Hello, and welcome to today's webinar titled Medical Equipment 101, Underwriting and Claims. Please be aware of the IMUA statement. We are fortunate to have Bob Opitz and Mark Ewing as presenters today. Bob Opitz is currently a vice president with Chubb Insurance and is the worldwide inland marine manager for Chubb Commercial Insurance. He has been with Chubb for 19 years and has held various positions within commercial underwriting and in the home office. In addition to Bob's responsibilities within Chubb, he is also an active member of IMUA and is currently chairing IMUA's annual meeting education committee, which is responsible for planning the annual meeting each year. Bob has been the master of ceremonies for IMUA's annual meeting for the past several years and we look forward to having him moderate this year's presentation, which will actually in 2015, at the Ballantyne Hotel in Charlotte, North Carolina. Bob is a graduate of Rutgers University and continues to live in New Jersey with his wife and two children. Mark Ewing has been employed with LWG Consulting, which advises clients on the cause and scope of damage to high-tech manufacturing equipment. He has been with LWG Consulting for 22 years and during his tenure, he has held various positions with the firm, including a position in consulting management and one as director of restoration. His current role is as principal consultant in LWG's consulting complex loss group, where he is engaged in large, complex, and litigious claims. Mark has provided his expertise on a wide variety of large and complex claims throughout the world, including the United States, Canada, Latin America, and Central America, Europe and Asia, and various industries, including medical, manufacturing, pharmaceutical, and research facilities. Mark also spearheads LWG's consulting catastrophe response team and has directed teams after most major catastrophes worldwide over the past 15 years. He has been a featured speaker for insurance companies and conferences on topics such as medical equipment and industrial losses, equipment restoration, and other topics of interest to insurers. Welcome, gentlemen. The floor is all yours. Thank you, Mark. Okay, I think, Mark, were you going to start? Oh, yeah, thank you. Yeah, hi, this is Mark. Thanks for the introduction. As has been stated, I've been working in the insurance industry for over 20 years helping our clients, primarily claims adjusters, with a variety of different losses on different types of equipment. And over that 20-year period, my experience is that claims on medical equipment are definitely unique. We can't certainly cover this topic in detail in the time that we have allotted, as we could be talking about a particular piece of equipment, such as an MRI, and that would last several hours. But this presentation is going to provide an overview of medical equipment claims. In the presentation, we'll discuss what makes these claims unique and provide some claim scenarios. We'll discuss some underwriting considerations, including vulnerabilities to equipment, issues pertaining to valuation and equipment coverage. And we'll finally talk about claim issues, providing some examples of different loss types, briefly lay out some issues with warranties after a loss, and various options for repair, replacement, and restoration. And a few case studies will hopefully illustrate this information. So what makes medical claims unique? One of the first things is technology. The technology in this industry evolves very quickly and doesn't include a couple of circuit boards or monitors. The more complex the system, more complex systems include things like cryogenically-cooled superconducting magnets, have terminologies such as 164-slice CT. So it can be difficult to understand what a lot of this terminology means and how the technology works. There's also a different response to different perils. So most electronics can tolerate limited exposure to clean water, as an example, as long as restoration commences in a timely fashion. Some medical equipment does not respond well to water. And we'll talk about some of those things later. So there's some unique perils and susceptibilities to equipment as well. On the unique peril side, you can have magnet quenches, where a magnet heats up, loses its ability to superconduct. We'll talk about an example on that. But that's a pretty unique situation. If you've never seen it, it can actually be kind of cool, but also pretty scary. Medical equipment claims can also have some pretty significant business interruption and extra expense issues. The photograph that's shown here is a CT scanner. And those things can cost a lot of money to repair, number one. But if they're down, this type of equipment is usually the most highest revenue-generating and profitable equipment in a hospital. So when it's down, it costs a lot of money. And it can also cost a lot of money to bring temporary units in. There are also some unique personalities involved in these type of losses. Every department has a department head. Every surgeon can think they're potentially the most important person in the hospital. Everybody wants immediate attention. And you also have a lot of different stakeholders involved with the equipment, which we'll touch on in this presentation as well. There's unique liabilities with equipment. Some of the medical equipment is very, very precise. And if they're off tolerance by the slightest amount, it can cause some problems. That's a particular concern for misdiagnosis and also mistreatment of patients. There's also a lot of high visibility to this equipment. If it's a regional hospital and the hospital is not able to provide service, that can make it through the news. So there's some PR issues associated with these type of claims potentially as well. Also, warranty issues. It's a big topic of conversation starter. It's a big cause for concern for people. Every piece of equipment, especially the major pieces of equipment in a hospital, is going to be under a service contract of some sort. That can complicate bringing a claim to resolution as well. There also may be some unique certification issues. Some hospitals are joint commission accredited. And they require certain documentations and processes to be followed, including the repairing of equipment. And there also may be some HIPAA issues for compliance. So where are you going to typically see this equipment? You're going to find it in a lot of different types of facilities. Similar equipment, such as an X-ray machine or a CT scan or an MRI, can be found in a hospital, in an outpatient specialty facility, in a doctor's office, a long-term care facility, or it could even be a mobile unit. And these various installation locations have different levels of care that can also influence the criticality of having some functional equipment. So for an example, an urgent care facility may have an X-ray unit, but it typically does not have a radiologist on site, nor can that facility perform any trauma care, but for initial diagnosis, perhaps. The urgent care facility may only use the X-ray a couple times a week, so it's not a highly profitable piece of equipment for them, potentially. Contrast that with a level one trauma hospital, which is the highest trauma level care you can get. That hospital is going to have an emergency room, an imaging department. They're going to have multiple specialists on site 24-7. There's going to be a higher volume of emergency patient traffic. When you combine that with scheduled visits to, let's say, the radiology or imaging area, coordinating exams can be difficult. And that imaging equipment, as I mentioned before, along with surgical equipment, is typically the highest revenue generating equipment in a hospital. Therefore, that equipment is going to have a more significant impact on the profitability of a hospital than it is at a long-term care or an outpatient specialty facility, as an example. So what type of equipment are you typically going to see in a hospital environment? We have some listed here. Analytical laboratory, patient monitoring, imaging, surgical. So some of this is going to be found in the same facility. I mean, to illustrate that, let's look at a level one trauma facility that I mentioned on the previous slide. They're going to have almost every piece of equipment that you can imagine in that hospital. So to illustrate this a little bit more, consider a patient that arrives to the emergency room via an ambulance. That patient had fallen, they struck their head, and they're currently unconscious. The nurse immediately connects the patient to a vinyl sign monitor to measure heart rate, blood pressure, and oxygen levels to determine the patient's stability. The doctor wants to know what medicine he can potentially administer, and therefore needs to know if the patient is on prescription drugs. The patient's unconscious, so they can't comment on that. So blood's drawn, blood sent to the hospital lab for analysis. The patient's also hooked up to an EEG, which measures brain wave activity, and abnormalities are unfortunately noted. So the doctor wants to check for brain damage, like a brain aneurysm. So the patient is placed in an MRI, and the scan is run on the brain. And that scan reveals that there's an aneurysm, so the patient's immediately transferred to surgery. So in this particular instance, that kind of describes the type of equipment that you could have in an emergency room setting. Again, you may have various types of equipment in different locations that were mentioned above. It may just be patient monitoring equipment in a doctor's office. It may be a specialty surgical center that only has surgical equipment. So you need to be aware of what type of equipment is in a particular facility. As far as imaging equipment goes, we're going to give some various examples of some different types of imaging equipment and some potential issues that you may have on the back end on the claim side. So I don't want to provide too much information and bore people too much with a lesson in physics about how some of this equipment works. But I do need to provide a little bit of information. Hopefully it won't bore people too much. But an MRI stands for Magnetic Resonance Imaging System. And it produces very, very significant or high intense magnetic fields to make an image. In order to do that, it uses a superconducting magnet. That field is strong enough to orient or align the spin of individual atoms in the direction of a magnetic field. When that's done, a radio frequency is applied. And that forces the atoms to spin in the opposite rotation of what they normally do. And then when that radio frequency is stopped, the atoms go back to their original spin and release energy in the process. That energy is recorded. And that's what helps the MRI do its job. That's what creates the image. But in order to get all that stuff to happen, again, you've got a very, very intense magnetic field. And then you've got a lot of RF frequency or radio frequency being applied as well. To generate that magnetic field, you have to use a lot of current, which creates heat to cool the magnet so it functions properly. Then cryogenics or cryogens are used. Typically, it's going to be some sort of liquid, like liquid helium. And that's pumped around the magnet to keep the magnet cool. That pump that does that is called a cold head. And in the loss of power, that cold head is going to not pump cryogen. That's going to cause the magnet to overheat. That causes this liquid helium, as an example, to expand very rapidly and turn almost instantaneously from a liquid to a gas. And that can cause rapid expansion, then, of the magnet shroud or housing, which can cause venting or an explosion. So the photograph in the top right-hand side of this slide, you can see some steam coming out of the top of the magnet where that yellow arrow is. That's venting of a magnet after a quench. This is a very small quench. You can have large quenches that can actually cause the magnet to explode, in the worst case. Some other types of damage that you can have are impact damage to the gantry. The gantry is that donut here that you see that contains the magnet. And in the lower left-hand photograph, you can see a gantry. And I hope that's not a patient's head that's sticking up in the right-hand side here. But you can see the picture of a gantry pressed up against. Sorry, a gurney pressed up against the gantry. So that's a common thing. If a cleaning crew comes in, they open the door to the MRI suite, and they roll in a vacuum cleaner that's metal, that vacuum cleaner is going to be pulled very rapidly into the gantry and can damage the gantry. It could be as little as damage to the panels, but it could be much more extensive to where it breaches the shroud. It could cause a quench. There's lots of various things that could happen. Another type of damage to MRIs that's not perhaps as apparent is damage to the RF shielding. The photograph on the lower right-hand side of the slide shows some copper RF or radio frequency shielding that's going into an MRI suite as it's being constructed. Because of the intense magnetic fields and radio frequencies produced by the magnet, you want to try to keep those frequencies in that magnetic field in that suite. So you line it with floors and ceilings and walls with copper sheeting. And if you have a water loss, as an example, that copper can start to corrode. And if it corrodes significantly enough, it can actually affect the image quality of the MRI, even if the gantry is not touched and there's no direct water exposure there. So CT scanners and nuclear cameras, you're also going to find these in imaging departments. The upper right-hand photograph shows a gantry that has its cover removed. That was to allow for inspection. This particular unit had water exposure. So we wanted to see how far water penetrated inside the gantry to see if the gantry had any water damage. A CT scanner uses x-rays. And it pivots around a patient that goes into the hole of the gantry. So the x-ray heads are on one side. In this case, it would be the top or the top left-hand side is where the x-ray tubes that generate the x-ray are located. And on the bottom right-hand side down here, this is the detectors that detect the x-rays. The detectors that detect the x-rays that pass through a patient. Down at the bottom, we have a nuclear camera. Nuclear camera functions by injecting some radioactive isotopes into a patient. Those isotopes escape from the patient, escape from the bloodstream and the tissue in the patient, and are collected or absorbed by a detector that would be up in this section of the gantry of the nuclear camera. Those detectors turn that absorbed isotope into light. And that light is then converted into an electrical impulse that's sent to an imaging computer that makes the image. Both sets of detectors, even though they're made of different materials, both sets of detectors in a CT scanner and a nuclear camera are hydroscopic, which means they absorb moisture. They're very, very sensitive to elevated humidities. This is particularly a concern after a water loss or a fire loss, because typically that's going to generate some water as well. Could be from a water leak from a pipe. So they're very, very susceptible to damage from water. Just to quantify that, a replacement detector in either unit can cost about 2 3rds of the cost of a replacement unit in its entirety. So if you have detectors that are affected, they're damaged. They're usually not repairable, which is going to normally equate to replacing the entire system just from a cost-effectiveness standpoint. Analytical and laboratory equipment. They have some of the same issues as far as susceptibility to temperature and humidity, although it's not as susceptible. Typically, you're going to have levels up above 90% that can affect this type of equipment, whereas nuclear cameras are typically going to have a higher susceptibility to humidity. That can affect this type of equipment, whereas nuclear cameras and CT scanners, it could be as low as 70%. By the way, I should reference that CT scanners and nuclear camera suites are kept roughly between 45% to 55% relative humidity. So it doesn't take a lot of humidity to damage those detectors. All of the equipment that you have here uses detectors as well. They function very different, obviously, than the imaging equipment. But the equipment here is analyzing either a liquid or a gas to determine what's present there. So chemistry and blood analyzers are used to detect a wide variety or wide spectrum of chemicals that might be present in bodily fluids. Chemistry analyzer can be used on anything. Blood analyzer is specifically for blood. Spectrometers and chromatographs typically take a liquid or a solid, and they vaporize that, and then the vapors or gases are analyzed. The susceptibility to this equipment is contamination to those detectors. If you get water or soot on the detectors, you're probably going to have to replace them, because that would skew any further analysis from that equipment. They're also very precisely aligned, because they're taking samples and they're moving in them, maybe from a vial to a collection area. From a collection area, then they're being sucked in through a line over to the detector, or maybe it's to the plasma chamber to vaporize them. So they're precisely aligned. And if they're moved, they can be knocked out of alignment. So you may have some calibration issues there as well. Another particular issue with chemistry and blood analyzers are any time that there is a power outage and you can't run the equipment, the reagents that are used in that equipment to help with the analysis process can congeal. They can solidify and clog those lines. And if it gets bad enough, you may have to actually replace all of the reagent and plumbing lines within a particular piece of equipment. And that can add significantly to the cost. Patient monitoring equipment can include EKG, ESAGs. Those are synonymous for heart monitoring equipment. You can have heart and lung machines. You can have pulse oximeters. Heart and lung monitors do the same thing as an EKG monitor heart, but they also monitor lung function. Pulse oximeters, as an example, measure pulse and blood oxygen levels. What all of these have in common is that they're typically smaller mobile devices. And while they're not as sensitive to other equipment to temperature and humidity, again, they can be damaged above 90% humidity levels, especially if it's condensing. And because they're mobile, they're also more prone to damage from static electricity, and more particularly from impact damage. So they get knocked over, as an example, as they're being moved around. And even if it doesn't cause external damage, it may knock some things out of calibration. And you might have to recalibrate and repair equipment. Can we throw up a poll in question number two? Sure. Which one, number? Number two. Sure. There we go. So in this one, what medical equipment is most sensitive to elevated humidity levels? And you have your choices up there. We're broadcasting the results. So it looks like we're hovering roughly about 80% for CT scanner. That is correct. All of these are sensitive to humidity to certain degrees. But again, the CT scanners, because of the type of the materials used in their detectors, are particularly sensitive to elevated humidity. So we'll go ahead. Can I end that poll? Sure. OK. I'll let you take care of that. So what are some of the risks associated, then, with medical equipment? The most common things that we see from the claims side are shown here. Water events, I think, at least in our experience, are by far the most common. They can include some very small, simple things that can end up causing a lot of damage and a lot of money. It could be a backed up toilet or sink, a ruptured water line due to freezing or during construction. It could be a faulty steam valve that causes condensation above equipment that eventually leaks down onto the equipment. These are also the most likely to lead to equipment replacement, particularly with heavy amounts of water exposure or critical components. The reason for that is water and electricity don't mix very well. So you get water on equipment, you're going to have a lot more short circuiting, a lot more components that fail, a lot more components that, therefore, need to get replaced. So from what we see, water usually causes more significant damage. Contamination from a fire is also fairly common. Fires can result from various sources. Could be kitchen fires, electrical arcing, lightning, some other related issues like that. And while the soot may appear fairly heavy on a particular piece of equipment, contamination losses, from my perspective, are easier to navigate through because there are some established processes in place to clean the equipment, remove the soot, prevent future failures from occurring as a result of that soot. Mechanical breakdown is common, but less so than the first two. You can have issues like cooling fans in a control cabinet for any of the imaging equipment that we've been talking about and mentioned previously. You can have wear and tear to motors in some of the same equipment. Human error can also cause damage. We showed a picture of an MRI gantry with impact damage from bringing a metal object into the gantry room. And we also see quite a few claims involving damage during transportation. OK, it looks like most of these answers are trending towards water. We have over 95%. Yeah, that's, in our experience, we see more water claims end up leading to replacement of equipment. Transit can be fairly significant as well, depending on the extent of damage. Some of it can be very minor, though. So here's just a few facts that we've pulled from the US Fire Administration. The source is cited at the bottom right hand of the slide. But there are about 2,500 fires in medical facilities every year. 89% of those are in hospitals. Of those fires, 20% originate in the kitchen. That may not seem like much of a surprise. And typically, they're very small fires. Only 6% of all hospital fires or medical facility fires actually activate the sprinklers based on that survey. So I'm going to turn it over to Bob. Great, thanks, Mark. Appreciate the overview of the equipment. Now that we all kind of have an idea of the types of equipment that we're talking about, we'll spend a few minutes just talking about some of the underwriting considerations that we need to evaluate when we have these risks before we look at some of the case studies and claim scenarios. So some of the things we're going to talk about is where is the equipment. Certainly, where it is is going to have a key factor or play a key role in how we underwrite it. We'll talk a little bit about the valuation issues that we need to be aware of on the underwriting side as we underwrite these accounts and price them. Obviously, we'll get through some of the key exposures to the equipment, some of which were talked throughout the description of the equipment piece, but we'll tie it into the underwriting side as well. And we'll talk about some time element issues and the impacts that this equipment has on our business income and time element results. And then ultimately, we'll wrap it up with some key underwriting questions for you to take away. There's three different places that we might have some equipment. It might be permanently installed on a location. It might be mobile in nature, or it might just be in transit and waiting to be delivered. So Eileen or Lillian, can we pop up the second polling question I had, the multiple choice one? Sure. All right, so where might you find medical equipment? Would it be a college university, an office complex, a strip shopping center, or all of the above? I noticed a few people are being swayed by the majority of the crowd and changing their answers from individual items to the all of the above. But that's right. It is really all of the above. Certainly colleges and universities are going to have medical equipment on site for their students. And then when we get into some of the doctor's offices or specialized clinics, those are going to be anywhere in an office building or even a strip shopping center. The place where I get my hair cut is right next to an outpatient clinic. So there's all kinds of medical equipment and patients coming in and out as I'm getting my hair cut, which is right next to a convenience store. So it really runs the gamut in that location of types of exposures. But really anywhere where there might be a doctor is where you're going to find this type of equipment. So when we have permanent locations, obviously some of the key things to understand is what is it that we're covering? What type of equipment do we have and what's the variety of equipment? As Mark explained in the first part of the presentation, medical equipment is a pretty broad topic and really contains equipment from EKGs and pulse oximeters, the little thing that goes on your finger, all the way up to giant MRI and CT scanners. So what are we covering at the location? And we should look to see if we can get a schedule of the equipment. And one of the things that you want to look for in that schedule of equipment is redundancy. Do they have multiple pieces of equipment that do the same thing? And hopefully they do, and so that might help to mitigate some downtime if they have an issue with one of the pieces of equipment. But it also offers them an opportunity to take equipment offline to maintain it while other equipment is being used to supplement the schedule. So the redundancy not only helps you in the event of a claim, potentially, but also may help you to prevent a claim if they can take equipment offline for maintenance. Where is it in the building? A lot of times, as we saw with some of that really big equipment, you need to put the MRI machine or the CT scanner in an area of the building where you can get access to it. So from a delivery standpoint or from a billing standpoint, that is going to be oftentimes on the lower levels of the building. And as Mark indicated, one of the key exposures to medical equipment is water. So if your imaging equipment and your large, complex machinery is in the lower levels of the building, obviously any impact to water above that will cause potential damage to the imaging or medical equipment that's on the lower floors. We had exactly that kind of a case where we had a big piece of equipment being damaged because the office, the suite above them, had a water pipe issue and the pipe broke in the ceiling and all that water came down onto the medical equipment, causing major damage to the equipment. So knowing where it is in the building is important. Also, you know, if things are on the first floor and you happen to be in an area that's a low-lying area, you're also potentially susceptible to either flood or maybe backup of sewers and drains or surface water events. So again, understanding where in the building is going to help to identify what other issues might need to be mitigated to prevent water infiltration and water damage to the equipment. You know, again, when you look at some of this equipment, you know, how easy is it to replace? You know, a lot of times you can't just call up the local medical supply company and get a new MRI machine. So when that does go down, how quickly can we get a new one? And what does it mean? Can we actually get it into the building? Do we have to remove walls? Do we have to have things brought in through the roof? How do we access the equipment to replace it? You know, all of that type of information and details are going to help you to understand in the event of a loss how complex is that loss going to ultimately be. So, you know, we may want to, again, increase deductibles or maybe increase rates or, you know, in other ways to help them mitigate the exposure or mitigate the exposure to the policy. And then, you know, do they have a plan for when the equipment goes down? A lot of times, you know, as Mark indicated, the bulk of – or not the bulk, but a lot of the income to major hospitals and certainly the bulk of the income to, you know, specific clinics could come from the use of that equipment. So when that equipment goes down, they're literally losing money minute by minute. So what is their plan if they were to have a major impact or a major piece of equipment impacted? How do they expect to continue their operation? Do they have multiple sites where they can redirect patients to cover them maybe in off hours? Do they have a reciprocal agreement with another clinic where they might be able to send patients at a – and split the cost or, you know, some other way to keep their patients and keep their business going while they recuperate from a loss? And a lot of times that's, you know, going to be very difficult for them to articulate ahead of time, but that's one of the things that you want to look for. So I talked about, you know, mobile equipment. You know, there's some equipment that is mobile in nature. There are some operations that are mobile in nature. So you may have a mobile MRI machine where it's, you know, on a trailer, on the back of a truck, and it drives up to various clinics, and each day of the week they're at a different clinic or a different outpatient facility providing those kinds of services. So how has that equipment been modified to be in motion? You know, Mark indicated on some of the equipment the complex movement and moving parts that go into the equipment. How is that able to withstand the internal shuffling of being on the road, you know, hitting potholes, stopping and starting, making turns? We're not even talking necessarily about collision at that point. So how is that equipment protected while it's in motion? Who's responsible for driving that equipment? A lot of times if it's equipment that's in the back of a box truck or in a modified trailer or a modified mobile home, it may just be the technician of the equipment that's driving it. And, you know, how qualified are they to drive such a big piece of equipment, and, you know, do we have – you know, do they have the appropriate licensing? You know, is a commercial driver's license needed of a certain size? What kind of training is provided? So how is that, you know, responsible? And if it's a third party, what kind of insurance do they have? What kind of experience do they have? So understanding how that piece of equipment is getting from site to site is important. And a lot of times with mobile equipment, it could also be that the equipment is loaded onto the back of the truck, taken to a site, unloaded, used at the site for the day, loaded back up onto the truck, and taken to another site the next day. So you've got a lot of loading and unloading exposure, you know, and is there appropriate equipment to handle that at the various sites? You know, not every location will have a loading dock. Not every location will have access to a ramp or a nice, smooth transition from outdoors to indoors. So how is that managed so that the equipment stays upright, makes it into the building, out of the building, and back into the truck without damage? You know, this equipment is pretty expensive. So one thing you also want to understand is where is it stored when it's not in use? If it's a mobile trailer, for example, how do they store that trailer to ensure that it's going to be safe overnight? You know, if it's emblazoned on the side with the logo of the company, that it's a mobile MRI or a mobile medical unit, you know, is there an attractive nuisance there where people might think there might be medicines or drugs stored on board? And so they try to break in, and then, you know, if they find it, they steal it. If they don't find it, they, you know, vandalize it. So understanding the security of the equipment when it's off-site or even when it's back on-site but in a mobile trailer or some other type of equipment, how is that secured to prevent loss overnight? You know, oftentimes we'll see on mobile MRI machines, especially mobile MRI suites, they'll take a chassis of a mobile home, and they'll convert it into a mobile MRI suite. So there's a real difficult time to separate the equipment from the chassis. So is there, you know, are we getting the true value of the equipment and the chassis all together? Is the chassis somewhere else, insured somewhere else? So how do we, you know, make sure that – or one of the things we have to make sure is that we understand truly what is being asked to be covered, because a lot of times they'll – you know, you may be assuming that it's just the mobile equipment, just the MRI machine, when in fact we're being asked to insure the entire mobile unit, including the chassis and the office chairs and the computers and everything else that's used in that suite. So when it's mobile, you know, one of the key things that's going to help you understand what your true exposure is, is understanding how far does the machine go, or how far does the truck go. You know, if it's operating on a daily basis, but it's always staying within the local town, you know, that might be certainly one set of exposures. But if it's serving a, you know, multi-state radius or a multi-county radius, well now you might have a little bit more of an over-the-road exposure, where your typical auto and collision issues are going to come into play, and obviously that can severely damage the equipment if it gets run into by another vehicle, or the truck overturns, et cetera. You know, it's one thing, as Mark indicated before, if a machine on the floor is being wheeled around and it drops over, it's another when it gets, you know, rammed into by another moving vehicle. And then I mentioned, you know, do we have any medicines on board that might be an attractive nuisance to, for theft or vandalism? You know, with transit, you know, we're really talking about the delivery of equipment, or the moving of equipment from one site to the next, and it's really more of a one-time deal or a relocation deal, as opposed to we're taking something that used to be affixed permanently in a building, and we're turning it into a mobile exposure. So for transit, we have a lot of similarities between the mobile exposures that we do for transit, but we also have a little bit more exposure here, in the sense that these are generally going to be one-time deals or, you know, maybe a couple times a year, so there's a level of uncomfort or a level of inexperience that might be associated with these types of risks, because they don't happen every day, unlike a piece of mobile equipment. So for transit, you know, when you're moving a piece of equipment, or even having a piece of equipment delivered, you know, who's responsible for driving that piece, making that delivery? You know, is it a reputable motor carrier? Do they have experience with medical equipment to ensure that it's properly braced and properly secured to prevent movement and to prevent internal derangement? You know, when we get into, you know, the delivery mechanisms, again, if we go to a hospital, typically we'll have a proper loading dock where a tractor-trailer can pull in and offload a piece of equipment in a pretty smooth transition. They're going to have a lot of, you know, material handling equipment to be able to, you know, to use a forklift or a pallet jack to help move the equipment around. You know, but if we go to maybe a clinic that's in that strip shopping center, you know, do they have the same type of facilities, or now do we have to somehow figure out a way to maneuver a large piece of equipment off the back of a tractor-trailer and bring it down to the ground level before we can actually bring it into the building? You know, is there anything, is that area protected? You know, again, if you go to a hospital, they're going to have a nice loading dock, most likely it's covered, protected from the elements, but again, when you go outside of that large building, you might not have that same exposure. So again, water, wind, dirt, you know, all of that kind of exposure, you're now exposing that element, that equipment to the elements. So who's responsible for maintaining or performing those responsibilities of loading and unloading and securing the goods and making sure that, you know, they're not damaged during that process? You know, again, not all the equipment is going to have wheels, not all the equipment is going to be easily transferred or carried by a couple of individuals, so do they have the appropriate, you know, material handling equipment at both ends of the journey, whether it's loading the truck to begin with or unloading it once it gets where it's going? You know, one of the key things that we rely on from an underwriting standpoint when we look at transit are pre- and post-delivery surveys. So you really want to make sure, at least externally, I mean, if we can get it plugged in and make sure it's working before it gets on the truck and see exactly when it comes off the truck how it's working, that would even be fantastic, but most of the time, we're limited to an external survey. So kind of like when you get that rental car, right? You get the equipment, they walk around the car, they identify where there's dings and scratches, et cetera, and then when you bring it back, they again walk around the car and identify where there might be new dings or new scratches. Well, you want to do a similar thing when you're moving heavy equipment or medical equipment that's, you know, certainly high value in nature, because if you have an external evidence of damage, there's a good likelihood that there could be some internal damage. So having those pre- and post-delivery surveys could be really beneficial to help you understand where the event occurred. And then, again, as Mark indicated earlier, there's a lot of this equipment is going to be not only temperature, but humidity, and again, you know, tilting, all of those types of, you know, sensitivities. So is the equipment equipped with any monitors or is the truck equipped with any monitors to identify when the humidity levels exceeded a certain number or the temperature was outside of the prescribed range or the equipment was tilted by too many degrees, again, to give an indication that while there might not be external evidence of damage, there could be very real internal damage that needs to be explored. So how do we value this equipment? You know, are we doing it on a replacement cost? Are we valuing it for actual cash value? So oftentimes, the policies are going to be written on a replacement cost. And the problem with that, as Mark indicated earlier, too, is technology. Technology is ever-advancing on these. So if I buy a new piece of equipment this year and I have a loss in two years, am I going to be able to get a comparable piece of equipment or will technology have exceeded beyond what my original equipment was and what's the cost of that technology two years from now versus what I'm insuring for today? Sometimes we'll use ACV, especially for older equipment or outdated equipment, where we know, look, at the end of the day, we're not going to be able to replace this piece of equipment. So, you know, we'll settle it on an actual cash value basis because we know it's just too old. You know, when we look for appropriate replacements, will like-minded quality even be available? Again, machines, technology increases. Repairs are not generally, you know, most people probably don't want to go into a refurbished MRI machine or a refurbished CT scan. So, you know, is that even an available option for folks? It might not be. You know, then we get into repair. Do we repair it or do we replace it? You know, repairs are oftentimes what we look to do when we insure property. When it comes to medical equipment, what does that repair do to the warranty? What does that repair do to the effectiveness of the machine? Is it a repair that can be warranted and not, you know, and not potentially impact the future ability to use the equipment? You know, or does the nature of the repair, excuse me, does the nature of the repair and the impact on the warranties and such necessitate a basic replacement instead of the repair? You know, again, new versus restored. Is restored equipment an option? For some, you know, some equipment it might be. For other equipment, it might not be. So understanding what type of equipment it is, how sensitive it is, and how important it is to the entities that are operating it. And again, a lot of common sense goes into that, right? If you needed equipment, or you needed to have an MRI done, or a CT done, or some other type of test done, what would your comfort level be if you knew that that machine was refurbished versus new? And as Mark indicated, there's a lot of stakeholders in these medical operations that are gonna weigh in on that fact. So it's not just the doctors and the technicians, but it's the administrators, et cetera. So a lot of stakeholders on that. The advanced technology is going to impact your ability to even salvage the equipment at the end of the day. If it is a total loss, is there any salvage value in the equipment based on current technology? So again, in a typical property world, right, we would suffer a loss, and if we determined it to be a total loss, we would look to see is there any salvage in the metal, is there any salvage in the parts? But when it comes to some of the technological advances on medical equipment, that salvage opportunity is gonna be minimal. And then a lot of this equipment is very expensive. So oftentimes you might find that the equipment is leased instead of actually owned. And so now are there additional responsibilities or additional obligations put on the user of the equipment in the event of a loss to make sure that the lessor is made whole in the event the lessee damages the equipment? So there might be additional valuation issues associated with leased equipment as opposed to owned equipment. So some of the exposures and perils, and Mark alluded to this towards the end of his first part of the discussion. Most of our policies are written on an all-risk basis, so it's all risk except that that's excluded. But sometimes there are policies that are written for specified perils. Sometimes you might see that with some of the more complex equipment. Mechanical breakdown is often available for the sudden and accidental mechanical breakdown. So it's really important to understand if we're offering mechanical breakdown cover, what is the maintenance schedule? And again, do they have that redundancy to allow for them to take the appropriate time to perform the maintenance on the equipment to make sure it stays in full operating capacity? Again, water is a key thing to equipment. Some of it is gonna be able to get a little bit wet or a little bit dirty based on the nature of the equipment, but in reality, the equipment is sensitive enough that it really needs to stay dry or within prescribed ranges. So certainly water is a major issue, as well as contamination. When we talk about recalibration, that's an interesting issue because a lot of this equipment is gonna need to be recalibrated if it gets damaged. But what if it doesn't get damaged and it needs to be recalibrated? Is that a loss? And most policies would not cover straight recalibration unless you can determine that there was an external cause of it. But again, understanding how they maintain their equipment will help you understand if they have an exposure to this. A company that doesn't maintain their equipment and just waits for it to crash and burn is probably gonna have more chance of submitting a loss to the insurance carrier than a company that actually maintains their equipment well and makes sure that it is continuing in optimal conditions. So from a time element perspective, how does this equipment and this type of property differ from standard, a general office building or a production line or something like that? One of the key things is, do they have parts available to make the repairs if the repairs are even able to be made? Sometimes, again, large hospitals may have equipment on hand because they know that they're going to have, excuse me, regular breakdowns or things where they're going to have to repair parts and replace parts. But again, that small clinic, that outpatient dialysis clinic, that outpatient imaging company may or may not have the same level of redundancy or parts available to them. And what's the lead time for new equipment? I mentioned before, a lot of times it's not as easy as just going and finding a new piece of equipment at the medical supply store. If I need a new MRI, a new CT, a new X-ray machine, how readily available is that equipment? Is it something that I can order from another company and have it shipped within a short period of time? Or is it something that has to be manufactured and I have to wait for the manufacture process and then get it shipped? Is the insured running at 100% capacity? That is a key question and one that you'll really want to understand because if they're operating at 100% capacity today and they suffer a loss, well, they're not able to make that up. So it's going to be a business income loss most likely. And so understanding what their capacity is around their operation is important. I had one client with a multiple location outpatient imaging locations and we had a loss to one major piece of equipment at one location. But since they had literally a dozen other sites, we thought we would be okay and we'd be able to route patients to different sites. The problem was all of their sites were operating at 100% capacity. So there was no real opportunity to squeeze new patients in and prevent or minimize some of the business income or time element loss. So understanding their capacity is important even if there is redundancy in the equipment. And again, does the insured have any local reciprocity agreements that can help them at least mitigate a loss, maintain their patients, keep their patients, serve their community in a way that would ultimately allow or make the patients want to come back to them when they get operational again. So just a real quick summary of the underwriting section and really these slides were all intended so that you can tack them up on your wall or put them in a binder. And when you get a piece of a medical equipment or a medical exposure, you can kind of pull them out and think about some of these key questions. So again, where is it and how is it being used? Is it gonna be able to be repaired and replaced or are we gonna have to just go get a new one and how long does that take? If we're moving it, who's gonna really make sure that that stuff is stable during the move, during the loading, during the unloading and make sure that it's not being dropped or unnecessarily jostled around in the back of the truck. How do they derive their income? How much of their income is derived from the equipment itself? And what happens when that equipment is down? What is their plan? Do they have a plan or is it just relying on the insurance? And then how do they maintain and operate the equipment? You really wanna make sure that the folks that are maintaining it do so on a regular basis that they make sure that there's good, consistent power supply so you're not getting surges and spikes or losing power to the equipment, making sure that the technicians are properly trained to use and set up, et cetera. So hopefully this provided you with some good underwriting questions and some things to think about as you take a look at medical equipment. And I guess before we head over to the next section, we're going to have a quick Q&A stop. So Eileen, you wanted to type into the box, is that the plan? Sure. Here's the question pod. So if you have a question for either presenter, just type it into the text box and click the balloon icon next to it. Happy to address. I guess we should have had a polling question here before we put up the Q&A to see how many people are still awake. We didn't actually ask that polling question, so. Here we go. We have one question from Phil. How much do MRI or CT scans increase on an annual replacement call basis? I'm assuming that's referring to the cost of a new piece of equipment. Bob, did you have any comments on that? No, I was going to actually see if you had any on the claim side, what's been your experience lately? Yeah, I mean, I think as a general rule of thumb, you're going to see things probably start to increase at about 5% a year cost-wise, but you're going to see big jumps in price increases as new technology is released. So as an example, CT scanners are rated on the number of slices or the number of individual images that make up the final images. So the more slices you have, the better the resolution. So now they're up to 256 slice CT scanners. So when there is a jump from 128 slice to the 256, you're seeing price increases more significant than 5%. They could be 10, 15%. Okay, thank you. Here's the next question. Are there moisture detection systems readily available to recommend since water is such a peril? I guess I'll take that one. Most of these suites, if you're dealing with an MRI, CT scanner, nuclear camera, and the like, there are things that you can buy. Yeah, you can buy just a little humidity detector, temperature and humidity detector for $15 and just stick it up on a wall in a room. More sophisticated rooms are going to have, they should have some humidity and temperature detectors and loggers that'll log those in the equipment room itself. So yes, there are things that are in place. We do utilize those when I go in and analyze a claim to determine what the humidity levels were. Okay, we have another question. How are these exposures increased in medical research facilities? So I think with medical research facilities, part of the issue there is, the research nature of it is, you potentially have people that aren't always 100% skilled or trained on how to use the equipment. It might be in an operation or in an area of the building where it may be more or less susceptible to certain types of exposure, some certain types of dust or debris, that kind of thing, depending on how the ventilation system is structured. Sometimes the equipment is maybe at a lower technological level because they try to use it for longer because they don't have money to get a new one. And so when it goes, it causes a problem if the law is trying to replace it. I think medical research facilities, if they are, if it's a contractor, if they are, if it's a contract medical research, so it's a pharma company, then you're gonna be probably in a very similar exposure to a hospital. If you're in a medical research facility as part of a university or part of a think tank or something like that, then it might be some other things that you'll have to take a look at based on the fact that it's not in a hospital and not in a big pharma clean area. Thank you. Discounting technology changes, what is the useful life of an MRI? And the second part of that question is also what is average cost new of an MRI? Bob, do you wanna take that one or do you want me to address that one? You can take that one. Okay, you asked 10 different people what the useful life of an MRI is, you're gonna get 10 different answers. That's the short answer to the question. There's not a hard and fast rule for that. Generally speaking, technology of this nature you would anticipate due to obsolescence primarily, you'd have a useful life of about 10 years. But again, that's not a hard and fast rule. You see equipment that's used much longer than that. But then what's the cost of a new MRI? You're gonna be looking at a million two to a million five typically for an MRI. Again, there's different types, so there's closed and open MRIs. The closed MRIs are the donut type. They have the larger magnet, better resolution. Those are gonna be the more expensive than the open ones which look like two pancakes that a patient can slide in between those two disks. Not as high of resolution, not as big of magnets, therefore not as high of a cost. You may be looking at upwards of a million dollars, so 700,000 to a million. And what is the average turnaround time of repairing a piece of equipment? That's a hard one to answer as well. A lot of that's gonna depend upon what specific components are affected within a particular piece of equipment, what the age of that equipment is. I will say though that a lot of times it's a lot faster than replacement. If parts are readily available, as Bob mentioned, that's the key. You can get things repaired in several weeks to include testing, system-wide testing as well. And I don't know if anybody's asked this question, but turnaround time or lead time for replacement equipment can be as much as 12 to 16 weeks depending on availability. So, what is the cost of repairing a piece of equipment? And what is the cost of replacing it depending on availability? Is there an equipment age break where the prospect of repair or refurbishing substantially diminishes? Bob, is that you or me? I guess the question there is, do we get to a point where repair to refurbish and has to just be replaced? I guess that's the question. And I think it's gonna go back to the individual type of equipment and where it is in its useful life. As Mark said, if it's a MRI machine, it's eight or nine or 10 years old, and the repair costs and finding the parts for that piece of equipment get to the point where it's unmanageable, it might be a constructive total loss at that point. So, I think it's gonna depend on the equipment, how old it is, how long it's been used, how it's been maintained. You know, there's really not, I don't think, a hard and fast answer to that, but Mark, do you have any? There's not, and it also depends on individual manufacturers. Every piece of equipment, even though it's not made new anymore, it's a complete system, the manufacturers are gonna continue to make parts for it to have it repaired. It does reach a point, every piece of equipment reaches a point where the manufacturer will say, we're not gonna service it anymore. And they'll typically send out a letter, it's called an end-of-service life letter that says, as of such and such date, we are no longer going to support that piece of equipment. And again, that varies from different types of equipment to different manufacturers as well. Just, again, generally speaking, you know, if you have equipment that's approaching 12 years old, especially for MRIs and CT scanners, things like that, that the technology's changing a lot more rapidly than for an x-ray machine, as an example, you would expect those to reach their end-of-service life faster than an x-ray. Thank you, we'll hold the remainder of the questions until the end. Okay. I guess it's my turn to take over. This is Mark again. We have how much more time left, 15 minutes? 20 minutes? Yeah, 15. Okay, so some of these slides I'm not gonna spend a whole lot of time on. Moving forward, but I do wanna spend a little bit of time on this slide because this is a complicating factor in most of the claims that I deal with where you have medical equipment. As Bob mentioned, there's a lot of different stakeholders involved and it becomes a problem when these different stakeholders have different agendas as well. So as an example, you have hospital executives. They may be more focused on the profitability of the hospital and they wanna get their critical equipment back up and running as quickly as possible to minimize business interruption, be able to meet their debt obligations, et cetera. You may have department heads like the director of radiology that wants to use this loss as an opportunity to replace some functional but old equipment that's becoming more of a maintenance problem. We mentioned before, maybe he's received this end-of-service life letter that he knows in six months, he's not gonna be able to get this serviced anymore. So he wants to take this as an opportunity to replace it, even if it doesn't need to be from a technical standpoint. You might have risk management that's concerned about potential coverage issues. You have a leasing company that may wanna try to perform additional non-loss-related repairs to equipment to maximize or increase the resale value of the equipment, especially if the term of the lease is coming up. Financial institutions or lenders can hold up the recovery process by redirecting some claim payments and allocations if the hospital is in financial distress. I've seen some to where they've injected themselves and had to be second party on any check and they held up the checks and it put some hospitals that were performing a lot of indigent care and were therefore struggling financially put them under. And then you may have manufacturers that want to take the opportunity to sell new equipment. So you've got to balance out a lot of these differing agendas and that can cause some complexities in these type of claims. So a lot of this higher-end equipment can have service contracts associated with it. Not just high-end expensive equipment but equipment that serves to monitor patients or that's life safety equipment. The reason that this stuff has this type of equipment has service contracts really threefold. The first is has been mentioned several times especially for the imaging equipment. This is where they generate their revenues. So they want to be able to have people in place that have in-depth knowledge to repair equipment quickly rather than a generalist that may take more time to troubleshoot and figure out what's going on. So financial impacts are really important. Second thing is it does take some specialized people to do this. The people that work at a hospital, they're generalists. They don't have the knowledge to really get in-depth to perform diagnostics and repair to equipment. They can do some minor things, monitor the general functionality, but that's about all that they do. And the third is that there is some inherent transfer of liability to another party. So if the equipment fails to operate properly or misdiagnosis or harms a patient and someone else service the equipment, there's a transfer of some liability to that other party. So in many cases after a claim we do have, we see service vendors, manufacturers that hold service contracts that void those contracts. And that's done for several reasons. One could be that these companies, even though that they have some in-depth knowledge about how the equipment works, they really don't understand how contamination is going to affect the equipment, what remedies might be in place to remove that contamination and the processes to do it. They're experts on troubleshooting and repairing equipment. They're not experts on contamination and cleaning off contamination. So there's an issue there. And a lot of what we have to do is educate these people in the midst of a claim about what some of those options are and how it can be done. There's also some concerns about the viability of equipment moving forward. Is it going to work properly? That kind of stems from the previous comment where they don't have necessarily a real clear understanding of how contamination is going to affect equipment. As I mentioned on the previous slide, one of the reasons why hospitals like to have service contracts is it does shift some liability potentially to other parties. That's a concern after a claim to these companies that hold the service contracts. They don't want to have any additional liability above and beyond what they would normally have. And then there's some financial risk associated with that potentially as well. They don't want to continue to maintain a service equipment and collect on the service contract at a fixed cost of what they've normally done when now there may be a higher incident of failure. They may have to spend more money to keep that equipment running and not be able to pass that through to their customer. So there's a financial risk there. And there also may be a financial incentive mentioned before. There's an opportunity potentially to sell new equipment. So I'm an engineer. I'm not a policy expert. I'm not an adjuster. I am not an underwriter. I'm going to pose a question to you all for discussion purposes within your own offices and wherever it is. But are warranties and service contracts covered by the policy? Again, I don't know. It's a question that comes up a lot. I have some clients that say that their policy covers physical loss and damage only. Warranty is not physical loss and damage. The equipment's working. Whether or not the service contractor says, oh we're not going to warranty it anymore, that's not physical loss and damage. On the flip side, I have other clients say we are responsible to put our insured back to pre-loss condition. If there was a service contract in place before the loss, we need to have that service contract in place after. I don't know which answer is correct. It's an issue that we have to deal with a lot. And it complicates claims significantly. And it can multiply costs pretty significantly. So it may take more analysis to determine and convince a manufacturer or service contractor that this equipment is going to be viable and reliable moving forward. That they're not taking on any risk that they normally wouldn't have had. So there may be some additional engineering costs, consultative costs, laboratory fees, things of that nature. You may have to get the manufacturer more intimately involved, which is going to increase the cost of the analysis as well. You may have to end up replacing some components that may not be damaged, but are very critical to the operation. The manufacturer expresses concern. Therefore your adjuster negotiates an agreement to replace components that are maybe questionable, so that you don't have to replace the entire piece of equipment. That can increase the cost. But if you do have to replace the equipment, that's where it can get to be even more expensive. And that can increase the cost of cleaning and repair by potentially a factor of five to ten times. So, I mean, just throwing out some rough numbers and obviously there's some variability in here based on the type of peril and the severity of that peril. But a CT scanner may cost between $75,000 and $200,000 to repair after a water loss, let's say. And that's if the controls are affected on the higher end. And worst case scenario would be the detectors, but if those are damaged you're replacing it anyway. But the replacement can be $750,000 to $1.2 million. So it's a pretty significant increase potentially in costs if you can't overcome that obstacle on the warranty issue. So it is pretty important to get a handle on that. So I'm not going to spend a ton of time dealing with these next couple slides because they pertain more to how we typically handle equipment, medical equipment claims after a claim has been filed. So I'm going to, I'm just going to breeze through these. One of the biggest things we mentioned before, I know we may be sounding like a broken record, but stabilization of the environment is key. There's so many times that I walk into a facility, because we're not the first call I walk in, later there's already maybe a building consultant or a facility restoration company involved doing a tear-out after a water loss and the equipment's not covered. So now they're contaminating it with construction debris or they're not stabilizing the environment by making sure that the humidity levels are at appropriate levels. So it really is important to try to make sure that equipment is dealt with the same level of importance as the structure. And sometimes that doesn't happen. So in the development of scope, Bob earlier was talking about repairs, you know, is it possible to repair equipment? Again, that depends on the age, but if it is possible, who's going to perform the repairs? Who's determining what's necessary? Again, there's various stakeholders involved. They may have different ideas about what's appropriate. So that can impact the claim. What constitutes like-kind and quality? Again, is it an actual cash value? That's okay. If it's a 16-slice CT scanner, those aren't made anymore. But can you, if it needs to be replaced, can you replace it with a refurbished 16-CT slice? Or do you have to go with the most equivalent unit that's currently available, which may be a 64-slice CT, which probably is going to be twice the cost of a 16-slice CT. If there's cleaning that's involved, you need to have some specific, very, very specific protocols laid out for manufacturers and service vendors so that they understand what techniques and processes are available and have been performed very reliably in the past. And then also referencing various standards. On the repair side, there's various options of who can do it. You have in-house personnel. The benefit for them is they're cheap. The downside is they don't really know the equipment in the intimate detail that a service vendor or a manufacturer would, so they can't perform detailed diagnostics and detailed repairs. If you have to bring in an outside party, a third-party vendor is less expensive than a manufacturer. They have more knowledge and are more intimate with how to appropriately troubleshoot and repair equipment. Probably not to the level of the manufacturers, but manufacturers are the most knowledgeable but have the highest bill rates, which are now approaching, you know, between four to five hundred dollars an hour, so it can be pretty expensive. So there's benefits and drawbacks of each. And then you need to decide again what's necessary. Are you going to allow for some preventative maintenance and some electrical safety inspections? It may be prudent to do that. And then determining who's responsible for documenting and performing the repairs. We've kind of talked about this already, so I'm not going to really touch on that too much. On the restoration side, as I mentioned earlier, my experience is that contamination losses are easier than water losses because they don't cause the catastrophic and widespread damage that you're going to see in the short term that water will do. You can clean it off. There's techniques that have been used for years that are very reliable and proven to be so, and there's also various studies and standards that are out there that many manufacturers aren't familiar with, which is part of the education process I mentioned before, but there was a study by the Department of Energy that talks about the probability of failure to electronics after a fire. You can reference that study, and then there's also the IPC standard for electronic assemblies, which is called the J standard. It's for cleanliness for newly manufactured circuit boards, so that's one thing you can say is we can clean this, get it to a level that meets the IPC J standard for newly manufactured boards. Okay, so a couple case studies. Here's a transit loss. This was for a tomotherapy unit that tipped over as it was being wheeled into the hospital. These types of equipment are for radiation treatment for cancer patients. They're very precisely aligned. They are very accurate in the dosage of radiation that they provide. They can pinpoint the beam of radiation to about a five millimeter tolerance, so this is being wheeled into a hospital. It did not, or I'm sorry, it wasn't a hospital. It was a specific specialty cancer treatment facility. It did not have a loading dock. They were wheeling it up the front walkway. One of the wheels rolled off the walkway into the grass, and the unit is very heavy, and it tipped over and fell, so it had to go back to the manufacturer and was stripped basically down to the frame because, again, the precise alignment. They were very, very concerned, rightly so, about providing the proper dosage and then also directing the beam to the proper area and meeting tolerance, so they had to basically strip it down to the frame, test individual components, determine what required replacement, what could be reinstalled, and then they had to do complete sub-assembly testing and then complete system testing once that was done, so the cost of the rebuild for this particular unit was one point just over a million dollars. The unit was valued at about 2.6. Again, a simple, something pretty simple, that one wheel falling off the concrete onto the grass caused 1.3 million dollars worth of damage, so this one is a mobile CT for case study two. It was dropped about six inches. There was some visible damage to the gantry. There was an unknown amount of visible damage to internal components. One of the things that helped us, though, was the shock sensors were below their rated level, and this is a picture of the shock sensors here, so we were able to say, hey guys, we don't have to replace the entire magnet because shock sensors are below your rated and published levels as identified by the shock sensors here, so what we had to do was realign the current probe. We had to ramp the magnet back up. We had to reshim everything, so this shows some photographs of the unit that were in repair, so case study three, and I'm sorry I'm rushing through this, but we don't have a lot of time, so water to an MRI unit. This is water that ruptured on the third floor of a hospital. That water migrated down to the first floor and into the MRI suite. The water dripped onto the gantry and collects on the floor about up to two inches. The MRI shuts down. The air conditioning unit in that suite continues to operate, so we did have environmental controls that were still in place. The photograph here shows the MRI that was covered before we arrived. I did not want to uncover it because it was well encapsulated and we wanted to protect it from construction debris, so what were the first priorities there? As I mentioned before, MRIs are very susceptible to magnet quenches, so we wanted to maintain that cold head or that pump, that cryogen pump, so we wanted to make sure that we had stable power to that cold head so that magnet stayed in good condition throughout the restoration process to the facility. Once that's done, we ramp down the magnet. You can't just turn a magnet off. Again, there's cooling issues there, so once we know we have good power to the cold head, we ramp the magnet down, put it through its shutdown sequence, which does things in a proper order. That reduces the magnetic field and the heat. Then the gantry was powered down, standing water was removed, the suite was dried out, so those are the first priorities. Second priority is covering the unit, making sure that it's encapsulated so it's protected from construction-related activities, keeping that temperature and humidity stabilized. Then you're starting to look for individual damage to the unit itself, inspecting for water and grass inside the gantry, seeing whether we have water exposure to the magnets, etc., and then developing some protocols for what needs to be done, whether it's cleaning components, replacing some components, and then working with the service provider for that protocol to clean, repair, replace, and test it. I don't think that we have time for...oh, not done with this one. So we were able to get the gantry, save the gantry. The repairs to the unit were about $160,000 compared to replacing the unit for, you know, over a million dollars. So the manufacturer or the vendor was involved in the process somewhat reluctantly, but agreed to it. We convinced them that everything was going to be okay based on some scientific data and information. So the unit was returned to service. It was working fine until a couple months later. We received a call from the director of their imaging department stating that the MRI was having poor image quality. Now both the insured and their vendor are questioning the reliability of the unit and looking at potential replacement for about one and a half million dollars. So long and short is we did some looking at some of their image quality problems, started doing some different analysis of the equipment itself, and what we found was that we had some corrosion to the RF shielding that was pretty significant. So we ended up having to cut out various sections, which are shown here on the right-hand side, cutting out various sections of the damaged shielding and then replacing that, which is in the lower right-hand corner. And then anytime you're doing work on an RF shielding, you bring in a physicist that makes sure that everything is functioning properly in regards to the shielding and making sure all your RF and magnetic fields are staying within the suite, and then checking the functionality of the magnet. But all that work was done for $75,000 and after that it worked just fine. So we don't have time for the last case study, so I guess we'll open it up for some additional questions. Thank you for an excellent presentation. It was very informative. All attendees will receive an email with a link to an electronic survey. Please take a moment and provide feedback to IMUA. If there were several people at your location, please forward the link to them so they may also provide feedback. On behalf of IMUA, I'd like to thank Bob and Mark for a very comprehensive presentation. Thanks also to you for your participation and your interesting questions.

Medical Equipment 101

Underwriting

Claims

Equipment Location

Redundancy

Water Damage

Mechanical Breakdowns

Equipment Variety

Downtime Plans

Vulnerabilities

Transit Medical Equipment

Risk Mitigation Strategies