Insurance

Question 1

Why are insurances in project business important for Siemens?

Answer 1

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

Question 2

Insurance Topics during PM@Siemens

Answer 2

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

Question 3

Siemens ERM Process

Answer 3

Identify, Assess, Respond, Monitor, Report and Escalate, Sustain and continuously improve

Question 4

Property and Business Interruption Insurance

Answer 4

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

Question 5

4 Major Insurances / 4 Global Lines

Answer 5

1) Property and Business interruption insurance, 2) marine insurance, 3) erection all risks including maintenance insurance 4) global liability insurance

Question 6

Examples of Property and Business Interruption Insurance triggers

Answer 6

Natural Hazard, Fire, Lightning, Explosion, Theft, Water damage, machinery breakdown, Impact of aircraft

Question 7

Marine insurance - definition and coverage

Answer 7

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

Question 8

Incoterm Ex works (EXW) - Insurance implication

Answer 8

Pick up at location of the factory, risk transferred during pickup by buyer

Question 9

Incoterm Free on Board (FOB) - Insurance Implication

Answer 9

Agreed place loading on board, seller bears risk until goods are on board of ship

Question 10

Incoterm Delivered duty paid (DDP)

Answer 10

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

Question 11

Marine Insurance - Covered Goods

Answer 11

Goods, vehicles, company property

Question 12

Marine Insurance - Insured risks

Answer 12

Natural catastrophes, War and mine, rust and oxidation, accident/sinking of ship, plundering, fire/lightning/explosion, theft

Question 13

Property and Business Interruption Insurance - Deductibles

Answer 13

Property: 10% of loss, min 50k per occurence, Business Interruption: 50k-2m, Natural Hazard: 10% of any loss

Question 14

Erection all risks including maintenance insurance

Answer 14

Protecting against physical damage/loss occurring during construction work up to PAC

Question 15

Erection insurance - defects, what is insured?

Answer 15

Pure defects are not insured, but property damage from defects is covered, e.g. defect leads to physical damage

Question 16

Erection insurance - examples of cases

Answer 16

Construction failures, Fire, Theft, Vandalism, Strikes/Riots, Faulty Workmanship, material defects, faulty design

Question 17

Erection - Deductibles

Answer 17

min 50k, max 250k

Question 18

Project specific third party liability extension

Answer 18

Only Siemens covered under global liability insurance. If 3rd party needs to be included - project specific third party extension has to be set up

Question 19

Global liability insurance - coverage

Answer 19

Coverage for financial exposure of Siemens arising from third party bodily injured or property damage including consequential losses

Question 20

Global Liability - insured risks

Answer 20

Loss of property, Care/custody, IT processing, pure planning and advisory activities, product liability, environmental liability

Question 21

Examples of Local Lines of insurances

Answer 21

Worker’s compensation, employer’s liability, automotive liability insurance

Question 22

No Goes insurance Contracts

Answer 22

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

Question 23

Warning Signals insurance

Answer 23

Contract above 100m, offshore projects, prototypes, external consortium partners, projects in countries with special sublimit regarding natural perils e.g. Netherlands, Japan, USA (California)

Question 24

Wording insurance that needs to be checked by CF F INS

Answer 24

Primary, Cross Liability

Question 25

In which tool do insurance Claims have to be reported?

Answer 25

Clara

Question 26

Handling of insurance Claim - Steps

Answer 26

Immediate notification of CF F INS using Clara, providing detailed description of the events that lead to the claim + photographic documentation

Question 27

Accounting Treatment in case of insurance incidents / Execution

Answer 27

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

Question 28

Are Recourse Limitation or Waiver issuable without further consultation?

Answer 28

No, CF F Ins needs to be consulted

Question 29

General exclusions that can’t be covered by insurances

Answer 29

War like actions, terror, nuclear contamination

Question 30

Starting with which expected claim amount is a written agreement by CF F INS needed?

Answer 30

Expected amount of at least 2.5m EUR

Question 31

Insurance and PM020 and PM040

Answer 31

PM020: Consider which insurances are required, PM040: Concept has to be in place

Question 32

Risk Response strategy within ERM process

Answer 32

Avoid, reduce, transfer, watch, retain

Question 33

Deductibles Marine Insurance - value

Answer 33

Varies between Businesses and Services

Question 34

Global Liability Insurance - Deductible

Answer 34

20k