Construction risks for mining companies

Having seen one of the deepest downturns in a decade, confidence is now returning to the mining industry, and new projects are on the rise.

With project finance still difficult to secure, and with high levels of lender and stakeholder scrutiny, the protection of a project from a wide range of perils that could cause financial loss or project delay during the complex construction period is paramount.

JLT provides construction insurance across the mining industry. Our global team of specialists understand the risks of the construction phase of a mining project and will work with you to find the right solution to protect your mining company from both a financial and reputational loss perspective.


Construction risk

Lender requirements must be carefully adhered to, stakeholders must be actively managed, and the transition from construction to operational phase needs careful planning.

The construction phase is one of the riskiest points of the mining life cycle; the stakes are high from both a financial and reputational loss perspective.

Construction risk

Our global team of specialists understand mining risks spanning the entire project life cycle. We manage a large and established client base of mining companies, contractors, traders, and financiers, across a range of commodities and regions.

Our objective is simple: to provide our clients a competitive advantage by enhancing their resilience and empowering them to take risks. Working with you, we can help you understand and mitigate your construction risks.

Our construction team's key stats

375+ global construction specialists
$1 billion+ construction premium placed in 2017
500+ conducted financiers due diligence on iver 500 projects
255 operational projects managed


Construction project insurances are typically placed on an ‘all risks’ basis, with losses emanating from numerous causes which vary considerably between location.

Project sites can be remote, sites can be green or brownfield, and often construction takes place alongside existing operational projects.

Construction insurance must therefore be designed by experts - with these nuances in mind. Our construction capabilities include:

  • 375+ global specialists who place over USD 1 billion of construction premium into the insurance market annually
  • Specialist claims teams that have delivered USD 4 billion in claims in the last five years
  • Access to specialist third party risk engineering teams
  • In-house financiers, due diligence team and project review teams.

Construction risks for mining companies


  • Development of core infrastructure: includes roads, bridges, rail, ports and worker camps. Risks include property damage from natural catastrophe (earthquake, flood, storm), security risks that cause property damage and bodily injury, site accident, delay in equipment or materials delivery, legal and regulatory challenges in dealing with local jurisdictions
  • Environmental and land management: managed as per the permitting guidelines, such as the relocation of wildlife and the planting of vegetation to use during remediation and for erosion prevention and water management. Risks include environmental protest
  • Delivery of equipment, materials, and tools for mine construction: risks include property damage (including concealed damage to construction materials) and delays as a result of natural catastrophe, security risks, shipment delays or embargo, and additional costs as a result of delays or damage.


  • Construction of the mine involves overburden removal, drilling and blasting for open pit, and tunnelling and the building of ventilation shafts and emergency exits for underground mines. Risks include natural catastrophe that result in property damage, machinery breakdown or delay in start-up on account of the need to re-tunnel, re-blast and costs around debris removal and temporary repairs. Security risks, including protest or strike, can also threaten property, people and project timelines
  • Constructing facilities for ore processing and the infrastructure to link mine to processing
  • Building more permanent structures for mine workers and facilities for service and supply during operational phase, such as electrical, welding, and vehicle maintenance shops
  • Management of lender requirements throughout this stage.


  • Challenges of transition can be further complicated by lender or joint venture partner interests. Delays to the testing and requirements for extended commissioning phase may also impact the transition.


Our extensive cover can include:

Construction all risks (CAR)
All risks cover for damage to property, including natural catastrophe perils, belonging to mine owners, subsidiaries, contractors and financiers, with cover for manufacturers or suppliers to the project and consultants (including architects) for on-site activities.

Extensions include:

  • Delay in start up
  • Debris removal
  • Pollution clean up costs
  • Fire fighting and service charges
  • Temporary repairs and additional expenses
  • Local authorities clause
  • Professional fees
  • Plans, drawings and documents

Construction third party liability
Cover for the parties above for risks to third party property, bodily injury and associated defence costs following a loss.

Contractors’ plant and equipment (CPE)
Covers the cost of replacement or repair for mobile and fixed plant, equipment and motor vehicles following damage.

Lenders’ requirements
Whether using a mixture of traditional debt and equity or streaming finance, failing to manage insurance issues related to debt finance can create problems in reaching financial close. Lenders will require certain coverage enhancements (‘lenders clauses’) which can include loss payee provisions, non-vitiation clauses, security of (Re) insurance provisions and possible assignment of policies and loss proceeds.

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