B P Nansi talks to Pramod Bhandary,
MD, Telos Risk Management and Insurance Broking Services (P) Ltd
 Q: Let us start at the beginning. Why should a Company take Project Insurance?
A: Losses do take place during erection / commissioning / testing etc. This will happen despite best practices. So, it is prudent to take insurance
Q: What are the possible causes?
A: Causes of Losses are many. To name a few:
Fire, Design faults (resultant losses), Technical faults during start up, Erection faults etc.
Q: What aspects should be covered in the insurance?
A: Property damage of Principal, Contractors, Third party, injury liability, Workmen liability, Compliance of regulations, Copyright violations, Trademark / Patent violations, Negligence Delay, Confidential information, Act of God Perils, Transport risk within the site, Storage and handling risk, etc
Q: Who should be insured?
A: Many parties are associated in the project
Their respective rights and interest needs to be protected.
Q: What perils should be covered?
A: The following are some:
- Fire, Lighting, Implosion/Explosion
- Impact damage, collision, entry of foreign materials
- Acts of God Perils (Flood, storm, hurricane, earthquake, subsidence, landslide, etc.)
- Burglary, Theft, Larceny, Robbery / Electrical and Mechanical breakdown
- Riot, strike, malicious and terrorist damage
- Resultant damage from faulty material, bad workmanship
- Resultant damage due to faulty design (not covered under standard Contractor All Risk Policy but covered under standard Erection All Risk Policy)
- Erection faults / Transit/handling damages within the project site
Q: Are there any exclusion?
A: Yes. The following perils are not covered:
- Normal wear and tear, Loss or damage due to faulty design.
- Cost of replacement, repair or rectification of defective material and/or workmanship
- Loss or damage to files, drawing, accounts, bills, currency, stamps, deeds, evidence of debt, notes, securities, cheques, packing materials.
- Damage or penalty on account of non-fulfillment of contract.
- Lack of performance, aesthetic defects, and operational deficiencies.
- Loss or damage to vehicles
Q: What should be the sum insured, say, approximately?
A: It should include: Cost of machinery, Freight/transport charges, Duties and taxes, Cost of erection, Civil works value etc
Q: Any message for our Project Mangers and visitors?
A: For your project, do not neglect technical parameters. But do not neglect Project Insurance either. Project Insurance is vital.
SNIPPET - Better be insured than sorry Project Insurance is vital
Pramod Bhandary, MD, Telos Risk Management and Insurance Broking Services (P) Ltd INTRO - B P Nansi talks to Pramod Bhandary, MD, Telos Risk Management and Insurance Broking Services (P) Ltd |