When considering the cost of the insurance, the main question is whether the insurance represents Value-for-Money. This is a difficult and highly subjective concept, for the reasons stated above. A number of objective tests may be undertaken, including:
• ask the broker to provide quotes of other insurance markets not accepted, and compare reasons for the price differences;
• benchmark pricing with comparable projects using a normalised metric, e.g., rates on line (premium/limit of cover) or rates by asset value having regard to differing cover scope and deductible levels;
• undertake a sensitivity analysis by modifying the insured risks and assessing the impact.