New Projects and Business Ventures

When new projects or business ventures are developed it is important to ensure that appropriate insurance is purchased. However, the focus is usually on pricing, policy limits, and cost-effective coverage. Nobody participating in this process wants to think of a major claim occurring!! Therefore our experience has shown that very little time and effort is spent in understanding how the insurance that is being purchased will apply in the event of a  claim, or how the claim process will impact the project itself. 

This is true even though the types of insurance purchased on a major construction project or new business venture may be very different from those that make up the company’s typical operational insurance program.

EICCM can provide the following Pre Loss Services:-

• Complete an independent review of all insurances, including proposed policy wording(s).
• Examine all aspects of the project/business venture from an insurance claim perspective.
• Advise on potential alternative insurance structures (i.e. OCIP vs. CCIP).
  
• Ensure there is an understanding within the company of how a major claim could impact the project or business venture.
• Ensure the insurance dovetails with the major contract terms and conditions.
  
• Provide a written synopsis of the insurance coverage to Contractors and others, setting out the extent it applies to them and how it relates to their contacts.
  
• Develop claim handling procedures that will help all parties understand what will be required to support claimed costs and ultimately ensure speedy collection of all recoverable costs.      

Due Diligence

Since Sarbanes-Oxley more and more stringent financial obligations are being imposed and companies must in turn apply higher levels of due diligence to purchasing of their insurance programs. It is not acceptable for CFOs to simply purchase the same insurance coverage every year without really knowing how they would handle a major claim, or the impact that a claim would have on their operations.

In order to assist in the due diligence process EICCM can provide the following Pre Loss Service:

• By working with the Risk Manager or CFO and a selected team of key in-house personnel we will be able to develop one or more theoretical claim scenarios based upon key identified major risks. Depending on the intended depth of the study, external expertise such as engineers, accountants and the insurance broker can also be brought into the team.
  
• By applying the current insurance coverage to the scenarios created, we will be able to identify any gaps and areas of weakness and possible improvement within the insurance program, as well as create reasonably accurate recoverable and non-recoverable calculations.
  
• This process will also enable the company to identify the key personnel who will have to take ownership of the claim and manage the claim process
  
• If required we can also assist in the preparation of a Claim Management Plan that will set out the key procedures to be followed in the event of a major insurance claim.