Project Insurance

Project + Insurance
• What is a project? • What Is Insurance?
– One time – Risk Mgmt.
– Unique – A hedging tool
– Specific aim – Against the risk
– Bears risks of contingent
loss.

D e fin e d a s th e e q u ita b le tra n sfe r of the
risk of a loss, fro m o n e e n tity to
a n o th e r, in exchange for a p re m iu m
It is a kn o w n sm a lllo ss to prevent a
la rg e , possibly d e va sta tin g loss.
 Project Insurance
• Risk Analysis & Management are
important activities of project
planning.
• Insurance of Project Risks is a way to
transfer the risks of a project to a
third party(Insurers).
• Project Insurance products offered by
insurers are generally customized
offerings.
• The Project Insurance Market is a
 Project Insurance is
Customized
• Client-specific
• Project-specific
• Location-specific
 Project Risk Categories
• Material Damage Risks
– The material damage is the loss of
material due to a risk happening.
– E.g.: a fire takes place and some
cables are burnt and lost.
• TPLs(Third Party Liabilties)
– The third party liability (TPL) risk is
any claim that an outside party will
make on you.
– E.g.: property damage to a neighbour,
Social & Environmental Risks
Project Delay Risk Mitigation
• Part of Vendor Contracts
• Project has several parties involved
and each is a link in the project.
• Selecting vendors carefully and
holding them responsible for delays
and TPLs if it is due to their fault,
using legal contracts.
• Vendors may be asked to get
insurance too.
•
 The Cost of Insurance
• There is no cost consideration for
safety.
• Risk analysis and buying insurance
provide qualitative advantages like
goodwill, productivity etc.
• Your business sustains even if a risk
occurs.
• If you do not mitigate risks, you sustain
them.
– Can your project afford it?
– Will your project survive it?
• And, risks are serious during project
 Project Insurance Seller:
HSBC
• HSBC Insurance Brokers' services Important for Project Insuranc
• Risk analysis
We examine the risks to which the project
is exposed including physical, contractual
and delay risks and advise on insurance or
contractual solutions.
• Documentation
We analyse and provide insurance advice
in respect of the project documentation
including development agreements,
construction contracts, lease agreements
and loan documentation and where
required, assist Insurance
in writingis a legal process & requires caref
appropriate
insurance language.
 Project Insurance Seller:
HSBC
• Insurance programme
We prepare and place an insurance programme
for the construction and operation of the
project, providing protection to the project
company and contractors including the
following insurances and others, as
appropriate.
– Construction All Risks Customized offerings
– Delay in Completion
– Third Party Liability
– Property All Risks
– Business Interruption
– Latent Defects
– Marine Cargo
– Environmental
 Project Insurance Seller:
HSBCBuyers Market gets you competitive pr
• Negotiation with insurers
We negotiate competitively priced
insurances with wide cover that works
efficiently and places as little
administrative burden on the insured
parties as possible.
• Policy wording
We write project-specific policy
wordings that give the widest cover
and comply with the requirements of
the development contract, other
project agreements
Clear terms ofand the loan
risk transfer through contracts &
 Project Insurance Seller:
HSBC
Contractors are potential source of projec
• Contractor dialogue
We confirm the contractor's compliance
with the insurance requirements of the
construction contract, establishing a
dialogue with the contractor in relation to
all insurance issues and facilitating
efficient use of the insurance programme
and the claims management procedure.
• Claims management
We establish claims management
procedures and advise on the
appointment of a loss adjuster. We also
provide claims information and statistics
in any form that best meets the project
company's requirements using
Value Added our
Service Offering: POD
Internet Claims Management System.
'You are now insured against fire, flood, theft
liability, sickness, accident, death and any
attempts on my part to sell you any more
insurance.'
Thanks