Delay in Start-Up Insurance: Connect Project Cargo Damage to Lost Revenue
Marine delay in start-up insurance can address agreed financial losses when an insured cargo event delays a project's commencement, subject to the wording.
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What is marine delay in start-up insurance intended to address?
Marine delay in start-up insurance can address agreed financial losses when an insured cargo event delays a project's commencement, subject to the wording. It is not a general promise that construction will finish on time. Connect the critical equipment, transport risk, project schedule and financial consequences of a qualifying delay in the submission.
Connect the cargo event to the project schedule
Munich Re's project cargo overview identifies project cargo and delay in start-up as specialist covers. Products and terms differ. Obtain the trigger, exclusions, indemnity period and time excess in writing instead of inferring scope from the insurance name.
Projects may suffer delay through design revisions, permits, financing or unrelated construction problems. These are not equivalent to delay caused by insured transit damage. The schedule should show which equipment governs the start date and what float, alternatives or concurrent delays exist.
| Project information | Underwriting question | Evidence to prepare |
|---|---|---|
| Critical equipment | What cannot be substituted quickly? | Equipment and supplier schedule |
| Transit plan | Where can physical loss occur? | Route, handling and survey arrangements |
| Replacement lead time | How long would recovery take? | Manufacturer's current assessment |
| Critical path | Would the loss delay start-up? | Maintained project programme |
| Financial exposure | Which revenue or costs are affected? | Supported financial model |
Replacement time is not the whole calculation
A fictional power project's transformer is damaged in transit. Replacement takes four months, but civil works were already expected to finish two months late for unrelated reasons. The claim cannot simply be calculated by multiplying four months by projected revenue. The agreed policy, programme and causal effect of the cargo event need examination.
Keep baseline and updated schedules, procurement correspondence and mitigation decisions. A retrospective spreadsheet may be less persuasive than a maintained programme showing what changed and why. Explain assumptions about commissioning and revenue rather than presenting the most optimistic forecast as a certainty.
Review the interfaces before loading
Cargo survey conditions, route approvals, repair options and replacement arrangements can affect prevention and recovery. Establish responsibilities among the project owner, supplier, logistics contractor and insurers. Construction and operational policies may attach at different milestones.
Ask what expediting or mitigation costs are addressed and what consent is needed. A cargo property limit is not necessarily the available financial-loss limit. Each valuation, waiting period and duration should be understood separately.
Read the project cargo insurance guide, review marine cargo cover, or submit the project transport schedule.
Key takeaways
- Identify the insured trigger rather than assuming a completion guarantee.
- Connect critical cargo to a maintained programme and financial model.
- Examine concurrent delays, mitigation and policy interfaces before an incident.
Frequently asked questions
What is marine delay in start-up insurance intended to address?
Marine delay in start-up insurance can address agreed financial losses when an insured cargo event delays a project's commencement, subject to the wording. It is not a general promise that construction will finish on time. Connect the critical equipment, transport risk, project schedule and financial consequences of a qualifying delay in the submission.
Sources & further reading
General information, not a coverage determination or offer. Actual cover is subject to policy wording, insurer terms, underwriting and applicable law.