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ALoP Insurance Overview and Claims

This document discusses key aspects of Allianz General Insurance's Advanced Loss of Profits (ALoP) insurance. ALoP insurance indemnifies the principal or owner of a construction project for losses from delays in project completion caused by physical damage covered under a material damage policy. Only the principal can be insured under ALoP. The sum insured represents anticipated gross profits. Claims can be made for lost net profits, standing charges, and costs to reduce delays. The indemnity period covers the delay between the scheduled and actual commercial operation dates.

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Anudeep Sekhar
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20 views17 pages

ALoP Insurance Overview and Claims

This document discusses key aspects of Allianz General Insurance's Advanced Loss of Profits (ALoP) insurance. ALoP insurance indemnifies the principal or owner of a construction project for losses from delays in project completion caused by physical damage covered under a material damage policy. Only the principal can be insured under ALoP. The sum insured represents anticipated gross profits. Claims can be made for lost net profits, standing charges, and costs to reduce delays. The indemnity period covers the delay between the scheduled and actual commercial operation dates.

Uploaded by

Anudeep Sekhar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

 

                                     

Bajaj Allianz General Insurance Co. Ltd.

1
                                      

INTERESTS INVOLVED IN A PROJECT

FINANCE
CHARGES

MAIN PRINCIPAL FINANCIAL


CONTRACTOR INSTITUTIONS
LOANS

INVESTMENT
GROSS MANAGEMENT
PROFIT

SUB
CONTRACTORS PROJECT
MATERIAL
LABOUR

2
                                      

OBJECT OF “ ALOP ” INSURANCE

 TO INDEMNIFY THE PRINCIPAL OR OWNER


OF A PROJECT

 FOR THE ACTUAL LOSS SUSTAINED

 DUE TO A DELAY IN COMPLETION OF THE


INSURED WORKS

3
                                      

THIS DELAY MUST BE CAUSED BY


DIRECT PHYSICAL LOSS OR DAMAGE

 COVERED UNDER THE MATERIAL DAMAGE


SECTION OF SCE POLICY

 NOT EXCLUDED BY “ ALOP ” -


ENDORSEMENT

4
                                      

WHO CAN BE INSURED ?

 ONLY THE PRINCIPAL.

 LENDERS SHOULD NEVER


BE AN INSURED OR CO-INSURED.
 IT IS POSSIBLE TO GRANT A “LOSS PAYEE”
CLAUSE.

 CONTRACTORS, SUBCONTRACTORS
CANNOT BE ACCEPTED AS INSUREDS
UNDER ANY ‘ALOP’ EXTENSION. 5
                                      

SUM INSURED
S.I. HAS TO BE ARRIVED CONSIDERING
REVENUE GENERATION PROJECTION FROM
SCHEDULED COMMENCEMENT DATE OF
1st UNIT.

S.I. IS ANTICIPATED “ GROSS PROFIT ”

THE DECISION TO INSURE OR NOT TO


INSURE THE “FULL GROSS PROFIT” IS
WITH THE INSURED

INSURED CAN OPT TO INSURE :


STANDING CHARGES ONLY
INTERESTS ONLY
EXPRESSED AS PERCENTAGE OF “ G.P. ”
6
                                      

PROJECT PERIODS
MAXIMUM
INDEMNITY
INSURANCE PERIOD PERIOD

CAR / EAR - ALOP ( ALOP )

TRANSIT

PLANNING ON SITE STORAGE COLD / HOT


PRE - TEST COMMERCIAL
HANDLING OPERATION
TEST
CONSTRUCTION
ERECTION

SCHEDULED DATE OF
COMMENCEMENT OF
INSURED BUSINESS
7
                                      

WHAT IS CLAIMABLE ?

 LOSS OF NET PROFIT

 STANDING CHARGES PAYABLE


DESPITE THE LACK OF INCOME

 INCREASE IN EXPENDITURE TO REDUCE


OR AVOID THE DELAY TO START-UP

8
                                      

What we mean by LOSS OF GROSS PROFIT

STANDING CHARGES

AND

NET PROFIT

9
                                      

INCREASE IN COST OF WORKING

THE EXPENDITURE NECESSARILY AND


REASONABLY INCURRED TO DIMINISH
OR AVOID A REDUCTION IN TURNOVER
DURING THE INDEMNITY PERIOD.

10
                                      

INDEMNITY PERIOD

THE PERIOD OF INDEMNITY COMMENCES


WITH THE DATE UPON WHICH, HAD THE
INSURED PHYSICAL LOSS OR DAMAGE NOT
OCCURED, THE INSURED WOULD HAVE
COMMENCED COMMERCIAL OPERATION,
BUT NOT PRIOR TO THE PLANNED DATE
INDICATED IN THE SCHEDULE.

11
                                      

THE PERIOD OF INDEMNITY ENDS

WITH THE ACTUAL DATE UPON


WHICH

THE INSURED WORKS ARE COMPLETED

OR

THE FULL OPERATIONAL TESTING OF


THE INSURED WORKS IS COMPLETED.

12
                                      

MAXIMUM INDEMNITY PERIOD

ORIGINAL CONTRACT PERIOD


ORIGINAL MD, ALOP-POLICY PERIOD

DELAY

ERECTION AND TESTING RoD,


SUPPLY ERECTION &
RESUPPLY TESTING
MARGIN

ACCIDENT

SCHEDULED BUSINESS
COMMENCEMENT
MAXIMUM INDEMNITY PERIOD
13
                                      

ONLY ONE CLAIM PER POLICY


Indemnifiable Accident
Build up
of the
sum insured Indemnifiable Accident

Non-Indemnifiable Accident

Indemnifiable Accident

Indemnifiable Delay to be adjusted for time 14


excess for
reinstatement with same design
                                      

INSURED AND UNINSURED DELAYS

FIRE, NEGLIGENCE

STRIKE, SHORTAGE OF MATERIALS

INSURED DELAY
SCHEDULED BUSINESS
COMMENCEMENT
UNINSURED
DELAY

INDEMNITY PERIOD

15
                                      

ALoP Insurance In a Nutshell

 The Insured in ALoP is the PRINCIPAL ONLY


 Concurrent material damage (MD) insurance
 Same Insurer(s) for ALoP and MD
 Extremely good co-operation between all parties
 Insurance period identical to MD erection period
 Accident not immediately followed by indemnity
period
 Only one claim per policy
 Only one time excess per policy
 Max. indemnity period sufficiently long

16
                                      

Thank You

17

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