ALOP INSURANCE

WHY ALOP/MDSU INSURANCE?WHY NOT RELY ON LIQUIDATED DAMAGES

LIQUIDATED DAMAGES PROVIDE VERY LIMITED COVER.

COMPLEX FORCE MAJEURE PROVISIONS NOT COVERED.

DEBT SERVICE PAYMENTS EXCEED AMOUNT OF LDS.

INSURANCE MARKET SECURITY BETTER.

MD & ALOP COVER

Principal

Contractor

ALOP -Insurer

MD -

ALOP CONCEPTS

• THE INSURED IN ALOP IS THE PRINCIPAL

ONLY

• CONCURRENT MATERIAL DAMAGE (MD)

INSURANCE

• SAME INSURER(S) FOR ALOP AND MD

• INSURANCE PERIOD IDENTICAL TO MD

ERECTION PERIOD

ALOP - INDEMNITY PROVIDED

• LOSS OF GROSS PROFIT DUE TO REDUCTION IN ANTICIPATED TURNOVER (COVERS ALSO ANY LOSS MINIMIZING COSTS )

AND / OR

• INCREASE IN COST OF WORKING (ICOW)

• SUBJECT TO M.D PROVISO

PROJECT PERIODS

Insurance Period Max. Indemnity Period

CAR / EAR (ALOP)

ALOP

Planning Transit On site storage-handling Cold Hot Commercial operation

Construction / Erection Pre-

Test

Scheduled date of

commencement of

insured business

ADVANCE LOSS OF PROFIT (ALOP) Scheduled

Gross business

Profit s/day Commencement

Actual business

commencement

Accident Delay

Original contract period

(Original MD- ALOP

policy period)

Final contract period

(Extended MD - ALOP policy period )

• ACCIDENT NOT IMMEDIATELY FOLLOWED BY THE INDEMNITY PERIOD

• ONLY ONE CLAIM PER POLICY

• ONLY ONE TIME EXCESS PER POLICY

• MAXIMUM INDEMNITY PERIOD SUFFICIENTLY LONG.

ONLY ONE CLAIM PER POLICY

Scheduled business commencement DELAY

AccidentAccident

Accident

Accident

INSURED AND UNINSURED DELAYS

Scheduled business commencementInsured delay

Strike

Shortage of

materials

Negligence

Fire

Indemnity period

Uninsured

delay

MAXIMUM INDEMNITY PERIOD IN ALOP

Orig.

Contract period

MD-ALoP DELAY

Policy Period

Erection

& Test

Supply RoD, Erection & Test Margin

Accident Re-Supply

Schedule business commencement

Maximum Indemnity period

SUM INSURED & TIME EXCESS

SUM INSURED INCLUDES

• GROSS PROFIT

AND / OR

• SPECIFIED STANDING CHARGES LIKE DEBT SERVICING CHARGES, FIXED EXPENSES like O& M CHARGES ETC.

• TIME EXCESS

ALOP CLAIM MONITORING

ANALYSIS AND COMPARISON OF

QUARTERLY/MONTHLY PROGRESS REPORTS

WITH ORIGINAL BAR CHARTS

IN CASE OF LOSS / DAMAGE TO PLANT AND

EQUIPMENT TO ASCERTAIN :

TIME SPAN OF REPAIRSWHETHER DAMAGED ITEM IS ON CRITICAL

PATH

TIME SPAN OF REPLACEMENT

CAN ANY ACTIVITY BE BYPASSED TO ACHIEVE PRODUCTION / MAINTAINPRODUCTION LEVELS

AN EXPERT SURVEYOR TO BE INVOLVED FOR CONTINUOUS MONITORING

TO DISTINGUISH BETWEEN INSURED AND UNINSURED DELAYS

ALOP CLAIM MONITORING

CRITICAL PARAMETERSEAR – ALOP :

– PROJECT PERIOD.– MAXIMUM INTERRUPTION PERIOD.– TO INCLUDE RE-ORDERING, RE-

PROCUREMENT, LEAD TIME, RE-ERECTION PERIOD.

– CUSTOM MADE/OFF THE SHELF ITEMS .– IMPORTED/INDIGENOUS ITEMS– TEMPORARY REPAIRS/LOSS

MINIMISATION MEASURES– BASIS OF SUM INSURED:

•GROSS REVENUE/GROSS PROFIT/ SELECTED STANDING CHARGES.

PROJECT PERIOD FOR MARINE DSU

Transit Period

COD

Indemnity PeriodTesting

Planning

Erection

MARINE DSU - LOSSES

COD

RCOD

Actual business

commencement

Accident

Delay

Erection & Maximum indemnity period Testing

Transit

CRITICAL PARAMETERS

MARINE – DSU:• VALUE OF CRITICAL ITEMS PER SHIPMENT.

• WHETHER TWO OR MORE CRITICAL ITEMS

WOULD BE SHIPPED BY THE SAME VESSEL.

• WHETHER “ON “ DECK OR “UNDER” DECK.

• DETAILS OF OVER DIMENSION CONSIGNMENTS,

IF ANY (HOW THEY PROPOSE TO BE CARRIED

FROM DESTINATION PORT TO SITE)

• DETAILS OF BARGE SHIPMENT IF ANY.

Thank You