Inspections still come first

Inspections still come first – Property

Joseph F. Mangan

A risk manager recently asked about boilers and pressure vessel inspections. She wasn’t talking about the routine loss control, underwriting or rating inspections that insurance companies perform for other lines of business. Her concern was the inspections required by state or local law, the ones that require the services of a certified boiler inspector.

The first thing the risk manager wanted to know was whether the boiler insurer always does the inspections. She asked about hiring an independent agency to provide the inspection service for a fee.

On one level the answer is simple. The boiler and machinery insurer typically performs all the inspections, and generally goes beyond those required by law. Most insurers will also inspect pressure vessels and machinery that is not subject to the law while the inspector is on the premises.

It is possible to have another agency perform the inspections, but you can’t hire an outside service for certificate inspections required by law. That’s because each of the 50 states has laws that require periodic inspection of boilers and pressure vessels by a certified boiler inspector. A few municipalities and counties have also adopted their own ordinances.

Despite the variety of laws that require inspections, the standards are remarkably similar. In most ways they’re identical, applying the standards of the American Society of Mechanical Engineers. The differences among jurisdictions lie in the scope of inspections required. ASME has inspection standards for every kind of boiler and pressure vessel. That’s more inspections than most states feel they can afford, so most state inspection laws apply only to boilers. Other laws also apply ASME inspection standards to other pressure vessels. The standards are the same in all jurisdictions, but some require inspection of more types of pressure vessels than others.

ASME also sets standards for certifying inspectors and develops the examinations. State, county and municipal agencies administer the tests and report results to ASME.

That does not, however, give ASME the final say about who becomes a certified boiler inspector. That’s the way the organization wants it. Model boiler and pressure vessel inspection laws, supported by ASME, impose another requirement on certified boiler inspectors. They have to be employees of a state, county or municipal agency that has responsibility for inspecting boilers and pressure vessels or of an insurance company authorized to write boiler and machinery insurance and that insures the boiler or pressure vessel to be inspected. That gives the inspector a vested interest in doing the inspection properly.

That requirement eliminates one of the choices the risk manager proposed, but it opens another possibility. Although she doesn’t have the option of engaging an outside agency to do the inspections, she can leave it to a public agency.

Risk managers, however, don’t usually consider public agencies a viable option for boiler and pressure vessel inspections. Certified boiler inspectors employed by government agencies tend to be less flexible than their counterparts in the insurance industry. On occasion they have notified boiler operators that they will be on site for an inspection at a certain time, and they expect to find the boiler ready for inspection. Production schedules are not their concern, and it sometimes shows in the way they act. Risk managers who go along with that attitude are likely to find themselves at odds with production managers who want inspections scheduled around their needs.

Inspections by an insurance company offer another advantage that can be important. When an operator wants to move a boiler or pressure vessel from one state to another it very often requires inspection both before and after the move. If the vessel is located in a state that does not require it to be inspected, an insurance company offers the only opportunity for the required inspection. That can be a good enough reason to buy insurance that would otherwise be superfluous.

Joseph F Mangan is a consultant in Scotch Plains, N.J. He can be reached at

COPYRIGHT 2003 Axon Group

COPYRIGHT 2003 Gale Group