Insurance Arrangement and Project Finance- Offshore Project
Date : 8 Aug. 2019
Insurance Issue for Project Finance
Coverage
3
• Breadth & Scope
– Natural Catastrophe – Wind, sea storm, typhoon, seismic, flood, earthquake, seaquake…
– Fire, marine impact
– Sub limit, policy limit and reinstatement value – EML(estimated maximum loss) vs Worst case
scenario
– Sabotage & terrorism, SRCC, UXO…
Coverage
• Breadth & Scope
– Accident damage
– Machinery breakdown and Warranties – Cable Failures (installation, bends…) – Defective design, plan specification or
workmanship..(LEG2, LEG3, WELCAR defective parts clause)
– Theft risk (onshore)
Exclusions:
– Dishonesty exclusions
• Fraud, employee theft and mysterious loss
– Fundamental risk exclusions
• War and civil war, nuclear/radioactive contamination
• Pollution, asbestos, electronic date recognition
– Burden of Proof/integral defect exclusions
• LEG, Known/pre-existing defects
– Commercially unacceptable risk exclusions
• Platforms and/or structures or dumping of rocks etc.
– Inevitable damage/Maintenance issues
• Wear and tear, erosion and corrosion and gradual deterioration…
– Risks requiring specific underwriting/insurance
• Watercraft and aircraft exclusion, motor vehicles, Contractor’s plant and equipment
5
Insurance Cost Budget
Contract Review
EML /Draft Insurance
Terms
Review LIA Insurance
Terms
Road Show Arrangem
ent
Confirm insurance
terms
Insurance Policy
Complete Project Finance 8 months 6 months 5 months 2 months 1 month
12 months
18 months
Propose Financial Closed Date Nov. 2019
Conclusion
Successful Factor- Experienced Consultants should Involve in Early Stage
