Premium rise for big projects

The recent road collapse caused by a sinkhole in front of Vajira Hospital has drawn attention to insurance coverage for large-scale construction projects in Bangkok, with industry executives saying rising risks in the capital could push up premiums for large projects in the future.

- NUNTAWUN POLKUAMDEE

The incident occurred near the future Vajira Hospital Station, prompting the Mass Rapid Transit Authority of Thailand to order a temporary halt to construction on the project, which is part of the new MRT Purple Line.

According to industry sources, the project was insured for a combined value of 19.4 billion baht by three major insurers: Bangkok Insurance (BKI) (40%), Dhipaya Insurance (40%), and Muang Thai Insurance (20%).

The policies cover assets under construction, machinery, thirdparty property damage, and accidents affecting external parties. The cause of the collapse, whether due to a water pipe leak or ongoing construction, remains under investigation.

If construction is found to have been the trigger, liability is covered by the project's insurance policy.

Apisit Anantanatarat, chief executive of BKI, said the damage is estimated at 2 billion baht. With BKI's share accounting for 40%, that translates to roughly 800 million baht in damage liability for the company.

BKI reinsured 99.875% of its exposure, leaving it with a direct liability of just 0.125%, or roughly 1 million baht.