Risk mitigation

Cabling designers and installers have various insurance policies to militate against potential risks, but what about mitigating risks from insurance companies themselves?

From BICSI's research, not many designers and installers understand the risks from insurance companies and how to address those risks.

The risk is exposure to subrogation — a legal right reserved by insurance companies to pursue a third party that caused an insurance loss to what's insured. The risk is complex but the solution is simple — compliance.

Let's explain this with an example: a contractor who installed cables in an office building. You ran it through a fire-rated wall as per the consultant's specification. The cables were installed in compliance with the specifications, local cabling standards, regulations and Building Code — and the installation was signed off by the consulting engineer. Five years later, another contractor installs additional cabling through the correctly sealed firewall penetration, drilling holes through it and installing fire pillows around the new cables. A year later, a small fire — that wasn't contained by the compromised firewall — engulfs the building. The insurance company dutifully pays the $10 million insurance claim, but then seeks to recover the amount paid using subrogation.

From the fire brigade's report, the insurer discovers the firewall was compromised through the penetration made six years ago and deems the first contractor and the consultant responsible for extensive fire damage, allocating 30% 'proportionate liability' to the contractor and 20% liability to the consultant. After all, the first contractor put the penetration in the firewall in the first place, even though it was in compliance with the rules and regulations.

So how can the contractor protect himself from having to pay millions for something he wasn't responsible for? The answer is: compliance. Not just performing the installation in accordance with codes and regulations, but documenting the installation accurately to validate compliance.

The TCA1 and TCA2 (Telecommunications Cabling Advice) forms are your 'get out of jail' cards. According to the ACMA rules, it's mandatory for cablers to complete, submit and retain these forms as a proof of compliance. More importantly, these forms also show when the installation was carried out, what you did and what you did not do. This will help you distance yourself from installations carried out by another party.

BICSI

www.bicsi.asn.au

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