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NTSB Searching for Clues in Hoboken NJ Transit Crash

Information about the Sept. 29 crash of a New Jersey Transit commuter train into the platform at the Hoboken, New Jersey, terminal is still scarce, as the train’s rear data recorder was recovered but not functioning, and the engineer has said he has no recollection of the accident. The crash killed one person and injured more than hoboken-station100 others during the busy morning commute.

The crash of NJ Transit’s Pascack Valley Line train #1614 was the first fatal accident of a New Jersey Transit train since 1996, according to the National Transportation Safety Board (NTSB).

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Experts at NTSB worked with the recovered data recorder’s manufactures to access data, however, “unfortunately, the event recorder was not functioning during this trip,” Bella Dinh-Zarr, NTSB vice chair, said at a press conference on Oct. 2.

She also said that investigators indicated the allowed speed on the curved area of track leading into the station is 30 miles per hour and it could have supported speeds up to 45 miles per hour. There were also no signal irregularities in the system leading into the terminal.

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The NTSB team is currently photographing the train cars before demolition of the surrounding area. Dinh-Zarr said they were also able to use a drone to capture 109 aerial images of the accident scene, paying special attention to the collapsed roof of the terminal. “This is the first time we have used the NTSB drone to document a rail accident,” she said, adding that investigators used a laser scanner to create 3-D images of the cab car and a portion of the second rail car.

The train’s engineer told investigators that his cell phone was turned off at the time and stored in his personal backpack, which is still located in the cab of the control car, and he had also conducted required brake tests prior to departure.

Witnesses have described the high speed of the train as it traveled into the terminal, renewing discussion of positive train control (PTC), which experts say might have prevented this and a number of other train crashes in recent years.
ptcontrol

“PTC has been a priority for the NTSB,” Dinh-Zarr said. “We know that it can prevent a lot of different types of accidents—train-to-train accidents, derailments due to overspeed, work zone incursions. But we need to remember that PTC cannot prevent every accident, and we just don’t have enough information yet.”

As reported in Risk Management Magazine last year, PTC is a technology designed to eliminate human error by using four components: GPS satellite data, onboard locomotive equipment, the dispatching office and wayside interface units. The system communicates with the train’s onboard computer, allowing it to warn the engineer and display the train’s safe braking distance based on its speed, length, width and weight, as well as the grade and curvature of the track. If the engineer does not respond to the warning, the onboard computer will activate the brakes and safely stop the train.

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Congress enacted the Rail Safety Improvement Act of 2008, which required each Class 1 rail carrier and each provider of regularly-scheduled inter-city or commuter rail passenger service to implement a PTC system by Dec. 31, 2015. That date had been pushed back to the end of 2018, however, to avoid possible shutdown of some railroads.

Making the Most out of a Crisis

CALGARY, ALBERTA, CANADA—Suppose your company experiences a major hurricane, tornado or fire: Property is destroyed and your business is stalled, meaning customers are left waiting.

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But there are buildings to be rebuilt and equipment to be replaced, and the claims process hasn’t even started. This is when the risk manager’s skills at placing the company’s insurance coverage and negotiating for the best payout can not only demonstrate their true value, but can put the company back on course, according to experts here at RIMS Canada’s annual conference.

“When there’s a serious property loss, this is the time for the risk manager to shine, because up until then it’s about premium, premium, premium,” Tom Parsons, manager of risk management at Fairmont Raffles Hotels International in Toronto said during a RIMS Canada Conference session. “Up until a serious loss occurs, I don’t think you feel the impact that you can give back to the company. Because what we do is buy insurance, so it has to work.

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It is what you helped craft and build into your policy through the years. You have created a policy that is robust, and that is going to cover everything—you hope.”

Among the examples cited was a soft drink bottling plant flooded with eight feet of water following a hurricane. While the company’s high-speed bottling equipment was damaged and would need to be replaced, explained Jeffrey Phillips, managing director in PwC’s U.S. forensic advisory practice, the issue was that floodwaters were highly contaminated due to a number of chicken and hog farms in the area. As a result, the company determined that the building could not be used for any type of food processing and would need to be demolished. The insurer, however, argued that the walls could be sealed, containing any contaminants. The company had found a competitor to do some of the bottling, but it wasn’t enough to fill their orders, Phillips said.

Because delivery of the new bottling equipment was slated to take months, there was also a large business interruption period being covered, he said. This is when innovation came into play. The bottling company was able to show the insurer that buying another plant rather than rebuilding would put them back in business sooner, cutting back on their losses. The insurer agreed and sent them a check. As a result, the company purchased a larger facility in a better location.

“They were up and running in six months—the business interruption had stopped,” he said. The better location also meant reduced shipping costs and the company gained market share. Because the company was able to make the case to its insurer, both came out ahead in the long run.

Phillips recommended that companies negotiating after a crisis “communicate, communicate, communicate” with their insurers.

They should also get their insurers to sign off on major contracts such as scope of work, rates and overhead and discuss changes to operations or facilities with the adjustment team and agree on scope of property damage repair or replacement whenever possible.

Insurers will typically push to return the facility to pre-loss condition, “unless you can prove the changes will save them money,” he added. “Insurers will not be creative for you, they don’t know your business or your goals.”

Small Villages Hit Hardest by Italian Earthquake

A strong 6.2 magnitude earthquake that stuck Central Italy in the early morning hours of Aug. 24 has caused about 250 deaths and hundreds of injuries. The temblor stuck 10km (6.2 miles) southeast of Norcia and 100km (62.13 miles) northeast of Rome. Areas with the most damage are smaller, older towns consisting of unreinforced masonry buildings. One such town was Amatrice, which the town’s mayor has said “no longer exists.”

Dozens of aftershocks have since occurred in the area—the strongest a magnitude 5.5. Because it was a shallow quake, occurring about six miles below the surface, it was more destructive, the New York Times reported.
Italy map

Map: USGS.gov

The vicinity of Wednesday’s temblor has also experienced significant earthquakes in the past, including one with a magnitude of 6.3 near the town of L’Aquila in 2009. According to the Times. That quake killed at least 295 people, injured more than 1,000 and left 55,000 homeless. Bloomberg reported that only about 2% of the economic loss from the 2009 quake was insured.

Catastrophe modeling firm AIR Worldwide said that Italy’s nonlife insurance market is the eighth-largest in the world and the fifth largest in Europe, and its property insurance market is the second-largest nonlife market in the country after automobile.

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Earthquake coverage, however, is often not included in standard homeowners’ policies and is typically issued as an extension of fire policies. Earthquake coverage for industrial and commercial structures may be offered for an additional premium, which varies by region.

Fitch Ratings said on Aug. 26 that it expects to see limited impact on Italian insurers. According to Fitch:

We estimate insured losses of EUR100 million-EUR200 million, arising mainly from property lines. Our estimate reflects the low density of population and businesses and limited insurance coverage in the region. Claims of this magnitude would not have a material impact on Italian insurers’ underwriting results or credit profiles.

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Italian non-life insurers wrote EUR2.

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3 billion of gross written premiums of property insurance in 2015.

Italy has declared a state of emergency in the region hit by the earthquake and the government has pledged EUR50 million for first aid. The declaration of a state of emergency means that certain losses will be covered by a state fund for emergencies, limiting losses for insurers.

We expect the insured losses to be EUR40 million-EUR80 million for primary insurers and EUR60 million-EUR120 million for reinsurers. A similar event that struck a nearby area in 2009, where the insurance exposure was higher, caused insured losses of around EUR250 million.

Planning for Extreme Floods

Flooding

Companies in the United States should begin preparing now for climate change, which is predicted to cause extreme weather conditions, according to FM Global’s report, The Impact of Climate Change on Extreme Precipitation and Flooding. As the climate warms, areas that are dry will become drier and moist areas will see higher precipitation. The characteristics of precipitation will also change. “We feel cli­mate change not so much through subtle changes in the mean, but through changes in the extremes,” MIT Prof.

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Kerry Emanuel said in the report.

While the overall amount of precipitation might remain the same, it will become less frequent but more intense.

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A specific region of the country that has historically seen 10 inches of rain each May might see the same volume that month, for example, but those 10 inches may occur in a much shorter period of time, increasing the risk of flooding, according to the study.

By the end of the century, as temperatures rise, it is possible for precipitation to change by 8%, which could exacerbate wildfires in some areas and flooding in others.

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The danger is that, because these extreme events are infrequent, they lack urgency, so planning can easily be put off. Risk managers are advised to check their facility’s resilience in terms of the building’s ability to withstand flooding, focusing on 500-year flood levels rather than 100-year.

Extreme wet or dry conditions can affect a company’s buildings, machinery, data centers, transportation networks, supply chains, people and sales. Organizations should focus on water management—diverting water from property, optimizing drainage and protecting water supplies, and they should consider new weather extremes when managing supply chains.

Flood hazard mapping is increasingly proving helpful as understanding of water risk is improving, Louis Gritzo, vice president and manager of research with FM Global, wrote in “Mitigating Evolving Water Threats,” from this month’s Risk Management Magazine. Advances in technology have led to improvements in weather satellites, geospatial data acquisition and physical model development, making old models obsolete. Anyone working with information from a flood map that is more than 15 years old should consider an update, he wrote.

Those with a flood map should make sure it includes potential coastal flooding areas as well as river flooding, also taking into account the local topography of coastal locations. “Areas along the coast that are surrounded by hills and mountains will likely experience far more wind-blown water (storm surge), as the local terrain directs more water in spaces between steeper slopes,” Gritzo wrote.