Risk is ever present in the construction sector, creating uncertainties that can increase costs, erode stakeholder confidence, and negatively impact the delivery of project goals. A professional risk management strategy can reduce uncertainty and promote increased reward.
Our team helps you assess risks and opportunities and uncover ways to use working capital more efficiently. We measure your firm’s appetite for risk, recommend solutions that meet your needs, and take your programme to market knowing the best insurers for the best structure and pricing.
Our strengths include:
- The depth of our resources, experience, and expertise.
- Our network of offices working closely with regional specialists.
- Bespoke policy wording and programme design.
- Our ability to manage contractual risk allocation.
- A targeted placement strategy which uses the strength of Marsh’s global account and, for international projects, considers the most competitive underwriters, irrespective of their geographical location.
The result: Marsh’s Global Construction Practice is an international team operating across geographical boundaries, which offers you opportunities and solutions to meet your needs.
Power and Utilities
The International Energy Agency predicted that a total of 5,890 GW of additional power capacity would be required between 2012 and 2035. This need for ever-increasing sources of power on a global level continues to create ongoing opportunities for the construction of new plants and facilities. At the same time, competition is driving manufacturers to constantly develop new technology, presenting unknown challenges to contractors, risk managers, investors, and insurers. Marsh’s power specialists maintain an up-to-date knowledge of such developments through regular contact with manufacturers and sector insurers.
The Contractual Matrix
Marsh has an in-depth understanding of the complexities of projects financed on a limited recourse basis. The structure of an independent power producer (IPP) transaction can be complex, with many insurance obligations to be considered across various contracts, including the engineering, procurement, and construction (EPC) contract, power purchase agreement, loan agreement, and operations and maintenance (O&M) agreement, etc.
Ensuring that the insurance requirements in all contracts are drafted in the knowledge of what is reasonably available, and also ensuring that the various contracts dovetail correctly, is an area on which we have thorough knowledge. We know insurance is not allowed to delay financial close and we proactively manage our counterparts in legal and financial insurance to ensure that does not happen.
Oil, Gas, and Petrochemicals
With the fluctuating environment of the oil, gas, and petrochemical industry comes the need to develop new and cutting-edge risk solutions to meet the industry’s needs and requirements. Every project demands a bespoke suite of cost-efficient insurance services.
Marsh’s energy risk engineering team is well qualified to provide risk managers and underwriters with the essential information they need to determine the right limits, scope of cover, and price. Our in-depth knowledge and understanding of the sector provides you with comprehensive contract reviews and advice at the early stage of any project. Marsh’s benchmarking capabilities enable us to compare new projects with the many projects we have already placed. This benefits you, as we bring that experience to bear when we present your projects to the market.
Losses encountered during the construction phase of a project can be hugely costly, both in terms of physical damage, and lost time. Marsh’s energy claims team deals with some of the industry’s largest and most complex losses. Our professional approach to claims management has resulted in significant success for our clients; not only financially, but also facilitating a much sought-after, shorter claim life-cycle.
Infrastructure and Civil Engineering
Experience has shown that the negative time and cost impact of major risks, such as varying geological conditions and exposure to natural hazards, can be particularly severe in the infrastructure sector.
These risks create a wide range of exposures linked to areas of design, construction, interfacing, and sequencing which must be continually evaluated and managed by the project team.
Risk management strategy must be tailored to minimise the impact of specific risks on the project works, existing infrastructure, construction equipment, and third parties, in particular.
Marsh experts work with owners, contractors, engineering consultants, and project partners to implement innovative risk management and transfer solutions for many of the world’s most technically challenging construction projects. Our dedicated risk engineering services and broking capabilities are proven to support project delivery – on time and on budget.
Some construction companies procure contract works insurance policies on a case-by-case ad-hoc basis when required to do so as a contractual obligation or requirement.
While this may be an appropriate and necessary approach for very large projects, for heavy civil works (such as tunnelling and wet works), and projects in specific natural catastrophe zones, there is an effective and advantageous alternative to insure a contractor’s portfolio.
Marsh works with many national and multinational contractors to design and arrange annual or multi-year insurance facilities that automatically include all projects within pre-agreed parameters and limits, without the need to arrange single project policies on a case-by-case basis.
There are many advantages for a contractor adopting an insurance facility approach, including:
- Simplified tenders.
- Reduced administration.
- Certainty of cover.
- Insurer relationships.
- Cost savings.
- Claims response.