Risk Management and Insurance Assignment - DOC

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					          Method Statement – Environmental Insurance and Risk Management

                                                                                STAKEHOLDER MANAGEMENT
Risk Appraisal

•   Risk Assessment                            Challenge         Sustainable
                                                                  Solutions           Sustainable
•   Risk Management                          Review project
                                                   scope,       Extended BPEO           Design &
                                                 regulatory     methodology for       Procurement           Risk
•   Risk Reduction                           drivers & design   assessment of
                                                                                         Practical       Management             Asset
                                             criteria against   options against                                              Optimisation
                                                                                     procurement and     Ensure what is
•   Insurance Optioneering                    sustainability        range of
                                                                                      design tools to      designed &            Process
                                                 objectives                            assist design                         optimisation to
                                                                  economic &                               planned is
•   Appropriately Targeted                                       social criteria
                                                                                     teams in making     carried out with   minimise ongoing
                                                                                                                            cost and impact
                                                                                        decisions to        minimum
                                                                                         maximise        resource use &     Ensure delivered
                                                                                                                            asset is meeting
•   Cost-effective                           THE VALUE CURVE
                                                                                                              impact           stakeholder
•   Duration
                                              Strategy &        Feasibility &        Procurement &
•   Assignment                                 Planning         Optioneering             Design          Construction         Operation

•   Flexibility                                                                    PROJECT LIFECYCLE

•   Reliability
MWH can provide advice, support and reports on risk management responses and the use of
appropriate environmental insurance options for managing customers liabilities.
MWH’s approach to providing appropriate risk management and insurance solutions is to
understand the nature of the risks involved and the manner in which these expose a customer’s
business to liability. Stakeholders in this process, such as land owners, occupiers, funders,
vendors and members of the public can be very varied and, by considering their needs, value
can also be added to MWH’s customers. For example, by eliminating public concern over
residual risks on a site, the value of the land under consideration may be greatly enhanced.
Alternatively, the effort and expense of managing risks on an operational site may be reduced if
the risk itself is identified and managed differently.

Understanding Risk

Typically there are four main steps that MWH would aim to work through when assessing a
customer’s risks within their organisation:

Risk Appraisal – MWH will identify risks in its organisational activities and in the external
environment; assist customers in working towards a common management understanding of
individual risks and in raising awareness of current risks within customer organisations.

Risk Assessment – MWH would quantify risks on a common and agreed basis across a
customer’s organisation and aim to reveal critical risks with a high priority for management
action and the associated cost of such risks.

Risk Management – MWH would identify the most cost effective risk management framework to
monitor and evaluate existing and future risks drawing on a range of expertise in risk
management techniques.

Implementation – MWH would assist customers in establishing a mandate for risk management
within their organisation, in allocating risk responsibilities throughout a customer’s organisation
and in providing a basis for ongoing monitoring and evaluation of risk management processes.

Insurance Solutions

Based on an understanding of the technical risks, gained from environmental reports, MWH can
assist customers in acquiring environmental insurance solutions for up to 25 years. They are
transferable on change of ownership of the land and can be written so as to allow for later
subdivision of the land in question and to protect the original landowner from any residual

    liability. They can be structured to respond to a wide range of associated financial risks,
    including historic contamination, ongoing site operations and the associated financial risks and

    The insurance is for ‘contamination’ as defined in the policy that: originates on-site and stays
    on-site and/or originates on-site and migrates off-site and/or which originates off-site and
    migrates on-site. ‘Specified use’ cover can be provided for contamination that renders the site
    unsuitable for a specific category of use whether or not legal action is taken, for example, by a
    neighbour or by a regulator such as the Environment Agency. Where clean-up costs are
    incurred under the direction of the regulator these can be met by ‘clean-up liability’ cover.
    There is full civil liability protection against actions by third parties, and legal defence costs are
    covered for cases of criminal liability (it is not possible to insure against criminal liability as
    such). Personal liability of directors and officers arising under common law or statute can also
    be insured.


    Risk management and insurance advice will be provided by an experienced team of consultants
    drawn from MWH and its sub-consultants located across the UK, with management and
    direction from MWH’s Duncan Russell. Duncan is a hydrogeologist with 20 years experience in
    environmental risk management and insurance provision in the property sector and other areas.
    The team will be structured so that where site visits are required the staff from the nearest
    office are used enabling cost savings to be made to the customer in terms of mobilisation.

    All projects will be managed in accordance MWH’s Product Delivery System, which includes both
    MWH’s quality assurance and environmental management procedures.


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