Presented by Jon Hetherington, Willis Australia Limited

1. NATIONAL CONFERENCE & EXHIBITION 2014
Optimising Risk Financing in Major Capital Projects
Presented by Jon Hetherington
Willis Australia Limited
Platinum Sponsor
Silver Sponsor Bronze Sponsor
Risk Manager of the Year
Award Sponsor
Conference and Exhibition Partners

2. Agenda/Topics for Discussion
• Risk Financing for Major Capital Projects – Key Considerations
• Traditional Insurance Obligations/Requirements
• Lessons Learned/Latest Trends/Developments & Future Directions
• Insurance Procurement Best Practice – “Execution Excellence”
• Take-Aways/Tactics for Strategic Solutions
National Conference & Exhibition 2014

3. Risk Financing for Major Capital Projects
Key Considerations
• Project Objectives (Stakeholders Needs & Expectations)
• Experience of the Project Team & Advisors
• Insurance Strategy needs to be fully considered and documented to achieve
best for bid outcomes
• All Stakeholders need to be confident and commit to the Strategy and Program
• Project Finance/Lenders Considerations (Anticipate & Manage Expectations)
 BFS, Term Sheet(s), PIM, Notice of Assignment, BLOU and DD reports
National Conference & Exhibition 2014

4. Risk Financing for Major Capital Projects
Key Considerations
• Key Risks/Project Risk Profile
 Qualification and Quantification Considerations
• Contractual Framework, Delivery & Allocation Methodology
 Consistency (Cascaded/Back-to-back)
• Scheduling/Delivery Time-table/Implementation Milestones
 Roles & Responsibilities, Plot Activity Schedules & Action Plans
National Conference & Exhibition 2014

5. Traditional Insurance Obligations/Requirements
• D&C Phase Insurances
 Contract Works Material Damage
 Consequential Loss / Delay in Start-Up
 Project Marine Cargo / Marine Delay in Start-Up
 Third Party Liability
 Project Professional Indemnity
 Contractors Pollution Liability and/ or Environmental Impairment Liability
 Worker’s Compensation & Employee Benefits
 Plant & Equipment and Motor Vehicles
 Marine Hull & Aviation
• Off the shelf policies/traditional structures are being challenged
• Bespoke project solutions becoming the norm
National Conference & Exhibition 2014

6. Traditional Insurance Obligations/Requirements
• Operational Phase Insurances
 Industrial Special Risks/Property/Material Damage
 Business Interruption/Consequential Loss
 Public & Products Liability
 Project Professional Indemnity
 Premises Pollution Liability and/ or Environmental Impairment Liability
 Worker’s Compensation & Employee Benefits
 Motor Vehicles
• Off the shelf policies/traditional structures are being challenged
• Bespoke project solutions becoming the norm
National Conference & Exhibition 2014

7. Lessons Learned/Latest Trends/Developments
and Future Directions
• State of the Market
• Alignment of Contract with
Coverage
• Image and Reputational Risk
• Collaborative Contracting
• Risk Pools
• D&C Joint Ventures
(Joint and Several/Alliancing)
National Conference & Exhibition 2014
• Bid Cost Recovery Fees
• Capping of Liability
• Fitness for Purpose/Express
Warranties
• Unforeseen Pollutants
• Relief Events/Abatement Provisions
• Cost Overrun

8. Insurance Procurement Best Practice
“Execution Excellence”
• Early engagement of insurance advisors pre-document drafting
• Insurable Risk Partnerships and not simply a commodifying culture
• Alignment of All Stakeholder and Project Objectives
• Maximise Outcomes = Define, Document and Deliver
• Comprehensive Suite of Services (much more than purely transactional)
National Conference & Exhibition 2014

9. Take-Aways/Tactics for Strategic Solutions
• Best for Bid Outcomes – Marked and Measured
• Trusted Advisors with a proven track record
• Price shouldn’t be the only measure of performance…
 Total Cost of Risk
 Value
• Insurance complicated by ever increasing contractual responsibilities
• Social and Reputational Risks and potential ramifications
National Conference & Exhibition 2014

10. NATIONAL CONFERENCE & EXHIBITION 2014
Thank you.
Platinum Sponsor
Silver Sponsor Bronze Sponsor
Risk Manager of the Year
Award Sponsor
Conference and Exhibition Partners