Advance Business Interruption Insurance
What is it?
This insurance will protect the insured from loss of future revenue and/or increased costs that may result from loss or damage to construction works and which are insured under a contract works policy.
Why?
To protect your business from loss of revenue should a construction project be delayed due to damage to the works.
Who needs it?
A principal/owner/business operator who is undertaking a construction project as part of its business.
Financiers of such projects will also benefit from this insurance and may make it a condition of the finance agreement on certain projects that this insurance is affected.
What are some examples?
Example 1
A major fire occurs in the works whilst under construction and shortly before the anticipated handover.
This will have the effect of severely delaying the completion of the project and whilst it is delayed the Principal will miss out on anticipated revenue and profits as well as incur extra costs for debt servicing and alternative leasing arrangements which would not have been incurred should the loss not have occurred.
In this case, the policy will indemnify the insured for lost revenue and costs incurred.
Example 2
A critical item of plant is damaged during transit to the site (e.g. a transformer on a wind farm energy project).
The plant is highly specialised and there is a lead time of 9 months before a replacement can be delivered to the site.
As a result, the project completion will be delayed whilst the replacement transformer is being manufactured and delivered and the owner of the wind farm will be prevented from achieving the revenue that it expected and budgeted to achieve for a period of up to 9 months.
In this case, the policy will indemnify the insured for lost revenue and costs incurred.
How can I purchase it?
Every client is different, that’s why our insurance service is custom designed for your needs. Click on ‘Contact us’ and you can book a meeting with Cruden Read to determine the most effective and appropriate solution.