Offshore construction insurance covers the construction and installation of offshore oil and gas platforms and associated subsea property. David Hallows, Divisional Director of Cooper Gay Energy, assesses the overall market and provides further information on WELCAR 2011 in a focus, found later in this article.
In recent years the quest for hydrocarbons offshore has seen platforms being installed in increasingly deeper water, an example including the recent installation of tension-leg platforms in 9,000 feet (2,700 metres) of water in the Gulf of Mexico.
Risks
The risks faced by such projects range from engineering and design risks through to maritime perils during the transit and installation offshore. The execution of the projects involves the engagement of highly specialised contractors, including the deployment of specialist vessels such as heavy lift barges and pipe-lay vessels.
Insuring Offshore Construction
The principal policyholders are ordinarily the oil and gas companies on whose behalf the platforms are built. Other insureded under the policy are usually the contractors and sub-contractors who carry out the work.
Risks usually attach under an offshore construction policy when property leaves the manufacturers’ and suppliers’ premises. Cover encompasses the following activities:
•Transit Risks to the onshore construction site.
•Onshore construction.
•Marine transits to the offshore location.
•Installation offshore.
•Testing and commissioning.
•Maintenance activity.
•Repositioning costs.
The main coverage relates to physical damage to project property and liability risks.
The Cooper Gay Offshore Construction Team
Members of the Cooper Gay Energy Division have arranged coverage for some of the world’s largest offshore construction projects. Based upon this experience, the team has negotiated significant coverage enhancements with a specific set of underwriters, which for example are now prepared to provide defective part coverage based upon a "per cause” approach to the deductible application.
Our improved policy wording forms the basis of a dedicated worldwide offshore construction insurance cover which we have placed with our underwriters markets.
With the ever-changing energy industry, which has changed considerably in recent years. From traditional power stations to nuclear and harnessing the power of the earth through renewable sources and the increased need for deeper exploration and mining to obtain natural resourced, so the insurance industry must respond.
