Continuing the Marine DSI Insurance Series:

Marine DSU Interests:

The original Marine DSU wordings were very basic and designed to indemnify an insured for a proportion of standing charges to continue, irrespective of any reduction in the revenue stream. It would be calculated as a simple rateable percentage that standing charges bear to anticipated revenue that would be applied to any reduction in turnover. Often it was quoted as a daily monetary amount.

Over time, cover was expanded to include an element of net profit under a rudimentary ‘additions method’-style loss of profits insurance. The range of interests has evolved further as project owners, financiers, and brokers have gained an appreciation for the precise needs of a specific project.

One school of thought is that there is?commercial sense in making arrangements for both the material damage and business interruption insurances to be with the same underwriter.?The idea behind this is to assist in striking an equitable balance between the suitability and economics of a repair, which is relevant to the material damage, and the time taken to repair, which is relevant to the business interruption.

Though the construction policy excludes the costs of repair to the defective item itself but allows for the costs of rectifying resultant damage, it is only the delay referable to the repair of the resultant damage (over and above any concurrent delay) which will be a relevant delay for purposes of the DSU calculation.

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