Project Delay in Start-up (DSU)

Construction projects are often subject to a myriad of risks and uncertainties that can lead to delays in completion. These delays can have significant financial implications, ranging from increased construction costs to lost revenue from delayed project delivery. By conducting a thorough analysis of project requirements and risk factors, AMG can recommend coverage options that address the unique challenges faced by each project.

Delay in start-up (DSU) insurance coverage is a specific type of insurance designed to protect businesses from financial losses resulting from delays in the completion of a construction project. This type of insurance is crucial for companies involved in construction, or other projects where completion delays can have significant financial implications. The policy typically covers financial losses incurred during the delay period, such as additional construction costs, loss of revenue, and other related expenses.

Here is an overview of the key features of DSU insurance coverage:

Advanced Loss of Profit (ALOP) Coverage: ALOP coverage compensates the insured for the loss of anticipated profits resulting from a project delay. It covers the increased costs incurred due to the delay, as well as financial losses suffered during the postponed period.

Increased Cost of Working (ICOW) Coverage: ICOW coverage reimburses the insured for additional expenses incurred to expedite the project and reduce the delay. This coverage includes costs related to overtime wages, additional labor, equipment rentals, and other resources needed to accelerate the construction schedule.

Mitigation Costs Coverage: This coverage reimburses the insured for costs associated with implementing measures to mitigate or minimize the impact of the delay. It includes expenses for hiring consultants, temporary facilities, or conducting additional works to expedite the project.

Underwriters Information:

Project Details:

  • Comprehensive project description, including scope, location, and size.
  • Project timeline, milestones, and critical path activities.
  • Project contractual arrangements and responsibilities of stakeholders.

Project Schedule:

  • Detailed project schedule outlining start and completion dates for each phase.
  • Identification of key dependencies and critical activities.
  • Assessment of the likelihood and impact of delays on the project timeline.

Financial Information:

  • Project cost estimate and breakdown of expenses.
  • Evaluation of the financial impact of delays on project budget.
  • Financial strength and stability of the project sponsors and contractors.

Insured Value and Coverage:

  • Determination of the appropriate insured value based on the project cost and potential loss exposure.
  • Definition of coverage scope, exclusions, and limits.
  • Consideration of additional coverage options, such as advanced loss of profits or increased cost of working.

Claims History:

  • Review of past claims history and experience of the project stakeholders.
  • Examination of any previous delays or disruptions in similar projects.
  • Assessment of the project's risk profile and claims potential.

Loss Prevention Measures:

  • Review of risk management practices and mitigation measures in place.
  • Evaluation of contingency plans and emergency response procedures.
  • Recommendations for additional risk prevention strategies to minimize the likelihood of delays.

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