As technical experts to claim professionals, we have assembled information that we believe will help you in making informed coverage and valuation decisions on claims involving damage to high technology equipment in the wake of a hurricane or severe tropical storm.

After a hurricane or tropical storm, the potential for damage to electrical and mechanical equipment and machinery is significant. This potential increases with various factors, such as damage to the structure and exposure to the elements. Near the coast, there is the potential of major flooding from the initial tidal surge, wind-blown salt water, rain, and tornadoes. All of these issues, along with the elevated humidity and temperature conditions, can result in the rapid deterioration of equipment. If immediate action is not taken, the equipment may quickly degrade to the point were it is irreparably damaged. Responding appropriately and in a timely fashion can make all the difference. Not only will this help mitigate the loss, but it also preserves the restoration potential and salvage value.

Water can damage electronic equipment by two methods. If the equipment is energized (powered on) at the time of loss, the water can create electrical circuit paths not intended in the original design. This is generally termed "short circuiting" and can severely damage electronics.

The other hazard to equipment is corrosion, which is caused by the impurities in the water. Even when the water has dried, corrosive ions like chlorides and bromides can remain. These ions can combine with humidity to form acids, which will permanently damage electronics. Electrical items that are not cleaned could fail from this mechanism several months after the loss.

In addition to the most obvious damage resulting from water exposure, hurricanes are generally accompanied with power loss, downed lines and severe storms. In these instances, power surges, lightning surges and poor power quality, electrically damages different types of equipment.

Based on our involvement in losses caused by previous hurricanes, damage was sustained by different types of equipment in different applications including:

• Manufacturing plants: machinery and electrical controls and equipment were exposed to heavy water contamination following physical damage to the structure. Also, the equipment sustained damage when power was lost and restored without proper starting procedures. This causes artificially generated currents to affect power supplies and other components.
  
  
• Office buildings: office equipment varying from computer networks, copiers and telecommunication equipment were affected in a variety of ways:
• Water exposure
• Electrical failure caused by power surges associated with the high wind and lightning storms accompanying the hurricane
  
  
• Commercial buildings: elevators, HVAC units and energy management systems were affected when the equipment was directly exposed to water or when the electronic controls connected to the equipment were affected by water or power surges.
  
  
• Broadcasting and telecommunication: equipment used for the production and transmission of radio and TV signals were affected by both water exposure and high winds, causing significant damage. In these types of losses, recovery is of a great concern to the insured, as their business heavily depends on the continuity of their operation.

What you can do:

When you first contact the insured, you can help by advising them on steps they can take to help rescue their equipment. The following list, while not all-inclusive, can help mitigate property damage, business interruption and extra expenses when properly applied following a loss.

1) Ensure that all power to the equipment has been disconnected, preferably at the circuit breaker. If possible, use the lockout devices to prevent the accidental reapplication of power. One common mistake is to apply power to equipment to test it because it looks dry. Equipment should never be energized before it is thoroughly inspected because it can be subjected to further damage, and energizing potentially wet equipment may pose a safety hazard.

2) The equipment needs to be stabilized by moving it to a humidity and temperature-controlled environment. If the equipment can't be moved, use air-conditioning and/or dehumidifiers to lower the relative humidity. This will slow down the onset and progression of corrosion.

Ideally, humidity should in a range between 45% and 55% and the temperature should be as cool as is practical. Humidity higher than this level will not sufficiently retard the corrosion process. Conversely, some equipment, mainly electronics, can be damaged by static electricity by the dry air when the relative humidity is less than 45%.

Prior to removing equipment, keep in mind that systems may be configured for certain locations or may contain privileged or confidential information. It may be very important to record and tag the equipment with the manufacturer, model number, serial number and original location of each item prior to moving it.

3) Additional steps should be taken in order to facilitate drying. Open equipment cabinet doors, drawers and covers to allow air movement through the equipment. Next, remove water by draining or using an appropriate wet vacuum. Compressed air (if available) can also be used to further facilitate drying. Following the removal of internal water, wipe down and dry accessible surfaces to remove the remaining water. Finally, use fans to circulate air throughout equipment.

4) Immediately contact a qualified equipment loss consultant or equipment restoration specialist prior to contacting the service vendor or manufacturer. This action can maximize the probability of successful re-certification after the equipment has been decontaminated. The equipment loss consultant can also assist with the location and installation of "loaner" equipment to reduce costs. The restoration specialist can apply a preservative to mechanical equipment to further slow the corrosion process. Specialists can also establish restoration priorities based on the insured's needs and in ways that minimize downtime and business interruption. They may also elect to rinse the equipment with fresh water to displace storm-related saltwater, which is far more corrosive than fresh water.

The above actions will help to reduce the damage to equipment and also reduce the overall costs of the claim.