Hints That you Might Have a Subrogation Case

Anytime that the failure of a product causes personal injury or property damage, there is a possibility that an insurance carrier could recoup its expenditures from the manufacturer, installer or servicer.  However, not all product failures result in grounds for subrogation claims.  Sometimes products “wear out” and when they do, it can be due to the expiration of the useful life of the product.  Case in point: water heaters.  Depending on who you talk to, the useful life of a residential water heater can be anywhere between five and ten years.  Then there are those more expensive models that can last between 10 and 15 years.  The life of a product has to be taken into consideration, usually during the investigation phase, so as to make sure that the subrogation case will not be summarily dismissed if the case goes to court.  In the case of fires, both structural and vehicular, where the cause was electrical or mechanical malfunction; the key here is whether the equipment was recently installed or serviced by an outside service company or individual.  In the case of existing equipment, the question of maintenance will arise and become a key piece of information.  If the equipment has been allowed to go unmaintained, then it might be possible for a manufacturer or installer to argue that the operating condition of the equipment was beyond their control and they cannot be held liable.   The same thing applies to situations involving water damage.  Water damage can occur from leaking refrigerators, dishwashers, washing machines, and any other piece of equipment that uses water in the process. 

There are also situations that arise where subrogation is not so obvious.  Assuming that an employer is operating a safe workplace, on the job injuries can be caused by the operation of equipment that is not properly guarded.  OSHA regulations are in effect that prohibit the operation of rotating or moving equipment without proper guarding.  Such equipment includes, conveyors, wire drawing machines, drill presses, milling machines, and stamping machines.  In many instances, rotating equipment is operated with the use of pulleys or flywheels.  These components have to be matched to the rotational speed of the machine.  If the machine is operated at a speed greater than the rated speed of the flywheel, then it is possible for the flywheel to fail.  If the flywheel fails under normal loading and within its expected life, then subrogation is possible.  However, if someone in the plant has increased the rotational speed of operation beyond load limits, then subrogation is most likely not possible.  It should be noted that many smaller pulleys are adjustable and as a consequence, rotational speed can be increased to a dangerous level.  In addition failures from hydraulic hoses can occur where the operator is sprayed with hot oil.  If the hose is routinely replaced as a maintenance item but, fails during its service lifetime, then it can be argued that the hose was defective and likely warrants a subrogation claim against the manufacturer.  Similarly, pressure vessels can EXPLODE and cause property damage and serious injury.  Vessels containing air, water, oil, or any other fluid under PRESSURE must be certified for the service.  If the vessel failed during its expected life, was not over-pressurized, maintained by minimizing corrosion, and inspected on a regular basis; then, subrogation against the manufacturer is a possibility.  However, if the vessel was manufactured in house, by the insured, then any injured employees might have a design defect claim against the employer.               

Tankless Water Heater Explosion

While investigating the cause of a tankless water heater explosion, the extent of the damage reinforced the mechanics behind the explosive force. Tankless water heaters are devices that put a large amount of heat into flowing water in a very short period of time. But, when the water stops flowing and the heat doesn’t, there can be a tremendous release of destructive energy. It is well known that as water is  heated in an enclosure, not only does the temperature rise but, the pressure also rises as well. Pressure cookers are a good example of how water can become pressurized and if caution is not exercised by the user, can be come a deadly force. In addition, explosions involving conventional water heaters and boilers are not unheard of. As a result, temperature and  pressure valves have been required equipment on these items for a number of  years. However, tankless water heaters don’t have relief valves. Since the amount of water to be heated is less than one gallon, (when water is not flowing) it doen’t take long to cause the temperature and pressure  to reach explosive levels. The tankless unit currently under investigation contains two small reservoirs in which heating elements are immersed. The reservoirs appear to be constructed of  a hard, plastic-like material, the properties of which are unknown. The point at which rupture occurs is  dependant on the properties of the material because it is the materal that is  subjected to the rapidly increasing pressure.