Alan Jervis B.A. Hons., F.C.I.I., M.A.E., Chartered Insurers
Member of the Academy of Experts
Project cargo often involves the transportation of large, over height, over wide, heavy or high value pieces of equipment associated with new projects and plant installations within the energy and renewable energy industries. This complex logistical process may involve multiple shipments with the assistance of cranes, break bulk or standard container ships, barges, trucks, rail and planes. Quite often, project cargo shipments are subject to specific and strict delivery time frames that are inextricably linked to project completion and penalty driven plant installation dates. Consequently, a purchaser of project cargo insurance will, quite often, also be looking for delay in start-up insurance. The latter type of cover will offer a degree of protection in the event that delays are incurred as a result of loss or damage to cargo occurring within the original insured transit.
As delay in start-up claims, in particular, can be quite costly, a project cargo underwriter will be focused on a number factors to ensure that the shipments and their handling are properly risk managed from the time they leave the supplier’s premises to the point of arrival at the project site.
The following risk factors could be considered as key to the underwriting process:
- A robust logistical planning process in place identifying shipment and estimated delivery times
- Experience and expertise of freight forwarder or logistics professional with regard to the handling of project cargo
- Packing protection
- Size, weight and value of equipment and corresponding special handling conditions
- Whether there are any transshipments involved
- Shipments to remote areas
- Barge shipments and heavy lift cargo movements supported by approvals by a competent cargo surveyor. Such surveys address loading / unloading, time and weather window
- Identification of critical parts
- Determination as to whether repairs can be carried out locally in the event of loss or damage
- Replacement times if repairs or replacements have to take place overseas
- Timelines between date of delivery and date of start-up of plant
- As with any insurance policy in general, the insurance applicant must disclose to marine cargo underwriters all information material to the risk
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