
Construction
Contact the Construction insurance team today to find out more
email usConstruction insurance
MNK Re has extensive knowledge and experience in the construction and engineering industry. We can provide bespoke insurance solutions for complex and high value projects. We can offer covers for all risks of physical loss or damage to insured property that can come about from construction or engineering activities. Cover is offered on both single projects and on annually renewable business for contractors, developers and owners. Cover can be provided on a full value or excess of loss basis, and as insurance or reinsurance.
Coverage
- Contractors all risks
- Contractors plant & equipment
- Binding authorities
- Erection all risks
- Electronic equipment
Focus areas
- Power generation
- Heavy and light industrial
- Infrastructure including road, rail and water
- Mining
- Oil and gas
- Buiilding
- Processing facilities
Geographical area
Worldwide
DSU insurance
DSU insurance or delay in start up insurance cover is used as a protection for the financial consequences of a delay to project completion arising from an insured physical damage event. The cover is best aligned with the contractors all risks insurance / erection all risks (CAR/EAR) policies covering physical loss or damage to the project. Typically, DSU insurance is purchased for the project owner. Any project financiers or lenders to the project are likely to require DSU cover where finance is on a limited recourse basis. For concession contracts however contractors may also be insured. The project owner and where applicable the project financiers / lenders and contractors under concession contracts will be entitled to claim.
The indemnity granted under a DSU policy will reimburse the owner only to the extent that they have suffered a loss. Any claim settlement will consider seasonal and market fluctuations in the actual business performance and crucially the effect of any uninsured events (such as poor contractor performance, late delivery of equipment etc) which have delayed project completion. DSU Insurance cover is triggered only by a delay to project completion due to physical damage events insured under the CAR/EAR cover.
Key exclusions
DSU typically does not cover:
- Fines and penalties.
- Non damage delays (non-performance, late delivery of materials etc.)
- Periods of insured delay concurrent with those from uninsured events.
- Delays due to redesigning, adding or improving the insured property.
- Inadequate funding to complete the project
Coverage
There are generally three levels of cover:
- Gross profit. Loss of anticipated revenue, including debt service costs, fixed operating costs as well as anticipated net profit, less variable costs.
- Debt service and fixed costs.
- Debt service only. Increased cost of working is also insured under DSU to the extent that the increased expenditure reduces the insured loss. Any indemnity will be limited to the insured’s actual loss sustained within the policy parameters.
Geographical area
Worldwide
Latent defects insurance
MNK Re provides support for latent defects insurance (LDI) which is also known as inherent defect insurance or decennial liability insurance in different parts of world. MNK Re is a specialist Lloyd’s Broker and has access of Lloyd’s Market as well as many continental reinsurance markets. Latent defects insurance or decennial liability insurance covers defects found in newly constructed properties that are discovered after the sale of the property. This potentially exposes builders, contractors, developers and financiers to potential liability claims. Latent defects insurance protects them against any such liability. Latent defects insurance includes all aspects of design and workmanship as well as other materials.
Why this LDI cover is important
A property “all risks” policy on a completed building does not normally provide protection for damage arising out of an inherent or latent defect in the building. For this reason, serious consideration should be given to the procurement of a latent defects insurance policy.
Unless cover is procured, reinstatement of any damage caused by an inherent defect in the structure or waterproofing envelope will fall to the owner’s balance sheet. The likely recourse may be against the contractor’s (or subcontractor’s or consultant’s) professional indemnity (PI) insurance policy if the defect is caused by professional negligence, not workmanship or materials. Further, there may be a liability cap under their engagement preventing full recovery. In addition, proving liability may not be straightforward, meaning a claim could take years to reach a resolution, especially if the courts are involved. If the contractor is no longer in business when the defect becomes apparent, there may be little or no recourse for the owner.
Latent defects insurance (LDI)
Latent defects insurance (LDI) also known as inherent defects insurance or decennial liability insurance provides cover in the event of an inherent defect in the design, workmanship, or materials becoming apparent in the structure or waterproofing envelope of a building resulting in physical loss or damage. It will indemnify you for the cost of the repairs to, or replacement of, damaged property and/or pay to prevent imminent further damage caused by a defect up to the total sum insured, typically the full reinstatement value.
Cover can be arranged for new buildings and significant extensions to, or conversions of, existing buildings. The policy is generally available for a period of 10 to 12 years from the date of issue of final certificate of practical completion.
The insured can be any party who has an interest in the property (normally the owner or developer) and can be required by funders or incoming tenants with an obligation to repair under the terms of a lease agreement.
Geographical area
Worldwide
Contact the Construction insurance team today to find out more
email us