Construction Plant & EquipmentIMIA Conference Doha, Qatar 2016

By Tom WylieHead of ConstructionStarStone Insurance SE

October 2016

Contributors

2

Sponsor Mike Robertson – Liberty Specialty Markets

Chairman Tom Wylie – StarStone

Jeremy Terndrup – Willis Towers WatsonStefan Gumpp – AllianzMark Simmons – Advanta GlobalAbhijit Datar – HDFC ErgoMamoon Alyah – CEERISKJose Miguel Varela – Advanta GlobalStephen Morris - Hartford Steam BoilerJoseph Haddad – Precision S.A.LZain Hoosen – Zurich InsuranceJavier Rodriguez –Independent Insurance & Reinsurance Consultant Gomez –Insurance & Reinsurance Consultant

Contents

3

Introduction

Definition

Ownership Responsibility & Contractual Implications

Technology & Industrial Developments

Risk Assessment

Underwriting Considerations

Approach to Loss Settlement

Claims Examples

Definition

4

Construction Plant & Equipment - Equipment either mobile or stationarydesigned to perform operations related to construction and/or erection onprojects sites

Mobile EquipmentStatic/stationary EquipmentTower CranesSpecialist EquipmentTemporary Works

Mobile versus Fixed

5

Mobile Static

Self Propelled Fixed Location

Precision Manoeuvrability Rotating Axial Axis

Lifting & Handling Lifting, Handling, Provision of Power, specialists

Mobile Cranes, Trucks, Fork Lifts and Excavators, Launching Gantries, TBMs

Compressors, Engines, Generators, Tower Cranes, Re Bar Bending etc.

Surface versus Underground Equipment

6

Surface Equipment Underground Equipment

For above ground projects of any type For Mines, Metros, Sewers and HEPPs

Much may also be used below ground Rotating Axial Axis

Lifting & Handling Specifically designed for underground use

Mobile Cranes, Trucks, Fork Lifts and Excavators, Launching Gantries, Compressors, Generators etc.

TBMs, Jumbo Drills SCL Spraying Rigs

Surface versus Underground Equipment

CP&E Versus Temporary Works

7

Construction Plant & Equipment Temporary Works

Usually owned or hired by the contract parties for use on the project

Project Specific

Reused on different projects Some is reusable, most is either incorporated into the works or demolished

Separate Item of Insurance/Separate Policy

Most insured within the project value although Site facilities are often a separate item

Ownership Responsibility & Contractual Implications

Contract Agreement

Owner User

Hire Fleet Owner

Hirer/User

With/without operatorOwner SuppliedHirer suppliedThird Party supplied

8

Ownership Responsibility & Contractual Implications - Insurance

Contract Agreement

Owner User

Hire Fleet Owner

Hirer/User

Indemnity to Other Parties

9

Technology & Industry Developments

Performance

Evolutionary

EfficiencySafetyAutomationRoboticsUVAs/Drones

10

Risk Assessment

ExposuresEquipmentPhysical EnvironmentNatural HazardsSocio Economic and PoliticalOperator Training & ExperienceUsageMaintenance

11

Underwriting considerations

Annually Renewable

Equipment

Valuation and Pricing

Natural Catastrophe

Third Party

Delay In Start Up

12

Approach To Loss Settlement

Valuation Age condition

Causation

Exclusions

13By courtesy of Zurich Insurance

Claims Examples

Costs Beyond Direct Damage to the Plant

Hired In Tower Crane

Contractor responsible for insurance

Structural Steel Frame of Building Collapses

Considerable Additional costs

Think Beyond Crane Damage only

14

Claims Examples

The Case of the Red and The Blue Tractors

Difference in Hire Terms

JV contractors - Different Procuring Terms

Red – Expressly Determined by Contract

Blue – No Contract