Project Finance Insurance
The insurance requirement for projects financed on a limited recourse basis or under a private finance initiative (PFI) or public private partnership (PPP) are generally far more complex than those applicable to projects financed in other ways. Project lenders need insurance that provides the widest cover for damage to the project, loss or revenue or debt service if there is delay or interruption to the project's completion or operation due to damage and for liabilities incurred during the construction and operation of the project.
Lenders will require these insurances to include special endorsements in relation to the non-invalidation of the insurances, loss payee provisions in relation to claim proceeds, assignment of the insurances and notice clauses. Project companies need a specialist project insurance adviser, familiar with project and loan documentation, to assist them in meeting these requirements.
Project documentation and communication
We evaluate the project documents, such as the project agreement, FM contracts, other operation and maintenance agreements, the construction and the loan and security documents from an insurance and risk perspective and provide insurance language or ensure that the insurance language is consistent and achievable in the insurance market. To achieve this we expect to work closely with the lenders and their legal, technical and insurance advisers, as well as the project company and it's advisers..
Insurances
We act as the project company's insurance broker to the fullest extent in the conventional manner, assessing the risks or loss or damage and delay to which the project is exposed, examining insurance and contractual solutions. We also assess force majeure, political and other risks and determine if these are insurable.
We develop a project insurance programme for the construction and operation of the project and write policy wording specifically for the project, giving wide cover the complies with the insurance requirements of the project.
We provide insurance premium indications for budgetary purposes and prepare and underwriting report to insurers an reinsures for quotation purposes and agreement of policy wordings. We negotiate competitive premiums with the best available coverage so that the insurance works efficiently and places as little administrative burden on the insured parties as possible.
Reports, opinions and compliance
We provide reports and opinions on the project insurances and make insurance presentations to potential lenders during loan syndication. We provide confirmation that the insurances comply with the requirements of the project document, help in assigning insurance and reinsurance and provide an insurance broker's letter of undertaking to the lenders.
Claims management and reporting
We establish a claims management procedure and advise on the appointment of a loss adjuster. We provide claims information and statistics using our Internet Claims Management System in the form that best meets the project company's requirements, together with periodic insurance status reports commenting on significant issues affecting the project insurance programme.
