Insurance - Explanatory Note and Checklist

Insurance is an area of project finance that is often left to the end of negotiations, with little attention given to it. Availability of insurance, levels of cover and deductibles will, however, have an impact on the risks being taken by the authority, the operator/ project company and the lenders and so should be central to negotiations.

Insurance is not always the best solution for dealing with every risk that may arise. It may also not be possible or economically feasible to obtain insurance for certain risks. While some generalizations can be made about the insurances necessary for projects,  each project will require specific insurance coverage, based on the risks inherent to a particular project.