Survivors Have a Claim:

The Dam’s $50 Million Dollar Liability Insurance


Insurance coverage is vital for the development of an infrastructure project as large and risky as Xe Pian-Xe Namnoy. The project has roughly USD50 million in liability coverage that affected people in Laos and Cambodia may be able to claim for the damages they have suffered. However, most affected people are unaware of the existence of this coverage, much less their right to make claims, because it has not been disclosed publicly.

AON Thailand, the project’s insurance advisor, was responsible for arranging insurance for the project’s various components, including the liability coverage. The USD50 million in liability coverage is divided between two policies: USD10 million that is part of a larger construction insurance policy taken out by the EPC contractor, SK Engineering & Construction, and a USD40 million excess of loss liability policy taken out by the joint venture developing the dam, Xe Pian-Xe Namnoy Power Company.

Three insurers are backing the $50 million in liability coverage spread across the two policies. The U.S. firm AIG is backing the bulk of the liability coverage. Two Korean insurers, Korean Re and Samsung Fire & Marine, are backing the remainder of the coverage. The two Korean firms have reinsured their exposure with the Singaporean firm Asia Capital Re

Inclusive Development International learned the following details about the policies from a confidential source. The insurance companies did not respond to requests to confirm this information:

  • Construction Liability: As EPC contractor, SK Engineering & Construction was responsible for securing construction insurance coverage for its work on the dam. This policy would have focused primarily on damage to the dam structure itself, but it also had a USD10 million liability component. AIG holds 25% of the policy, and thus USD2.5 million of the liability component. Korean Re and Samsung Fire & Marine hold the remaining 75% of the construction policy and the corresponding portion of the liability component. Asia Capital Re is reinsuring the two Korean insurers. 

Excess of Loss Liability: After the USD10 million liability component of the construction insurance is exhausted, the USD40 million excess of loss liability policy comes into play. The same insurers backing the construction policy are also understood to be backing the excess of loss liability policy: AIG backs 59.5% of this policy; Samsung Fire & Marine backs 30%; and Korean Re backs 10%. As with the construction policy, Asia Capital Re reinsures the two Korean firms’ exposure.