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Advance Loss of Profit / Delay in Start Up
“Delay in Start-Up (“DSU”) or Advance Loss of Profit (“ALOP”) insurance cover is an absolute necessity for large and/or complex construction or engineering projects, particularly those financed with structured debt.
This insurance was designed to provide cover for the economic losses sustained by a project owner and the financing consortium as a result of insured delays in construction that result in a delay in the commencement of commercial operation. Accidents in construction may lead to slippage in the construction program, pushing back the start date of commercial operations, and resulting in financial loss as expected revenues fail to materialise whilst expenses continue.
SERVICES
These types of losses are unique by virtue of the fact that there is no historical trading data which is available to ascertain how successfully or otherwise operations are.
Typically MDD will quantify the cost associated with the inability to cover fixed costs, net profit or debt servicing, due to the delay in its ability to generate revenue.
MDD works closely with delay experts and other experts to ascertain the applicable delay between the scheduled commencement of operations and the revised commencement of operations due to the covered incident and the resulting financial loss. We will:
- Identify the key data that will enable our experts to accurately quantify the loss
- Apply various techniques to validate the accuracy/reasonableness of business forecasts/budgets
- Examine detailed planning documentation and loan agreements to model fixed / financing costs associated with a project
- Work closely with other experts in identifying applicable delay period
- Provide interested parties with an independent report which accurately articulates any differences in quantified losses
- Prepare reconciliation analysis to assist parties in identifying major points of difference if they arise.
- Provide expert evidence as required.
Experience
Experience
Contact one of our experts below or filter experience based on region.
ARTICLES
RELEVANT ARTICLES
Our experts are extremely knowledgeable about thier subject areas and often write educational material and commentary on topical issues they come across.
Adding up Cost of Construction Delays
No one likes delays. Whether it’s a rain delay at a sporting event or a subway delay stuck somewhere beneath the city of Toronto, delays cost us time that we would rather have spent doing something else. Sometimes, however, delays...
Stemming the Spiralling Cost of Delay: Delay in Start Up (DSU) or Advance Loss of Profit (ALOP) Insurance Cover
Delay in Start Up (DSU) or Advance Loss of Profit (ALOP) insurance cover is an absolute necessity for large and/or complex construction or engineering projects, particularly those financed with structured debt. This insurance was designed to provide cover for the...
