BongSung 2Hydro Power Plant

Global Power Specialty

Song Bong 2Hydro Power PlantAugust 25, 2010Aon Vietnam

John Nolan, Daniel Busuttil, Fareed Imadi

PMI AGC Energy forum, DMS Debates, Kuwait City 12 June 2011

Why a Contractor Controlled Insurance Programme

Globally there are many different types of contract. Our comments are based upon the EPC type contract which is commonly used in Kuwait.

2

Contractor will have existing

insurance programmes;Workers Compensation;

Employers Liability;Plant and Equipment;

Professional Indemnity;

Etc. Etc. 3

Contractors frequently have global Insurance programmes, which may provide them with preferential terms of cover and cost over a single Project insurance policy.

Contractors frequently have global Insurance programmes, which may provide them with preferential terms of cover and cost over a single Project insurance policy.

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Contractors may have flexibility in their insurance programmes since those programmes are often arranged on a worldwide basis covering all of the Contractor’s projects.

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Contractor is the one to build the project, and control the risks on a day- to-day basis.

Contractor generally has “ Care of Works” by contract Irrespective of any insurance. If I cannot procure the insurance I cannot adequately address these risks.

6

Contractor is in the construction business on a day- to-day basis.

Owner is probably not. Contractor knows what he is doing during construction Owner probably doesn’t.

7

Contractor has full project information including method

statements and can therefore provide better information to Insurers.

8

Contractor has responsibility for

deductible and non-insured

items anyway (by contract) Let me decide how much I want to insure those risks and how much I want to

assume them. 9

Contractor will have insurance people/

department handling all insurances – “it’s an every day

part of my business”. Owner will probably not and this maybe his single “Project

of a Lifetime”.

10

Contractor will handle and is best placed to handle any insurance

claims.

Owner will not.

- Reduced owners administration.

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Contractors will price for Difference in Conditions and

Difference in Deductibles Cover if they find an OCIP cover does not meet with their normal standards

or expectations – increased insurance costs.

12

Contractors believe that their relationships with their usual Insurers and Loss Adjusters will provide them with a better chance of

recovery of their costs than from an Insurer they have no relationship with.

Contractors will already have some well established Claims Procedures that they

would prefer to use rather than being forced to change their usual working practice for

this one particular Project.

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I know what I’m doing.

If not why did you engage me?

“Don’t be a back seat driver”

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WORKING WITH CHAMPIONS