With air conditioning no longer a novelty in the UK, Thomas Howe argues more care needs to be taken over refrigeration issues.
Not so long ago, air conditioning was relatively rare in the UK but over the past 20 years it has become much more widespread for a range of reasons. Nowadays we expect it in our cars, want it at work and often bemoan the lack of it on public transport.
But air conditioning and refrigeration play an essential role beyond keeping humans cool, calm and collected. For pharmaceutical companies, food retailers and companies with climate-controlled server rooms critical to their IT infrastructure, it is a vital business function that, with proper care, should give long and reliable service. As older buildings are retrofitted and new buildings are built with central air conditioning, business exposure to this equipment will increase.
Because air conditioning is still a relative novelty in the UK — and because refrigeration plant is frequently taken for granted — there is often a lack of awareness about the importance of proper maintenance. So, it is worth looking at examples of what can happen when systems are not properly maintained.
On top of maintenance
In May this year, a major UK mobile phone network suffered an air conditioning failure, which caused a server room to overheat, resulting in a network outage of its mobile and broadband services for several hours. Fortunately, this was not at a time of peak demand so the consequences were not insurmountable.
Less fortunate was the cold store operator that, due to incorrectly set equipment, ruined a consignment of pears with a value of £200 000 bound for a major supermarket chain. Because pears are seasonal, a batch that large, once destroyed, was irreplaceable — meaning the supermarket could not sell pears for a large proportion of the season.
Obviously, in this example, refrigeration is a core part of the businesses offering but, as the mobile phone network experience shows, even for businesses where air conditioning is not part of the main product, ensuring systems are properly maintained is equally vital.
There are also some sobering health reasons why companies operating air conditioning systems should stay on top of their maintenance schedules. In the current economic climate, it would be all too easy for clients not in the refrigeration business to think that skimping on maintenance would be a safe bet. However, in many office air conditioning systems the chemical coolant used, if released, would escape in an unpleasant and potentially toxic aerosol form that workers may inhale. Proper maintenance is crucial here, particularly when smaller units are used or where retrofit systems are installed in older buildings.
Depending on the system there will be a regular requirement for key components to be cleaned and sterilised to prevent a build up of algae. This can, if left unchecked, lead to the formation of bacteria which can then promote the formation of Legionella — a potentially fatal form of pneumonia. Central air conditioning systems and particularly their cooling towers are one of the primary sources of Legionella. While this may sound extreme, it is a major issue particularly in hot weather precisely because the incubation period for Legionella is incredibly short — in the right conditions a matter of hours.
It is also worth noting that certain refrigerants used in cooling systems, such as ammonia, pose particular hazards. Although it may sound obvious that systems using a hazardous chemical at their core must be correctly maintained, in one case ammonia escaped where a valve failed leading to the tragic death of a worker as a result of direct exposure to it.
These examples are hard-hitting but serve to underline the need to take proper care of such systems. There is often a remarkable complacency and ignorance surrounding air conditioning because it has become commonplace only relatively recently and because it is perceived as low tech. People equate it with their refrigerator at home, which is something that is forgotten about once it has been plugged in.
In less dramatic scenarios, systems that are not adequately maintained will inevitably become increasingly inefficient. If air intakes, heat outlets and heat exchangers are impeded because a unit is poorly situated or because dirt, dust or algae have been allowed to accumulate, it will have to work harder.
This can easily increase the operator's energy bill and, in an office setting, because the system is not fully effective, decrease workers productivity. These inefficiencies are exaggerated in hot weather and, in the medium to long term, the additional stress on plant that has to work harder to maintain the same temperature will cause premature failure.
One recent claim involved a small confectionery company with a machine that made ice lollies. Halfway through a cleaning cycle, when the machine was full of water and cleaning fluid, the refrigeration system malfunctioned and switched itself on, causing the liquid to freeze and the moulds to crack. These were not easily replaced items, so had to be remanufactured. This was during a hot weather spell, which serves to highlight the vulnerability for businesses that are seasonal.
Commonly, small shops or mini-supermarkets will be reliant on refrigeration to keep foodstuffs and alcohol cool. Obstructions such as stacked boxes in front of low level grills can cause issues, and malfunctions that cause temperature drops can, in some circumstances, be as damaging to food as an increase in temperature.
It is crucial, therefore, that operators supplement manufacturer or supplier servicing with their own checks and stick to advice about regular cleaning, operating guidelines and user maintenance specified by the manufacturer or installer.
So, for brokers with clients that have any reliance on air conditioning and refrigeration it is definitely worth helping them understand what their exposure would be if a system failed. During the summer months, even those with equipment breakdown insurance may have longer downtimes than they might imagine. In hot periods when breakdowns spike, delays are inevitable when parts, like the ice lolly maker, have to be made from scratch or sourced overseas. Also, once the parts arrive, finding an engineer to fit them can be difficult at a time of high demand.
Prevention then, through maintenance, is definitely better than cure. As the UK becomes ever more reliant on refrigeration and air conditioning for a whole host of business-critical reasons, there needs to be better awareness of the consequences of poor maintenance if its proliferation is to continue without issue.
Thomas Howe is chief underwriter at HSB Engineering Insurance
- Top 100 Insurtech: Quarter four update
- Roundtable: Is a single customer view taking off in insurance?
- I work in insurance: Stephanie Horton, River Canal Rescue
- Charles Taylor bolsters liability team by hiring senior sextet from Vericlaim
- Travel insurtech Pluto begins beta test
- Insurtech diary: Getting stuck into insurance
- Gallagher Bassett acquires claims management firm