Is your construction project adequately insured? Discover how to identify and close critical coverage gaps.
With the construction industry in the Asia region poised for significant growth, construction risks are also manifesting more frequently and intensely than ever before. This exposes organisations to more significant vulnerabilities like climate risks and geopolitical tensions, leading to higher material costs, supply chain disruptions, and labour shortages1.
A thorough risk register review and insurability analysis can mitigate such risks, helping project stakeholders identify and understand insurable and non-insurable exposures and make informed decisions to protect their investments.
1. Risk register review
Construction projects are inherently dynamic, with conditions constantly changing. New regulations, unforeseen site challenges, or geopolitical events can all alter risk landscapes.
Against this backdrop, risk registers—comprehensive lists of all potential risks—must be in place and regularly reviewed to ensure that risks are properly prioritised and updated as the project progresses.
2. Insurability analysis
An updated and well-maintained risk register offers crucial information to assess risk exposure, enabling the insurability analysis process which helps project owners and developers determine which risks are fully insurable, partially insurable, or non-insurable. Knowing where insurance is used during construction can effectively mitigate risk, and stakeholders can make better decisions about where to invest in additional risk controls or insurance policies.
Marsh’s 6-step approach to insurability optimisation
The outcome
The 6 steps balance the project’s risk profile and insurance portfolio. They also maximise the value of risk management activities by reducing exposure to uninsured or underinsured risks. This leads to a clear understanding of where risk controls or additional insurance are required for optimal coverage.
Case study: Risk register review and insurability in action
A power plant sought to monitor the changing risk profile of this complex landmark project. Through risk engineering site surveys, reviewing the project's risk register and conducting quarterly project meetings, Marsh Asia was able to:
- Benchmark the project risk register against registers from comparable projects based on Marsh Asia’s large portfolio of clients in the same industry.
- Provide commentary on the adequacy of controls, especially for highly ranked risks.
- Highlight any inconsistencies in the risk ratings to allow for targeted review by the client.
- Highlight options for merging risks with substantial overlaps and document management techniques to consolidate the project risk register, increasing the efficiency of risk management.
- Provide policy wording extracts related to the project's top risks and wider risks outside of the risk register to enhance clarity on risk insurability.
This proactive approach strengthened the project's credibility with stakeholders through a combined risk engineering and strategic risk consultancy approach. This approach allows the clients to focus on the identified immediate key risks that can result in delays and financial losses.
Take the next step with Marsh
Proactively managing your risks through insurance for construction sites can safeguard your project’s success.
Experts at Marsh Asia possess combined experience in risk engineering and strategic resilience, coupled with a deep understanding of insurance in the complex construction landscape.
Our integrated approach helps risk managers and business leaders enhance their company’s existing insurance programs and risk mitigation strategies throughout the project lifecycle.
Make informed decisions and implement effective risk mitigation strategies throughout your project’s lifecycle.
Schedule a non-obligatory chat with a Marsh Asia Construction Specialist today.
1 Research And Markets (2024), Asia Pacific Construction Industry Databook Series.
https://www.researchandmarkets.com/reports/5918212/asia-pacific-construction-industry-databook?utm_source=GNE&utm_medium=PressRelease&utm_code=3nbxwp&utm_campaign=2002255+-+Asia+Pacific+Construction+Industry+Databook+2024%3a+Emerging+Trends%2c+Market+Opportunities%2c+and+Investment+Risks+in+Over+40+Segments+-+Forecasts+to+2028&utm_exec=chdomspi