RERMAG

Risky Business

The rental business is, indeed, a risky one. Personnel, along with materials, are lifted high in the air, in the middle of sometimes chaotic jobsites and industrial facilities. Workers are involved with equipment that weighs tons and are pressured by a competitive marketplace to work fast. They use flammable and toxic solvents and chemicals. And equipment is frequently rented to inexperienced customers with questionable knowledge and judgment.

Accidents can and will happen, and claims will be made against rental companies. The injured parties and their attorneys will go after the companies that they believe have the deepest pockets, or are the most obvious links in the supply chain.

Their first targets are usually the rental companies.

Nonetheless, insurance experts agree that a high percentage of accidents and the claims that result from them can be avoided by systematic risk management on the part of rental companies. Consider the following occurrences:

A man rents a skip loader and drives it to the jobsite, a few miles from the rental center. He uses it for a few hours and, while he is driving it back to the rental center, suddenly the dipstick, which is located between his legs, flies up. Hot transaxle fluid burns 30 percent of his body.

Investigators check out the skip loader. Transaxle fluid should be about the color and consistency of motor oil. This fluid was yellow and as thick as toothpaste. Investigators discover that, despite the presence of a ready-to-rent tag, the machine clearly suffered from a lack of maintenance.

Had the transaxle fluid been checked in the months before the accident, it would have been changed. Although the machine had been vandalized a few months before the occurrence and had since been rented and operated for about 30 hours, evidently nobody checked this fluid. The company's maintenance records were almost nonexistent and its stickers relating to prior service were illegible.

The customer incurs $165,000 in medical bills and suffers a heart attack while in intensive care. Although he had prior heart problems and the heart attack might have been unrelated to this accident, it would not have been a stretch to convince a jury otherwise.

The claim is settled for $730,000. Had the rental center's maintenance staff changed the transaxle fluid, it never would have happened.

Rent the right equipment A man is looking to rent a heater for a backyard party. The rental center has no heaters available, with the exception of industrial open-flame heaters without guards that are normally used for drying drywall. He rents four of them and sets them up in the back yard. A 10-year-old boy, playing hide and seek, backs into the heater's open flame. His shirt catches fire. Although his parents alertly toss him into the swimming pool, he suffers third-degree burns on his back, causing permanent disfigurement.

The boy's bandages have to be changed frequently and he endures constant itching. In addition to medical bills of $75,000, he'll require future surgeries and psychiatric counseling.

The customer sues the manufacturer as well as the rental center. The manufacturer settles for $600,000 because of the lack of screen guards covering the flame. The rental center pays $500,000.

What happened at the counter? The customer insists the counter person recommended the inappropriate heaters, a charge the rental center denies. If the rental center's safety labels had been legible, if it had given instructions in writing regarding proper use of this type of heater, its damages probably would have been greatly reduced. If the counter person had refused to rent the heater because it was inappropriate for a backyard barbecue, the accident never would have occurred.

Of course, it is possible the customer never told the counter person what he wanted the heaters for. Perhaps he just hurriedly pointed to them and said, "I'll take these." Still, a policy of asking customers about their applications, and proper safety decals, instructions in writing and appropriate flame protection could have limited the rental center's liability.

Drive defensively A major cause of accidents is poor driving, both on the part of rental company personnel and other drivers. A painter recently came to a rental center at 7 a.m. to rent a ladder. It was too long to fit in his truck, so the counter person said, "No problem, we'll deliver it. We'll just follow you to your jobsite."

On the way there, the painter stopped at a red light just as the rental center's deliveryman decided to pull out his cellular phone and make a phone call. As he was unbuckling his seat belt to pull out the phone, he rear-ended the painter at 35 miles per hour. The police, as they cited the deliveryman for speeding, found that he had a .05 blood alcohol level.

The painter was knocked unconscious and suffered serious back injuries. He incurred $35,000 in medical bills, $150,000 in wage-loss claims and an anticipated wage-loss claim of $400,000 because he allegedly could no longer climb ladders as a result of his surgery. The case was settled for $325,000. Careful driving could have prevented it.

William Caso of Jenkins/Athens Insurance Services, Concord, Calif., says most accidents aren't caused by drivers of big rigs, but rather of the pickup trucks commonly used by rental center service personnel. A defensive driving course might have inspired this deliveryman to be more careful.

These are just a few examples of preventable accidents involving rental companies. Accidents and claims cannot be completely eliminated from a high-risk business. But if a rental center has a good safety program and takes measures to protect itself, its employees and its customers, accidents can be prevented and claims dramatically reduced.

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