DSU insurance, or Delay in Start-Up insurance, is a type of insurance that covers financial losses that may occur due to a delay in the start-up of a project. This type of insurance is particularly important for interconnected projects, such as those between a power plant, process plant, and smelter, as a delay in any one of these projects can have a significant impact on the others.
What is DSU Insurance?
In general, DSU insurance covers the financial losses that may occur due to a delay in the start-up of a project. This includes the costs associated with the delay, such as additional financing costs, increased operating expenses, and lost revenue. The coverage typically begins on the date that the project was scheduled to start and continues until the project is completed. This is very important to non-recourse financing projects because the loan are tied to the loan terms a borrower can receive, the majority of the risk and responsibility on lenders.
How does DSU insurance cover work for interconnected project?
For interconnected projects, DSU insurance can be structured to cover the entire project, rather than just individual components. This means that if there is a delay in any one of the projects, the insurance will cover the financial losses that may occur across the entire project. For example, if there is a delay in the start-up of the power plant, the insurance will cover the financial losses that may occur across the entire project, including the process plant and smelter.
It is important to note that the specifics of DSU insurance coverage can vary depending on the policy and the insurance provider. It is recommended that those involved in interconnected projects consult with an insurance professional brokers to ensure that they have adequate coverage.
If you have more question about DSU insurance, please feel free to reach out by email: leo.c@projectriskinsights.com
