2022 – Do you give a dam? Insurance Considerations for Dam Portfolios

Topham, C – GHD Pty Ltd, Williams, A.- Lockton Australia, Jayaratne,R – Lockton Australia

Securing property and liability insurance for dams and tailings storage facilities is becoming increasingly challenging due to a tightening global insurance market. Compounding this difficulty, utilities tend to manage their insurances out of their finance or risk departments, often resulting in a disconnect between insurance underwriters and the key staff who can help them understand the risks, namely operators and dam safety managers. Yet insurance is a critical component of an overarching strategy of delivering “sustainable, whole-of-life management of dams”. Further, insurance premiums can represent a large proportion of annual operating budgets for dam owning entities. With dam owners and their consultants focussed on the technical and engineering aspects of dams management, they can become remote from insurance matters. Insurance brokers and underwriters, who need regular updates on dam safety programs and status, receive updates “second hand” through insurance managers. This paper is derived from the experiences of a dam safety manager turned risk manager, and insurance brokers active in the utilities insurance market. The paper draws on their challenges in presenting annual updates to the insurance market on progress through the dam safety program, and how they differentiated the owner’s risk within a turbulent insurance market. Practical guidance is provided for other dam owners, and their consultants, on measures that can be employed to present compelling annual renewal updates to the market, towards developing better relationships with underwriters, in order to deliver the most competitive pricing and coverage results, particularly during hardening periods of the insurance market cycle.

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