This document discusses project insurance and how it can help manage risks for projects. It defines what a project and insurance are, and explains that insurance is a way to transfer project risks to a third party like an insurer. It outlines different types of project risks and how insurance and contracts with vendors can help mitigate delays. It provides an example of HSBC offering customized project insurance services, including risk analysis, documentation, negotiated policies, and claims management to protect project companies and contractors. The goal of project insurance is to allow business to sustain even if risks occur through qualifying and transferring those risks.

1. Project Insurance

2. Project + InsuranceWhat is a project?One timeUniqueSpecific aimBears risksWhat Is Insurance?Risk Mgmt.A hedging toolAgainst the risk of contingent loss.Defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium

3. It is a known small loss to prevent a large, possibly devastating loss.Project InsuranceRisk 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 Buyer’s Market

4. Project Insurance is CustomizedClient-specificProject-specificLocation-specific

5. Project Risk CategoriesMaterial Damage RisksThe 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

6. Project Delay Risk MitigationPart of Vendor ContractsProject 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.

7. The Cost of InsuranceThere is no cost consideration for safety.Risk analysis and buying insurance provide qualitativeadvantages 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 projectsurvive it? And, risks are serious during project execution.

8. Project Insurance Seller: HSBCHSBC Insurance Brokers' servicesRisk analysisWe examine the risks to which the project is exposed including physical, contractual and delay risks and advise on insurance or contractual solutions.DocumentationWe 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 in writing appropriate insurance language.Important for Project InsuranceInsurance is a legal process & requires careful documentation

9. Project Insurance Seller: HSBCInsurance programmeWe 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 RisksDelay in CompletionThird Party LiabilityProperty All RisksBusiness InterruptionLatent DefectsMarine CargoEnvironmentalCustomized offerings

10. Project Insurance Seller: HSBCNegotiation with insurersWe negotiate competitively priced insurances with wide cover that works efficiently and places as little administrative burden on the insured parties as possible.Policy wordingWe write project-specific policy wordings that give the widest cover and comply with the requirements of the development contract, other project agreements and the loan agreement.Buyers Market gets you competitive pricesClear terms of risk transfer through contracts & agreements

11. Project Insurance Seller: HSBCContractor dialogueWe 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 managementWe 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 our Internet Claims Management System.Contractors are potential source of project risksValue Added Service Offering: POD

12. 'You are now insured against fire, flood, theft liability, sickness, accident, death and any attempts on my part to sell you any more insurance.'

13. Thanks