Product Liability Claims

Product Liability Claim assignments require the immediate attention of not only the claims adjuster assigned, but many expert investigators, Engineers, Forensic Electricians, and Structural Engineers.

It is of utmost importance that everyone work together to inspect and investigate the failure to determine why the product failed – whether it be poor manufacturing or maintenance after the product was put into place. In these cases, all equipment involved must be carefully inspected and labeled with a chain of command of any movement to avoid any spoliation of evidence.

Example of Product Liability Claim Assignment

Ore Stacker Reclamer Product Liability Claim in Burns Harbor, IN (1)On June 12, 2014, we received a request to handle a product liability claim regarding a damaged unit in Burns Harbor, IN. It is reported that a large Ore Stacker Reclaimer had been destroyed. Our assignment was to work with the representatives of the original designer and manufacturer of this unit and the legal counsel assigned to the claim. Due to the type of damage and unit involved, legal teams of eight agencies were also assigned to represent the individual companies who had any design or part installed on this unit.

Product Failure

On March 12, 2014 during the operation of a large Ore Stacker Reclaimer, the operator discovered the main control boom, which had the digging bucket wheel, started to rise up from ground level. During this action, the operator was unable to stop the lift arm. This caused the lift arm to rise to the point where the unit structure tipped off its mounting onto its side and onto the ground. This unit travels along a railroad style track. The end result was a $25M unit was completely destroyed.

Our task was to be present during all phases of the tear down and examination of the unit and it operational system. We were representing the insurance carrier for this unit.

Inspection & Monitoring Breakdown

  • The removal of all vital controls and operational systems connected to this unit
  • The monitoring of the initial tear down of all the operational systems in an effort to determine the possible cause of the twelve fail-safe systems to fail and prevent this issue to occur
  • Once the vital components were removed from their original mounting locations, key systems were secure and moved to a laboratory environment for closer examination in an effort to determine what part failed and why the part failed.

The initial claim by the owners of the unit stated that the unit’s designer and manufacturer failed to provide a safe, operational unit which was purchased for the ore extraction requirements by the purchaser and owner.

The onsite inspection not only included the removal of the items of interest, but to also examine the operational unit on site to review the maintenance and operation of the unit. All of the operations were not only monitored by our office, but also by all the legal teams and their engineers whose services were secured to assist in the inspection of all the components.

The onsite inspection lasted six days. The initial tear-down of the operational system inside a controlled warehouse lasted five days. The laboratory system inspection lasted three days. It should be noted that during this entire process, we were able to submit instant updates and images to the carrier through our web based equipment from the site of each inspection. Digital images and video was secured through the inspection process.

Key Findings from Investigation

  • The unit was placed in operation around 1975
  • Maintenance for the unit was completed by the owner with assistance of the manufacturer
  • It was noted that the manufacturer had been on site several times and noted deficiencies in the maintenance and operation of the unit

Ore Stacker Reclamer Product Liability Claim in Burns Harbor, IN (2)

  • In 1990, the owner chose to involve an outside company to refurbish the electrical control panels of the unit. It was discovered that during the examination of the maintenance records and inspection of the main operational components, it appears that key elements of the safety devices installed by the original manufacturer had been bypassed. It was later discovered that after the destruction of the unit, new safety devices were replaced or re-installed in the operational unit.
  • It was also noted that a major support of the large cable motors were cut and cables were installed under the braking system for unknown reasons.
  • It was also noted that many of the electrical controllers and sensors were never replaced during the life of this unit. Due to the dirty environment where the unit was operational, it was noted that all of the electrical components had debris and dirt inside the units.

Additional Discoveries

  • The original manufacturer was not involved in the refurbishment of the main electrical panels used in the daily operations of the unit.
  • Many of the safety devices were never replaced during the life of the unit
  • Questionable maintenance of the unit to include the removal of safety devices and supports were not in place prior to the destruction of the unit.

As stated, Ouellette & Associates, Inc.‘s independent claims adjusters are capable to meet or surpass all requirements involving any product liability claims. This includes the ability to provide immediate findings and images/videos from the site of operations. In addition, we now have the capability to provide drone technology to enhance on site inspections if required.