Insurance Flashcards
Why are insurances in project business important for Siemens?
Protection against major losses, negative effects in the financial statements are avoided, Siemens employees are insured, Siemens attends duty of care, often: Contractual obligation to cover certain risks by insurance
Insurance Topics during PM@Siemens
PM020: Is CF F involved - rough analysis of risks, which risks shall be transferred to insurance companies. PM040: Insurance concept has to be in place
Siemens ERM Process
Identify, Assess, Respond, Monitor, Report and Escalate, Sustain and continuously improve
Property and Business Interruption Insurance
Insures against all risks of physical loss or damage to all real and personal property worldwide. (Buildings, Machinery, Replacement costs, stock), Business interruption as a result of property damage
4 Major Insurances / 4 Global Lines
1) Property and Business interruption insurance, 2) marine insurance, 3) erection all risks including maintenance insurance 4) global liability insurance
Examples of Property and Business Interruption Insurance triggers
Natural Hazard, Fire, Lightning, Explosion, Theft, Water damage, machinery breakdown, Impact of aircraft
Marine insurance - definition and coverage
Marine insurance provides coverage against all risks to which goods are exposed during transport. Generally: From factory to construction site, risk transfer dependent on the Incoterm used
Incoterm Ex works (EXW) - Insurance implication
Pick up at location of the factory, risk transferred during pickup by buyer
Incoterm Free on Board (FOB) - Insurance Implication
Agreed place loading on board, seller bears risk until goods are on board of ship
Incoterm Delivered duty paid (DDP)
Agreed place is place in the importing country. Seller bears risks until the destination is reached and cargo is ready for unloading. Should be avoided
Marine Insurance - Covered Goods
Goods, vehicles, company property
Marine Insurance - Insured risks
Natural catastrophes, War and mine, rust and oxidation, accident/sinking of ship, plundering, fire/lightning/explosion, theft
Property and Business Interruption Insurance - Deductibles
Property: 10% of loss, min 50k per occurence, Business Interruption: 50k-2m, Natural Hazard: 10% of any loss
Erection all risks including maintenance insurance
Protecting against physical damage/loss occurring during construction work up to PAC
Erection insurance - defects, what is insured?
Pure defects are not insured, but property damage from defects is covered, e.g. defect leads to physical damage
Erection insurance - examples of cases
Construction failures, Fire, Theft, Vandalism, Strikes/Riots, Faulty Workmanship, material defects, faulty design
Erection - Deductibles
min 50k, max 250k
Project specific third party liability extension
Only Siemens covered under global liability insurance. If 3rd party needs to be included - project specific third party extension has to be set up
Global liability insurance - coverage
Coverage for financial exposure of Siemens arising from third party bodily injured or property damage including consequential losses
Global Liability - insured risks
Loss of property, Care/custody, IT processing, pure planning and advisory activities, product liability, environmental liability
Examples of Local Lines of insurances
Worker’s compensation, employer’s liability, automotive liability insurance
No Goes insurance Contracts
Customer is not allowed to receive a copy of the policy, only insurance certificate, essential alteration to the terms of the insurance may not be made w/o prior approval from customer, payments are only possible with prior approval from customer
Warning Signals insurance
Contract above 100m, offshore projects, prototypes, external consortium partners, projects in countries with special sublimit regarding natural perils e.g. Netherlands, Japan, USA (California)
Wording insurance that needs to be checked by CF F INS
Primary, Cross Liability
In which tool do insurance Claims have to be reported?
Clara
Handling of insurance Claim - Steps
Immediate notification of CF F INS using Clara, providing detailed description of the events that lead to the claim + photographic documentation
Accounting Treatment in case of insurance incidents / Execution
Incident occurs: Plan cost increase | Written promise of payment from insurance received: Decrease of plan cost, recognition of other receivable| Reimbursement from insurance received: Other receivable derecognized
Are Recourse Limitation or Waiver issuable without further consultation?
No, CF F Ins needs to be consulted
General exclusions that can’t be covered by insurances
War like actions, terror, nuclear contamination
Starting with which expected claim amount is a written agreement by CF F INS needed?
Expected amount of at least 2.5m EUR
Insurance and PM020 and PM040
PM020: Consider which insurances are required, PM040: Concept has to be in place
Risk Response strategy within ERM process
Avoid, reduce, transfer, watch, retain
Deductibles Marine Insurance - value
Varies between Businesses and Services
Global Liability Insurance - Deductible
20k
