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The Role of Insurance in Ship and Oil Gas Finance Structured Deals Such as Project Finance and Project Bond

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Document pages: 93 pages

Abstract: This thesis aims to analyse the role and the importance of the insurance policies in structured finance deals such as Project Finance and Project Bond in respect of the construction and operation of ships, energy and oil & gas projects, in accordance with the common law, marine and energy insurance, ship finance aspects and international market practice. The tripartite between bank, shipowner and insurer not only provides integrated mechanism to transfer certain risks in case of an insured event but will also enable an additional and qualified diligence to be peformed by all parties involved.Further, as will be presented, the history of insurance is intrinsically connected to the maritime adventures history. The development of the maritime business is also directly related with the availability of credit by the market, from banks and investors, who also expects to protect as much as possible the borrowed amounts or capital invested.The thesis also provides a synoptic overview of the main concerns from the banks and shipowner’s perspective regarding the risks involved and the insurances that are usually contracted, or should be considered, with the objective to optimize the bankability of a project and the deal. Notwithstanding the fact that eliminating all the risks is certainly not possible or feasible, banks and shipowners do have the option to transfer part of the risks to the insurance market, reducing significantly some exposures which will impact in a positive way the ship financing costs, in addition to avoid potential litigations between the parties.

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