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Avoid Damage To Underground Installations - A Great Tip!

Posted 1/2/2003

"One of the more common damage claims we see in our national insurance program is damage to fixtures and utilities buried underground on member-consumers’ property."

By Dean B. Wisecarver

One of the more common damage claims we see in our national insurance program is damage to fixtures and utilities buried underground on member-consumers’ property. Damages to septic tanks and access covers, leach field piping, water and well head lines, as well as actual utility lines such as telephone, gas, and sewer, are common. Sometimes these claims arise from the cooperative’s trucks maneuvering on the member’s property and sometimes they arise from actually digging into the underground installation.

I discovered a very simple agreement that one Texas utility has been using for some time before they will send employees onto a member's property. Prior to doing any of such work they secure a signed agreement intended to put the responsibility for finding and marking all these underground installations on the members themselves. The manager I met with there told me they have really cut the frequency of these claims since they initiated the new agreement.

The utility calls the agreement “Existing Underground Utility Agreement” and they require a signed copy from every new member-consumer, plus they require the agreement from existing members before they will come onto the member’s property. The agreement is printed on their letterhead and the simple text is as follows:

Property owners will be responsible for locating and visibly marking all private underground utilities (including but not limited to water, telephone, sewer, and gas) prior to the construction of any electric facilities by [Cooperative’s Name]. Any damages to unmarked underground utilities by [Cooperative’s Name] will be at the property owner’s expense and responsibility to repair.

There is then a place for the property owner’s signature and the date.

The text could be revised and perhaps a few more things identified as examples, but even just as it is written here, such an agreement, used diligently, could help reduce the types of claims I referred to above for almost any rural electric cooperative.

I hope you will give this approach some thought. I suggest you discuss it with your cooperative’s legal advisers before implementing such an agreement, as I’m sure you would. The cooperative I learned this from also sought and received approval from its Board before implementing it. Considering what this approach might save, however, it seems well worth the effort to put something like this in place.

I admit, this was a new approach to me. It’s possible, however, that your company already has such a policy and agreement in place. If so, that’s great. If your cooperative has something similar you’d be willing to share with us and, through us, with other cooperatives insured in our program, please let us know. click here to send an email message.