INTRODUCTION

Now-a-days the Business is becoming competitive day by day due to Government’s policy of liberalisation and globalisation. The business and industry is passing through the phase of bearing risk after risk. It is well said that “Business is always associated with the risk factor”. More the risk at an appropriate and opportunistic time, more is the probability to earn profit. And as such the risks involved in business is to be well covernd or rather to be got insured by way of adopting professionalism in line with the demand of the day in an organisation. Outwardly, the various risks involved in business are to be insured by taking the well knitted insurance policy from an insurance company. To achieve the economy of scale, these days bigger and bigger Projects are being constructed wherein plant and machinery worth thousands of crores of Rupees are procured and enormous construction activity of plant erectin involving labour in thousands are utiised. Thus to cover the risk of materials, plant and machinery and at the same time manpower, insurance becomes the integral part of good Project Management.

2.0 INSURANCE POLICIES TO COVER RISKS

2.1 Based on Nature of Jobs : 

The types of risks involved depend upon the nature of Construction/production activity in Plant building organisation. More hazardous plant erection and commissioning activity involves risk of accident and breakdown and as such manpower, plant and machineries are to be very well insured. Skilled manpower and technicians involved in plant construction and commissioning job must be well taken care by adopting suitable personnel risk policy in terms of heavy compensation to be paid in case of eventuality that may occur during the plant construction/erection stage. Internally an organisation has to adopt well laid safety and security measures as per the statutory requirements in order to avoid such eventuality and utilise the skilled manpower for more fruitful production and productivity for the organisation. At some stage of the plant construction/erection, it becomes extremely difficult to replace the particular skilled manpower specialised in critical jobs under-taken at Project site. The training of such key personnel takes lot of industrial experience to be inherited by a particular job worker/technician. Thus manpower must be taken care w611 to avoid accidents and at the same time they must be insured for paying the compensation in case of eventuality may happen.

2.2 Project Risks 

Project of b1g magnitude or to say mega scale are being established these days to achieve the economy of scale production to have the most competitive priced goods produced for forward marketing. Building such big projects certainly involve several thousand crores of Rupees investment. At the same time the project completion takes 36 to 48 months time duration. In order to secure the risk of such a huge investment in plant and machineries thet go into the building up of project, insurance becomes the pertinent part of its execution. Insurance policy to the extent of hundred and ten percent of the estimated cost plus freight of the goods is generally taken.

In a project generally sixty percent of the total finance goes in procurement of plant and machinery items. Normally Open Marine Insurance policy cover the risk of short supply, damage during transit, theft, stolen, pilferage damage or loss due to fire.

Marine-cum-Erection Policy: 

This insurance cover policy is normally utilised by the companies in the process of establishing plant/project for the manufacturing or production activity of the organisation. Here the risk is insured against loss, damage, liability or expense for cargo movement from suppliers’ country to the port of arrival in India. Also the goods required to be procured for the project or plant are insured against risks of physical loss or damage that may be incurred during inland transit by Rail or Road. Under the perview of this policy the risk of goods comprising plant & Machinery items are insured for safe carriage by sea,Rail, Lorry, Air, Courier, Post from supplier’s warehouse to Owner’s warehouse at project site, its storage and further handling upto erection at site. Marine Insurance Policy can be taken for hundred and fifteen percent of the value of goods being imported. Even after taking an appropriate insurance policy, its implementation during the pendency of project job is very much essential. The personnel responsible for its implementation during the time of actual requirement must be fully conversant and trained enough to take right action at the right time. Normally insurance jobs are also handled by a group of personnel involved in transportation of material from various sources to project site, custom clearance of imported consignments, movement of over dia and heavy consignments. The most important aspect of taking up the job of insurance claim from the insurance company is that of timely informing and lodging the complaint with complete back up documents to the company, continuous chasing up of the claim and getting the same settled from the company. Once there are accummulation of many claims, it is all the more necessary to have the regular monthly meeting involving the affected parties and the insurance company to review about the claim settlement. Timely settlement of the claim will certinly add to supplement finance requirement and replacement of damaged/lost goods can be done on ongoing basis till the project completion stage is achieved. At times it has been seen that claim has been lodged wrongly and in a inappropriate manner leading to disputed claim and the construction job is held up due to want of plant and machinery item. It is therefore, of utmost importance that claims are lodged in a proper manner alongwith full authentic documentation. Survey reports, if required by aproved surveyors as per the requirements of the insurance company the same are followed up on day to day basis so that the settlements are made within reasonable time limit. The aim is that big amount claim must got be settled in minimum possible time to save on financial costing. Under such a situation, it is very much necessary that the personnel involved in such type of jobs must have interaction with insurance personnel by way of having regular meeting and holding up the seminar about insurance requirement right in the beginning of project job with the insurance company to get acquaintance and training for taking up such jobs in a more professional manner in the overall interest of Project building.