Insurance is complex at the best of times. It often involves various stakeholders who will have an interest in the insurance provisions, as well as their insurance advisers, brokers, lawyers, internal and external risk management specialists and the underwriters themselves.
While recent project-specific insurance products have aimed to overcome some core issues that traditional insurance products pose for alliancing agreements, alliance Participants still face many complex and difficult insurance issues. Participants (particularly Owner Participants and their specialist advisors) need to understand and consider these factors so that their project has effective insurance protection on appropriate terms, both at the outset and on an ongoing basis as the alliance activities progress.
Given the complexities and cost of insurance, it is desirable to address insurance issues as early as possible in the project negotiations.