| 1. Builder's All Risk Insurance: | | | | 3. "Trips & falls & damage" - Protection |
| Usually during the contract negotiation stage, when it | | | | against injuries or property damage on premises or |
| is as yet unclear as to which party will be accepting | | | | hulls within care, custody, control of a party. |
| which liabilities, which party will be responsible for | | | | 4. Umbrella Liability - This type of liability insurance |
| procuring the insurance and absorbing the deductibles, | | | | provides excess liability protection. Your business |
| etc., both parties look more deeply into the breadth | | | | needs this coverage for the following reasons: |
| of available BAR coverage. | | | | - It provides excess coverage over all the |
| We can say that Builder's Risk Insurance for the | | | | "underlying" liability insurance carried. |
| energy class of business provides coverage under | | | | - Instead of purchasing a large limit on all of an |
| three different forms: | | | | insured's policies, this structure allows an insured to |
| | | | purchase the coverage once to sit atop various |
| 1. London Institute Builder's Risk Clauses 1.6.88 (CL | | | | policies, thereby increasing the limit for many policies. |
| 351) - or American equivalent | | | | - We recommend that this coverage provide |
| 2. WELCAR form | | | | automatic replacement coverage for underlying |
| 3. Custom forms tailor-made to specific risks or | | | | policies that have been reduced or exhausted by loss. |
| Owners or shipyards. | | | | 5. Additional coverages available for consideration |
| Is the protection provided under all BAR policies the | | | | during the construction phase: |
| same? No! For a comparison between wordings | | | | |
| please contact a trusted insurance broker of your | | | | 1. Cargo / Transit Insurance - to protect against All |
| choice. | | | | Risks of loss of or damage to the shipments of |
| 2. War Risks and Strikes, Riots, Civil Commotions | | | | material, equipment, etc. that will form part of the |
| (SRCC):a. Institute War Clauses Builder's Risks 1/6/88 | | | | construction (i.e., the topsides from Russia to the UK) |
| (CL 349) - | | | | 2. Marine Delay in Start-Up - to protect against lost |
| Coverage incepts once the vessel is launched (or | | | | profit plus extra expenses due to the delay in arrival |
| wet) and provides coverage for loss of or damage | | | | of critical components; for instance, due to thrusters |
| to the insured vessel / rig caused by: | | | | being dropped into the water during loading of vessel |
| - war, civil war, revolution, rebellion insurrection, or civil | | | | - causing a 3-month delay in project (due to |
| strife arising therefrom, or any hostile act by or | | | | back-order of specific thrusters required per |
| against a belligerent power | | | | specifications) |
| - capture seizure arrest restraint or detainment, | | | | 3. Hull & Machinery & Protection & |
| arising from perils covered above, and the | | | | Indemnity Insurance - to protect against All Risks of |
| consequences thereof or any attempt thereat | | | | loss of or damage to the vessel / rig - and liabilities |
| - derelict mines torpedoes bombs or other derelict | | | | resulting from the vessel / rig - during transport after |
| weapons of war.b. Institute Strikes Clauses Builders' | | | | completion at Yard (for instance, if delivery is not |
| Risks 1/6/88 (CL 350) - | | | | ex-Yard, but rather at final drilling Site) |
| Provides coverage for loss of or damage to the | | | | 4. Hull & Machinery & Protection & |
| insured vessel / rig caused by: | | | | Indemnity Insurance - to protect against All Risks of |
| - strikers, locked-out workmen, or persons taking | | | | loss of or damage to any vessels / crane barges |
| part in labor disturbances, riots or civil commotions | | | | that might be used to assist in the construction of |
| - any terrorist or any person acting maliciously or | | | | the vessel / rig |
| from a political motive. | | | | 5. Liquidated Damages Insurance - to protect against |
| We recommend that this coverage be amended to | | | | penalties for failure to satisfy an agreement; for |
| include Vandalism and Malicious Mischief. | | | | instance, for late delivery of unit due to losses of a |
| Please also review if the terrorism coverage provided | | | | BAR nature |
| under this clause is either restricted or broadened, or | | | | 6. Political Risk Insurance - to protect a foreign entity |
| if there are any other applicable clauses such as | | | | against loss suffered due to political risk nature |
| Sabotage & Terrorism Endorsements. In any | | | | (including Confiscation, Nationalization, Expropriation, |
| case, be sure that the coverage afforded is | | | | Selective Discrimination, Contract Frustration, |
| adequate for your Client so your Client makes an | | | | Inconvertibility & Non-Transfer of funds, etc.) |
| informed decision. | | | | 7. Professional Indemnity (PI) Insurance - to protect |
| 3. Liability - Insurance coverage that protects an | | | | against legal liability arising from any professional |
| insured against claims made by third parties for | | | | negligent act, error or omission in rendering or failing |
| damage or injury to their property or person. These | | | | to render professional services by an Assured. We |
| losses usually come about as a result of negligence of | | | | recommend that you look into the design and |
| the insured. In marine construction, this policy is | | | | engineering work and contractual requirements and |
| referred to an MGL, marine general liability policy. In | | | | track records involved in the rig, and see what |
| non-marine circumstances, the policy is referred to as | | | | protections are already in place. |
| a CGL, commercial general liability policy. The | | | | The standard requirements of both Owners and |
| construction contract should determine which parties | | | | Shipyard: |
| are liable in which instances for losses of Third Party | | | | |
| Liability nature. | | | | 1. Workmen's Compensation / Employers' Liability as |
| Insurance policies can be divided into three broad | | | | required by applicable statute |
| categories: | | | | 2. Auto Liability as required by applicable statute |
| | | | 6. Coverages available for the shipyard post-delivery |
| 1. Product Liability - Protection against a | | | | (relating to the construction phase): |
| Manufacturer's liability for injuries or property damage | | | | |
| after a manufactured product has been sold. | | | | 1. Following delivery of a unit to an Owner, usually |
| Extraordinary liability accompanies the manufacture of | | | | Maintenance & Discovery coverage is purchased. |
| a product. | | | | 2. Warranty coverage is also possible. |
| 2. Completed Operations - Protection against a | | | | What is the difference between Maintenance |
| Contractor's liability for injuries or property damage | | | | Coverage of a Builder's Risk Policy and Warranty |
| suffered by Third Parties as a result of the | | | | Coverage? |
| Contractor completing an operation. | | | | |