Managing a shutdown: Equipment layup and restart

Managing a shutdown: Equipment layup and restart | Insurance Business Canada

Managing a shutdown: Equipment layup and restart

The coronavirus pandemic has forced Canadian businesses into a coma. Starting mid-March, provincial governments across the country ordered the closure of non-essential businesses in order to prevent further spread of COVID-19. This meant many businesses had to either shutdown an entire facility or strategic parts of it, and, in doing so, they had to place lots of equipment into layup.

Improper shutdown of a facility and inadequate maintenance could result in costly repairs and significant start-up delays when Canada’s pandemic-related restrictions are lifted. To help business insureds manage their shutdowns and achieve a successful restart, RSA Insurance has prepared a checklist that runs through best practices for the four phases of a shutdown: preparation, shutting down during layup and restarting. 

Pre-shutdown preparations must include a well-defined plan, according to Yan Huang (pictured) National Engineering Manager at RSA Canada. That plan should designate knowledgeable personnel to equipment shutdown and layup, and it should include all necessary documentation (equipment design drawings, installation instructions, operating manuals, maintenance procedures and records, and layup procedures) so they can be easily accessed at restart time.

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When it’s time to shut down equipment, it’s important that businesses follow the pre-defined procedures laid out in the plan, as well as any requirements established by the relevant jurisdictional authority and the original equipment manufacturers. This goes for all electrical or mechanical machinery, including boilers, pressure vessels, air conditioning systems, generators, electrical transformers and so on.

“When you shut down equipment, it’s important to implement appropriate isolation procedures for systems,” said Huang. “That includes draining and inspecting, cleaning and flushing, switching equipment off, de-energizing, closing valves, disconnecting, blanking, and protecting equipment. Some systems like the lighting, boilers, cooling/heating and the air conditioning will need to remain energized during shutdown, in order to maintain the equipment in good shape. If businesses are not managing these things properly, they may face some problems during layup, and they may struggle to restart their equipment smoothly and successfully. That will impact the reliability of the equipment and will likely delay their restart process.”  

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Once equipment is laid-up, businesses should implement a care maintenance plan built around OEM recommendations and industry best practices. RSA Canada advises actions like carrying out routine visual inspections for corrosion and deformation of equipment, as well as periodic testing. The insurer also recommends businesses incorporate environment control to ensure things like temperature and humidity levels are appropriate, as well as equipment condition control, which measures things like moisture, pressure, leakage and other required parameters.

Restarting equipment after layup should be a controlled and calculated process, according to Huang. He told Insurance Business: “To bring a piece of equipment back into operation and up to the maximum or optimum capacity, you need a good plan. We’ve seen examples in the past of restaurants that were shutdown for a short period of time, and when they flipped the switch back on and re-energized their equipment – boom – electrical equipment failed because of startup overload and short circuit. That means they didn’t shutdown, switch off and de-energize properly. When you re-start equipment, it’s very important to load everything slowly, piece by piece, until the equipment is running smoothly. Procedures should be in place and a checklist should be developed and implemented throughout recommissioning.” 

Any insureds with questions or concerns about equipment layup and restart are advised to contact their insurance brokers. As Huang commented: “We have a great partnership with our brokers. One of our strengths at RSA is our focus on the customer. We always work together with brokers to help insureds every time they have a difficulty or they have issues or concerns. I would encourage insureds, if they have a question regarding this shutdown or regarding these tips, to approach their brokers, and then we can work together to find them a solution. We care about their continual business and we care about the reliability of the equipment.”

Brokers can reach out to RSA’s Equipment Breakdown Insurance Engineering and Risk Control Services team for additional guidance or visit