Insurance required during construction or conversion of vessels or platforms

1. Builder’s All Risk Insurance:

Typically, during the contract negotiation stage, when it is not yet clear which party will accept which responsibilities, which party will be responsible for purchasing insurance and absorbing deductibles, etc., the breadth of availability is further discussed by both parties. . BAR coverage.

We can say that the Builder’s Risk Insurance for the energy business class provides coverage in three different ways:

1. London Institute Builder’s Risk Clauses 1.6.88 (CL 351) – or US equivalent
2. WELCAR form
3. Personalized forms tailored to specific risks or Shipowners or shipyards.

Is the protection provided under all BAR policies the same? Nope! For a comparison between the terms, contact a trusted insurance broker of your choice.

2. Risks of war and civil strikes, riots, concussions (SRCC):

has. Institute War Clauses Builder’s Risks 6/1/88 (CL 349) –

Coverage begins once the vessel is launched (or gets wet) and provides coverage for loss of or damage to the insured vessel/gear caused by:

• war, civil war, revolution, rebellion, insurrection or civil strife arising therefrom, or any hostile act by or against a belligerent power
• capture seizure arrest restraint or detention, arising from the dangers covered above, and the consequences thereof or any attempt thereof
• abandoned mines torpedoes bombs or other abandoned weapons of war.

b. Institute for Construction Risk Strike Clauses 6/1/88 (CL 350) –

Provides coverage for loss of or damage to the insured vessel/platform caused by:

• strikers, laid-off workers, or people involved in a labor disturbance, riot, or civil commotion
• any terrorist or any person acting maliciously or for a political motive.

We recommend that this coverage be modified to include vandalism and malicious damage.

Please also review whether the terrorism coverage provided under this clause is restricted or extended, or if there are other clauses that apply, such as sabotage and terrorism endorsements. In either case, please ensure that the coverage offered is suitable for your Client so that your Client makes an informed decision.

3. Liability – Insurance coverage that protects an insured against third-party claims for damages or losses to his property or person. These losses are usually caused by negligence of the insured. In marine construction, this policy refers to an MGL, Marine General Liability Policy. In non-marine circumstances, the policy is called a CGL, Commercial General Liability Policy. The construction contract must determine which parties are responsible in which cases for losses of a third-party liability nature.

Insurance policies can be divided into three broad categories:

1. Product Liability – Protection against manufacturer liability for injury or property damage after a manufactured product has been sold. Extraordinary liability accompanies the manufacture of a product.
2. Completed Operations – Protection against a Contractor’s liability for injury or property damage suffered by Third Parties as a result of the Contractor completing an operation.
3. “Trips, falls and damage”: Protection against injury or property damage to facilities or hulls under the care, custody or control of a party.

4. General liability – This type of liability insurance provides excess liability protection. Your business needs this coverage for the following reasons:

• Provides coverage in excess of all “underlying” liability insurance purchased.
• Instead of purchasing one large limit on all of an insured’s policies, this structure allows an insured to purchase coverage once to be placed on top of multiple policies, increasing the limit for many policies.
• We recommend that this coverage provide automatic replacement coverage for underlying policies that have been reduced or exhausted due to loss.

5. Additional coverages available for consideration during the construction phase:

1. Cargo / Transit Insurance – to protect against All Risks of loss or damage to shipments of material, equipment, etc. that will be part of the build (i.e. tops from Russia to UK)
2. Maritime start-up delay – to protect against lost profits and additional expenses due to delayed arrival of critical components; e.g. due to propellers falling overboard during vessel loading, causing a 3-month project delay (due to back order for specific propellers needed to spec)
3. Hull and machinery insurance and protection and indemnity: to protect against all risks of loss of or damage to the vessel/rig, and liabilities arising from the vessel/rig, during transport after completion at the shipyard (for example, if delivery is not ex-Yard, but rather at the final drilling site)
4. Hull and machinery insurance and protection and indemnity: to protect against all risks of loss of or damage to any vessel/crane barge which may be used to assist in the construction of the vessel/rig
5. Liquidated Damage Insurance – to protect against penalties for breaching an agreement; for example, due to delay in the delivery of the unit due to losses of the BAR type
6. Political Risk Insurance – to protect a foreign entity against losses suffered due to the nature of political risk (including Confiscation, Nationalization, Expropriation, Selective Discrimination, Frustration of Contract, Inconvertibility and Non-Transfer of Funds, etc.)
7. Professional Indemnity Insurance (PI): to protect against legal liability arising from any act of professional negligence, error or omission in the provision or failure to provide professional services by an Insured. We recommend that you look at the design and engineering work and contractual requirements and trail records involved in the platform, and see what protections are already in place.

The standard requirements of both the owners and the shipyard:

1. Workers’ Compensation/Employers Liability as Required by Applicable Statute
2. Auto Liability as Required by Applicable Statute

6. Coverage available for the post-delivery shipyard (relative to the construction phase):

1. After a unit is delivered to an Owner, Maintenance and Discovery coverage is typically purchased.
2. Warranty coverage is also possible.

What is the difference between the Maintenance Coverage of a Builder’s Risk Policy and Warranty Coverage?

Tea maintenance coverage it is simply an extension of the builder’s risk policy, which in this case survives delivery of the vessel to the owner, with coverage no broader than that contained elsewhere in the policy, subject to all conditions and exclusions of that policy.

Tea warranty coverage it is a “contiguous” protection of the contractual Guarantee Clause of the Insured to the Owner. This means that the Guarantee Clause of the contract becomes the insurance condition of the Guarantee Policy.