Airport construction is no simple undertaking. Projects can either be new or involve the extension of existing airport infrastructure. In the case of the latter, project works can often stretch on for many years as it becomes necessary to manage both the construction and day-to-day activities of an operational airport alongside each other.
Construction methods and types can also vary widely as each and every project is unique in its requirements. Beyond the typical elements (terminals, runways, hangers) airport projects may also involve tunnelling, reclamation and wet works, to name but a few.
Project financing models likewise vary from project to project. In 2017, nearly 30% of all airport projects were funded through a public-private model while only a mere 10% were wholly provided for with private funding.
WHAT WE DO
JLT has a depth of experience in delivering innovative solutions on both new and substantial expansions of operating airports.
Globally, our team of construction specialists’ work together to help clients better understand the nuances of each project and design risk transfer solutions.
Working on some of the largest airport infrastructure projects in the world our approach is to take a long-term view of the project. This is so that we can develop a thorough understanding of the risks associated with the project at construction, current and future operation stages.
Where expansion or modernisations are taking place, existing infrastructure generally remains operational during the project. When an airport continues to operate during construction, significant risks arise at the interface between the construction and operational phases.
Consequently, It is important that your broker understands the technical challenges that can emerge as a result of this interface, the contractual allocation of risk and indemnity and the project team’s approach to risk management. Only with this knowledge can the broker deliver the insurance solution that meets all stakeholder interests.
Unlike our competitors, we are not all things to all people, we are specialists. We deliberately invest in specific capabilities and make trade-offs in areas that we do not serve.
This specialisation enables us to have a developed and extended understanding of each of our clients’ business environment, allowing us to design customised products and services that actively deliver value.
We do not accept ‘one size fits all’. Rather, we recognise that every airport project is unique. It is for this reason that we challenge the status quo to ensure that just because something has been done one way in the past, does not mean it must be done that way in the future.
Our experts understand the technical challenges of the interface between construction and operational risks at existing airports.
They are also aware of and experienced in the contractual allocation of risk and indemnity, as well as advising the project team on their approach to risk management.
With this knowledge our brokers deliver the insurance solution that covers all stakeholders’ interests.
UNIQUE AIRPORT RISKS
Construction contracts included both routine works and major new infrastructure projects incorporating a new terminal at one of the world’s busiest airports.
The insurance placement needed to cover the unique risks which arose from contractors working in close proximity to the airfield.
JLT placed a five-year facility for construction all risks and
public liability insurances, the benefits of which were as follows:
- flexibility to cater for diversity and complexity of all construction works
- certainty of cost and coverage
- automatic accommodation of construction schedule changes
- packaging the placements to maximize the premium savings
- wide policy coverage at reduced premium
- no gaps or overlaps in cover
- reduced administration for project parties
- seamless interface with the property policy
- reduced the time taken to agree any claim payments.
LONGEST POLICY PLACED FOR STAND-ALONE TERRORISM
Design-build-finance-operate-maintain (DBFOM) public-private-partnership (P3) to demolish and replace the central terminal building (CTB) of one of the world’s busiest airports through a complex multi-phase project. Throughout the construction process the airport continued to operate.
JLT, together with the retail insurance brokers in the country, worked on the project for a number of years, supporting the sponsor through the entire bid phase.
Our role was to devise and arrange an ambitious insurance program structure; guaranteeing both capacity and the premium rate for both construction and operational risks.
The airport, located in a relatively high flood risk area, is considered a terrorism target risk – cover for both of these perils was required.
For the project, we were able to secure the longest policy ever placed in Lloyds for stand-alone terrorism.