Marine LOP / DSUwhat an underwriter needs to know

Tillmann Kratz, Munich Re

Marine DSU / LOPwhat an underwriter needs to know

insured interest and terminology

capacity requirements

underwriting considerations

policy wordings

insured interest

compensation for a consequential loss which

occurs in the insured‘s business as a result of a

loss / damage or accident during the transportation

of cargo or other goods (to be) used by the insured.

terminology

TDI

Project BI

cover and loss triggers

loss/ damage/ mechanicalbreakdown to/ of

• project cargo• carrying vessel• land convenyance

GA/ salvage/ lifesavingoperations

cargo loss triggers

capacity requirements

recent values

project cargo € 60 million to € 1.000 million

LOP/DSU € 100 million to € 650 million

underwriting considerations

who are the insured parties

coverage model & details

risk assessment

policy wording / clauses & warranties

pricing

CARGO - insured parties

ProjectOwners

Lenders / Banks

Designers / Architects

Main- / Sub-Contractors

ProjectOwners

marine

LOP / DSUproject

insurance

Lenders / Banks

DSU – insured parties

DSU coverage combinations

look out forALOP disguised as Penaltynon-continuous risk covers

popular coverage models

marine cargo + DSU & construction + DSUmarine cargo & construction + DSUconstruction incl. (inland) transit + DSU

coverage details & capacity

stand-alone or combined coverinfluence on cargo loss preventiondetermining the sum insured indemnity periodmaximum indemnity per day/monthdeductiblesrequired / offered capacityavailable reinsurance

risk assessment

transport logistics

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43

ABCD

ABD C

ISSUE REV: 0 A B C D - - - -

R EF: 695 - TR - 001

TITLE:

PROJECT:

This document is th e property of B& J Services Co.,Ltd.Copy, reproduction or disclosure to third p arty is strictlyforbiden with out the express au thoris ation of B&J Services.

B&J SERVICES CO., LTD.40/1 Moo Chaengwattana Road, Banm ai, PakkredNonthaburi 11120, Thailand.Tel: (66) (2) 980 9300-14 - (66) (21) 574 2995Fax: (66) (2) 573-2300 - (66) (2) 980 9315 (b)Em ail: bandj@m ozart.inet.co.th

C LIENT:

DATE:

SCALE:

C HE CK B Y:

DRAWN B Y:

R EF: M ODIFIC ATIONS: DATE:

NOTES:

TRANSPORT ARRANGEMENT FORTHERMAL BLOCK 370 T

5/06/00

SAKDA S.

NON.

BOWIN POWER PLANT

ALSTOM POWER

B M ODIFY BEAMS POS. 09/09/00

A C HANGED BEAMS 6/9/00

1) INFORMATION ON CARGOES TAKEN FROM C LIENT'S PACKING LIST.2) TR AILER CONFIGURATION TO B E CONFIRMED UPON REC IEPT OF VENDOR FINAL DRAWING SHOWING C OF G AND MORE DETAILS3) LASHING POINTS TO BE AGREED WITH CLIENTS4) LOAD C ALCULATION; C ARGO WEIGHT = 370 T TRAILER WEIGHT = 160.9 T B EAM S WEIGHT = 24 T TOTAL LOAD = 554.9 T LOAD /LINE = 34.68 T LOAD / AXLE = 17.34 T LOAD / TYRE = 4.33 T AVERAGE GR OUND PRESSURE = 3 .82 T / SQU-M

C CHANGED CLIENT NAME 26/10/00

D CHANGED THE NAME 16/12/00

transport infrastructurejust in time deliveryprovision for delayscritical itemslead time for replacements loss prevention

policy conditions / wordings

standard wordings E.C. BruceMunich Re MCL/PenaltyNew JCC Project Cargo DSU

manuscript wordings

special cargo and/or DSU clausesLenders / Non-Vitiation clausesDeferred unpacking clause50/50 clause

premium calculation

popular modelsrule of thumbx-times daily indemnityx-percent of sum insured

alternative optionrating tool

π x

and finally…

LOP/DSU is the current craze, Everybody must have it

BUT

Hunger for premium should not override caution

A little common sense and risk awareness

Will go a long way towards

Profitable underwriting

Thank you very much

Tillmann Kratz