Case Study I - Breakdown of Turbine: Loss Amount

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Case Study I - Breakdown of Turbine

Loss amount:
‒ INR 28 Cr

Critical Issues:
‒ Gross Negligence , Design Defect, Reinstatement Details

Incident:
‒ A turbine was under planned shutdown in view of malfunctions of certain valves. Upon repair, it was
restarted and turbine could reach almost rated capacity and ran for a day. As per physical and control
room observations, one of the valves was in an abnormal opening position. To have better control, load
of DG was reduced. Still the valve could not be fully closed as it must have struck. Suddenly there was
a fire and smoke engulfed the TG room

‒ The control room activated emergency stop valves so as to stop turbine and delink generator

Incident (cont):
‒ Simultaneously, operating staff gave closing command to a steam isolation valve (electrically operated)
in front of turbine; which amounted to a manual stop of turbine. Another Turbine running by the side also
was stopped by step-down method

Aon Global Insurance Brokers | Proprietary & Confidential


Case Study I - Breakdown of Turbine
Property damaged/loss:

Part of turbine shaft and other major critical parts were broken and a piece of front shaft was severed
and thrown out of window damaging concrete wall as well. Hence a total loss
Negative points to claim:
‒ Design defect
‒ Faulty workmanship
‒ Gross negligence
‒ Consequential loss
How the claim was settled:
‒ A letter from OEM confirming the standard design, pointing out the other turbine runs and proof of
other industrial houses usage of same model
‒ Faulty workmanship: with proof that the repairs to TG Valves done by authorized men of OEM
‒ Difficult issue as the closing command which proved fatal. It made turbine break and was termed as
Gross Negligent act. Could prove it was out of panic in fire and smoke. To treat the loss as ensuing
damage
Reinstatement:
‒ Client purchased replaced turbine under forward cover. Argued as per clause it is cost incurred and
not cost paid

Aon Global Insurance Brokers | Proprietary & Confidential

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