An insurance broker should be appointed on projects undertaken by a project alliance. The broker's role can be described as 'packaging and sale' of the project risks to the insurance market.
Following the risks that are to be insured are identified, the broker takes those risks to market for insurance cover, an important step in the procurement process.
The insurance advisor should participate in broker selection, particularly where the selection is undertaken by a competitive tender process. The insurance advisor should:
• prepare the tender document (if appropriate), including specifying the broker requirements, developing the competency framework, specifying the performance measures;
• manage the tender process;
• advise the Owner on selection; and
• advise the Owner on the broker contract.
The insurance broker can be appointed either by selection from a pre-approved panel, or via a competitive tender process. The key considerations for appointing the insurance broker are described in more detail in Appendix C and include:
• their experience;
• the term of the appointment;
• remuneration;
• duties and obligations of the broker.
Subject to the obligations and role played by government-owned insurers, it is considered unlikely that the insurance advisor could also operate in the broker role. The requirements of these roles need a degree of independence from each other.