottleneck in production; therefore, a flow chart analysis is recommended. Insureds with older machinery may find it difficult to obtain replacement parts or repair information. How easily and quickly are replacement parts obtained? Can they be fabricated by the insured or by a nearby shop if necessary? Determine whether the insured has a reciprocal agreement with an area shop to produce parts or complete existing orders if a loss occurs. Does the insured have any backup equipment that could be used until operations are restored to pre-loss conditions? Who supplies the insured with critical production machinery, and how long would it take to replace such items? UNDERWRITER'S CHECKLIST Is the insured an independent or captive stamping facility? What types of metal stamping/fabricating operations are conducted at the facility? In evaluating finished products, what kind of quality control procedures are used? Does the insured's state of operation, if US-domiciled, have any special requirements regarding the manner in which metal coil is strapped to the bed of a flatbed trailer? What are the types and amounts of hazardous substances used in the insured's process, and how are such chemicals stored? Is the US insured in compliance with all applicable Environmental Protection Agency (EPA) regulations? If allowed, is wastewater first sent through an in-ground oil-water separator to collect oil in a holding tank before water is discharged into the ground or into a municipal sewer system? Does insured's state or country of operation have any specific regulations regarding products containing volatile organic chemicals (VOCs)? If so, is the insured in compliance with those regulations? What type of dust collecting system does the insured have on the premises, and is it outfitted with spark detection and suppression technology? Is the US insured in compliance with the EPA's National Emission Standards for Hazardous Air Pollutants: Area Source Standards for Nine Metal Fabrication and Finishing Source Categories? Is there a safety protocol regarding the operation of mechanical power presses? Have dangerous machinery or areas of the production floor been outlined with reflective tape to alert workers? How are the insured's production workers trained? What qualifications or certifications are they required to have? What kinds of materials-handling devices (e.g., cranes, forklifts, die trucks) are used to move metal stock, dies, and other materials? Does the insured perform any finishing operations? What is the extent of the insured's coatings operations? Does the insured have dip tanks on site? If so, has the insured obtained all applicable environmental permits? Are any of the US insured's work and storage rooms considered, as defined by OSHA, hazardous (classified) locations? What are the types and amounts of flammable substances used by the insured? Does the insured have above- or underground fuel storage tanks? How automated are the insured's production processes? What kinds of sophisticated computer software are used in the stamping process? Does the insured have written preventative maintenance procedures in place for all production equipment and machinery?

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Copyright © 2017 A.M. Best Company. All Rights Reserved.

Metal Stamping and Fabricating Operations

Best's Underwriting Guide ACKNOWLEDGEMENTS

We would like to thank the following people for their help in crafting this report: Tim Heston, Senior Editor for The Fabricator and Stamping Journal, both official publications of the Fabricators & Manufacturers Association, International Ronald M. Pitcher, president of Pitcher Insurance.

Source: Best's Underwriting Guide, Version 2017

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Copyright © 2017 A.M. Best Company. All Rights Reserved.