With trillions of dollars committed to infrastructure projects across Asia in the coming decade, construction risk considerations loom large
With the number of construction projects in the region on the rise, vast amounts of industrial machineries will be deployed, the head of QBE Singapore Karl Hamann has told StrategicRISK.
“Across the Asian region as a whole, it is calculated that around US$8 trillion will be committed to infrastructure projects over the next decade to remedy historical underinvestment and accommodate the explosion in demand,” Hamann said.
Like any other risk, it has to be managed – be it in Asia or anywhere else in the world, Hamman added.
“With the increasing complexities in the construction process, companies in this arena will have to be cognisant of the increasing risks posed by the new technologies,” he told SR.
In terms of how risk managers can approach construction risk, Hamann said the “risks are assumed or insured”.
“Insuring the risks must be taken in context of having in place good management practices, and it is premised upon the insured behaving as if they are not insured,” he said.
Hamann warns risk professionals to avoid “accepting status quo or the archaic market wording and covers provided” in policies.
In reaction to the expanding infrastructure and construction risks in Asia, QBE Singapore has released an Industrial Special Plant (ISP) insurance package for clients looking to cover their mobile plant and equipment.
“The construction risks which ISP addresses are: material damage, loss damage to the equipment; business interruption, financial loss flowing from the material loss; general liability, towards the third parties as a result of damage to third party property or bodily injury or death as a result of the usage of the machines,” Hamann said.
“The consequence of any of the above happening can be disastrous, and financially draining for the company.”
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