R&R Insurance Blog

Municipalities, public schools and anyone employing "public sector" employees must complete an OSHA 300 log. The deadline is March 1 each year for public sector employers. Additionally, they are required to annually complete form SBD-10710 which is the same information that is on the OSHA 300A form. Unlike OSHA that requires completion of the log by companies that employ 10 or more employees, the Wisconsin Department of Commerce makes no distinction. Whether municipalities have 1, 100 or 1,000 employees, the log must be completed.

What is Equipment Breakdown?
Equipment Breakdown is Property coverage. It has a different title, but it is an extension to the Property form. In most Property forms you will find exclusions for losses due to steam boiler explosion, loss due to mechanical breakdown and loss due to electrical arcing (the latter is where I see the majority of claims). The intent of Equipment Breakdown is to fill those specific gaps (exclusions) for Property damage, business interruption, extra expense and consequential coverage.

Who has an Equipment Breakdown exposure?
Every insured has an exposure. If you use electricity, you have an exposure. A specific Property exclusion is "Loss due to electrical arcing." Without an Equipment Breakdown policy, if the power supply is lost because of a short, arcing, or a loose connection that causes the electrical main to disconnect or distribution of power to fail, there would be no coverage for the property damage, the interruption in your business, or the extra expense or consequential loss. If you had to temporarily relocate due to lack of power (which would affect your communication systems, heating, cooling, plumbing) there would be no coverage. Extra Expense on an Equipment Breakdown policy provides that coverage.

What Equipment Breakdown coverage is not is a maintenance policy. An example would be where rust and corrosion led to the demise of a gas fired heating blower. The unit had not been serviced in 10 years and thus no one knew that the unit was rusting away. Rust and corrosion are specifically excluded from coverage in the policy.

This question was posed by one of the LWMMI insured utility districts and the timing was perfect as the August 2009 issue of “The Municipality”, a publication of the League of Wisconsin Municipalities confirmed the response we provided. Here’s the response (slightly paraphrased) from “The Municipality”: Local governments are not subject to Occupational Safety and Health Administration (OSHA) regulations. But local governments are subject to state regulations which are at least as stringent as OSHA regulations. Although OSHA governs the private sector and federal agencies in Wisconsin, OSHA does not have jurisdiction over the state or local governments because the definition of “employer” under the OSHA Act of 1970 specifically excludes states and any political subdivision of a state. Instead, the State of Wisconsin has jurisdiction and sec. 101.055 of the Wisconsin Statutes requires that the Department of Commerce adopt, by administrative rule, standards to protect the safety and health of public employees. These standards must provide protection at least equal to that provided to private sector employees under OSHA standards.