The fact that a crane is counterfeit could have a serious impact on the value of the crane and hence the amount an insurer would pay.
March 10, 2016
Increased activity in the construction market also heightens the risk of counterfeiting as criminals exploit demand for plant. As well as performance and safety issues, acquiring counterfeit equipment can have serious financial implications.
An example of this is the recent warning issued by manufacturers Terex relating to counterfeit cranes. It had identified instances of counterfeit Terex/Demag crawler cranes originating from South Korea.
The counterfeit cranes, which had been assembled, branded and sold as Terex cranes, either painted white under the Terex brand or red with the Demag badge, were made from a mix of different parts, often not designed to work together. Additionally the counterfeits had poor weld quality, inferior steel structures, improperly fitted tracks and were missing many of the standard safety components. As well as posing a potential safety risk, the implications for the owner can be very serious.
“We are aware of three different ‘designs’ of the CC 2500-1 crane on the market, and there are at least nine or 10 fake cranes that have been sold, all originating from China,” said Klaus Meissner, director of product integrity for Terex Cranes. “This is a serious situation, and, not only because this infringes on our intellectual property but, more importantly, it poses a serious safety risk for our clients. The use of these inferior, counterfeit cranes can result in deadly consequences.”
This means that if it’s found to be counterfeit, either during a routine inspection, servicing or following an accident, the valuation may well plunge, the crane may not be able to be used and with finance still outstanding and needing to be paid, it could potentially put the owner out of business.
Although, in the event of an insurance claim, liability may not be an issue if the owner can show they bought it in good faith, the fact that a crane is counterfeit could have a serious impact on the value of the crane and hence the amount an insurer would pay. In addition, they would still be left with a crane that would either need to be scrapped or would require considerable investment to bring it up to standard.
To help firms reduce the risk of purchasing a counterfeit crane, Green recommends the following steps:
- Arrange a thorough inspection of the crane by a qualified engineer before purchasing.
- Ask the seller for the last inspection report.
- Check the provenance with the manufacturer.
- Remember – if it looks too good to be true, it probably is.