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Case study

Supporting a large automotive manufacturer through complex construction challenges

The challenge 

A multinational automotive manufacturing company built a new state-of-the-art manufacturing plant in the US. The manufacturer engaged Marsh early in the project lifecycle to provide specialized risk management guidance and to develop a comprehensive, adaptable construction insurance program.

The solution 

An integrated approach to address a range of challenges

The project required innovation and flexibility to address several challenges, including an evolving scope, a non-traditional contracting approach with multiple direct hires rather than a single general contractor, and coordination across multiple engineering standards and stakeholders. Delays in site preparation further complicated timelines and budgets.

Specialists from Marsh’s Manufacturing and Automotive Industry Practice collaborated closely with colleagues from our Construction Practice to provide foundational education regarding options and best practices, as well as ongoing consultative support.

Early engagement enabled our team to provide a more comprehensive assessment of both existing and evolving risks, to collaborate with the client’s risk and legal teams on contractual wording guidelines, to support the client during negotiation of key contracts, and to design insurance programs and risk management solutions tailored to the project’s evolving needs.

Marsh placed several construction-related coverages. In one example, the owner-controlled insurance program (OCIP) program provided consistent insurance limits across all contractors and subcontractors, addressing potential coverage gaps that could stem from the manufacturer’s direct-hire contracting model. The client credits the OCIP with helping them establish a robust safety culture for the project, resulting in favorable loss experience and cost. In another example, Marsh tapped into its global insurance capacity to secure very favorable terms and pricing for the builders risk placement, achieving over 30% cost reduction in comparison to client’s initial forecasted cost.

Beyond insurance placement, Marsh provided ongoing risk consulting, helping the manufacturer understand risk exposures, coverage nuances, manage claims, and adapt policies as the project scope and timeline expanded.

The result 

Sustaining momentum through comprehensive risk management and insurance

Over a multi-year collaboration, our specialist teams worked closely with the manufacturer to help navigate complex construction risks as the project progressed toward operational readiness. The tailored insurance programs evolved alongside the project, accommodating scope changes costs effectively without compromising coverage. The manufacturer gained critical risk management expertise, empowering them to make informed decisions and maintain momentum amid challenges.

This case exemplifies how Marsh’s expertise and the implementation of an integrated risk management approach and bespoke insurance programs enable manufacturers to build resilience and manage the multifaceted risks of large-scale construction projects, ensuring protection, continuity, and confidence from groundbreaking through operation.

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