DSU / BI Claims

DSU Claim Analysis or Delay in Start Up [DSU] is also referred to as Advanced Loss of Profits [ALOP]. DSU insures project owners for the financial consequences of a delay to project completion arising from an insured physical damage event. Typically, DSU is purchased for the project owner.

The indemnity granted under a DSU policy may reimburse the owner only to the extent that they have actually suffered a loss. At Kenzie, we use our skills and expertise to particularise and quantify the delay caused by the insured physical damage event only.

The policy will usually contain a DSU trigger date. It is the agreed date the project was anticipated to be complete and the commercial operations would begin. Such date may be linked to a contractually defined term. Typically, there are 3 key criteria for payment of a DSU claim:

• An event indemnifiable under the physical damage policy.
• The resultant delay exceeds the DSU deductible.
• A resultant loss of the interest insured (e.g. Gross Profit).

At Kenzie when we are analysing cause and effect, we will take into account the effect of any uninsured events (such as poor contractor performance, late delivery of equipment etc) which have delayed project completion. This is the pivotal role that our forensic delay analysis takes in the evaluation of any claim under a DSU policy.

Forensic Delay Analysis

At Kenzie we are experts in forensic delay analysis. Our skills have been utilised by parties both preparing and defending delay claims. We will use our skill to undertake a DSU claim analysis to help insurers, insured and loss adjusters alike resolve complex DSU / BI claims through forensic analysis.

Most of our consultants have worked on live construction projects and fully understand the construction process. In addition, when we are instructed to prepare delay claims we forensically analyse all aspects of the project and the schedules to determine all potential delay events.

We believe this gives us a more detailed knowledge and understanding of the problems faced by these projects, whether caused by an insurable event or not and this can be invaluable when attempting to ascertain the actual status of the project prior to the insurable event happening.

In the event of a claim under the DSU or BI policy, we will usually ascertain:

• The actual status of the project progress at the time of the physical damage event occurs.
• The robustness of the reported progress at this time i.e. does it in fact take account of all known delays.
• The existence of concurrent or other delays that could have potentially affected the completion date.
• The but for revenue situation of the insured business had the loss not occurred.
• The potential for any mitigation or acceleration plans to reduce the potential losses.
• The effect of the deductible or “waiting period” on the indemnity claimed.