Parametric Insurance against excess precipitation & other climate risks: an innovative solution for the construction industry

Parametric Insurance against excess precipitation & other climate risks: an innovative solution for the construction industry

Adverse weather affects 45% of construction projects globally, resulting in billions of dollars in additional expenses and lost revenue. From extreme temperatures to excess wind or rain, adverse weather increasingly disrupts well-planned processes and timelines, representing the leading cause of construction project delays, and subsequent penalty and financing costs. These impacts come both as direct and contingent business interruption losses, often uncovered by traditional policies.

The construction industry tends to take the full brunt of adverse weather conditions, as projects operate year round. Work suspension, project delays and damaged equipment all force contractors to pay hefty additional project costs. As abnormal weather conditions heighten the pressure on construction companies, comprehensive coverage for weather-driven project delays doesn’t exist in the traditional market.

Parametric risk transfer solutions offer access to new sources of capacity globally.  These tailor-made and adaptable policies offer an alternative to traditional financing options in the aftermath of delays or damages, ensuring clear terms and expected payouts precisely when contractors require them. Descartes’ parametric insurance for perils such as excess precipitation offer swift liquidity and are structured to directly meet the  client’s needs, budget, risk appetite, and asset location(s). With a parametric cover in place, contractors can hedge delayed start-up impacts and benefit their bid by tangibly derisking exposure for the developer.

Protecting ongoing projects amidst weather & climate uncertainty – Descartes’ parametric insurance offers financial protection against adverse weather.

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