Lockton Real Estate and Construction

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1 Lockton Real Estate and Construction Insurance Due Diligence and Project Co-ordination Services Safeguarding Transactions for Property Investors/ Lenders/Developers/Fund Managers

2 The largest and longest established combined real estate & construction team in the London insurance market Market leading 98% client retention 95+ dedicated skilled Associates within the team Introducing Lockton Real Estate & Construction (REAC) Our highly experienced team comprises of Partners and Associates who collaborate to deliver specialist advice on insurance products, services and risk management matters. Specialist real estate and construction sector experience REAC Partners and Associates located in London, Finchley, and Sydney Asset II our own extensive real estate policy wording Our expertise is in real estate, construction, engineering and contingency and special risks. We arrange cover for our clients global real estate assets, with values in excess of 160 billion and are one of the leading specialist providers of insurance solutions to the real estate and development industries, which are investing and developing globally. IT systems that work for you Arrange cover for sums insured in excess of 165 billion for globally placed real estate assets Captive structuring placement and programme Clients around the world trust us to protect their business needs. Each benefits from our breadth of experience and expert advice, including dayto-day support from senior practitioners, backed up by our negotiating power and unparalleled access to the global insurance market. Dedicated Contingent and Special Risks Practice for rights of light, environmental, title, judicial review and other indemnity structures Expert Due Diligence Practice for transactional due diligence and project co-ordination Insurer leverage to achieve comprehensive and competitive insurance placements Specialist Risk Management expertise Lockton Claims Code Standard of Excellence

3 Insurance Co-ordination and Due Diligence - What we do From the very beginning of our business we have guided our clients through many real estate and construction transactions. Typically, we work with our client s team of legal and financial professionals to review, evaluate and report on areas of insurance coverage. Whilst the scope of our role varies from deal to deal, we have the flexibility to deliver bespoke services for you within the three core categories of due diligence, lender protection and project co-ordination. Our aim is to identify risk areas and bring insurance solutions that deliver greater financial security. Our team responds rapidly, eliminating delays which could otherwise adversely impact the transactional outcome. We have also identified natural synergies over the years within our Lockton business and work in close partnership with our Transactional Financial Risks team which comprises of experienced corporate lawyers, underwriters and brokers. Our team will work in partnership with your professional advisors to: Review Report Advise Deliver Insurance Solutions How does this look in practice? Our team recently reviewed insurance documents, property inspection reports, loan facility requirements and claims details across 80 pan European real estate assets. This culminated in a red, amber, green response report being delivered within a two a week period, together with a Warranty and Indemnity Insurance solution and placement. Value this delivers: Shortens the conventional due diligence process Saves cost and time Security of real estate assets through insurance solutions Benefits Representation and Warranty coverage availability.

4 A range of transactional services - bespoke to your requirements We remain flexible in our approach and will tailor our services to fit your requirements. Here are some examples of our core scope of services: Single properties Corporate transactions Core Categories: 1 Project Due Diligence Portfolio of properties Review of the general business activities and the insurable risks to which the assets or business is exposed Review of documentation provided, specific to any existing insurance programmes Advise on any insurable risks to which the business is exposed, which are not covered by existing insurance arrangements, including coverage under third party insurance arrangements Review of claims data and comment on significant incidents that may cause concern and any potentially uninsured aspects Comment on the specific lender insurance requirements from the loan Facility Agreement and ensure the coverage remains compliant with the relevant insurance clauses Comment on any areas where one-off insurance policies are of benefit Review premium structures, adherence with premium credit terms and benchmark premiums against the competitive broking outcomes REAC would achieve. Debt portfolios Fund structure review Professional Indemnity Directors and Officers Crime Cyber

5 2 Lender Protection Review of borrower insurance documentation to confirm compliance with the loan Facility Agreement insurance clauses Facilitate changes to Borrowers insurance arrangements to satisfy loan Facility Agreement insurance clauses Established contingent coverage solutions for loan Facility Agreements and financed real estate. 3 Project Co-ordination Providing the advantage of our strong insurer relationships to facilitate improvements to third party arranged coverage in partnership with your legal advisors. As an example, a client takes a long leasehold interest in a development scheme and is required to satisfy insurance clauses imposed through their lender. The insurance for the development is arranged by the Freeholder with Lockton co-ordinating the Leaseholders lender insurance requirements with the Freeholder, their insurance broker and lawyers, to reach a compliant outcome. What you can expect Meet and agree due diligence scope Bespoke scope issued by Lockton for agreement Data room integration Lockton Response report issued

6 Facilitating Your Transaction Recent examples of where our team has facilitated the smooth and timely completion of real estate transactions and delivered financial security. Meeting a Lenders Insurance Requirements (where you do not control the insurance placement) Mortgagee in Possession and Contingent Coverage A high profile Private Rented Sector scheme where the Freeholder placed the construction Project insurance. The long Leaseholders debt financing required them to satisfy the usual lender insurance requirements. This was complicated as the long Leaseholder did not control the construction and completed building insurances. They called upon our team to assist and co-ordinate matters with the Freeholder and its advisors. We engaged with the Freeholders insurance broker and lawyers to facilitate the long Leaseholders financier requirements. This required our team to co-ordinate sum insured uplifts and drafting of policy clauses to satisfy the Lender, following which, our client was able to complete their debt facility for funds to be drawn down. A client in the lending sector acquired a mortgage book consisting of in excess of 5,000 residential properties. Initially the onus was on the client to audit the borrowers insurances in place. This would have been a significant administrative burden to carry out this process. We delivered a solution by placing a bespoke contingent insurance policy. This protected the lenders outstanding loan interest in any given property, in the event of a failure of the borrowers insurances. The contingent nature of the insurances, together with the policy structure, ensured that an extremely competitive premium rating was agreed with insurers.

7 Expert knowledge Our established Due Diligence team comprises of six professional insurance experts from our REAC team, who have been selected due to their strong due diligence experience. Our Due Diligence team pairs perfectly with our existing Contingent and Special Risks practice, where we specialise in Rights of Light, Title, Environmental and other indemnity risks. Please speak to your existing REAC contact or one of the Due Diligence team below. Ben Warman Partner Member of the Lockton REAC Executive Committee Tel: +44 (0) Mob: +44 (0) Phillip Hawkins Vice President Tel: +44 (0) Mob: +44 (0) Ian Blackadder Partner Tel: +44 (0) Mob: + 44 (0) ian.blackadder@uk.lockton.com Adam Pursey Vice President Tel: +44 (0) Mob: + 44 (0) adam.pursey@uk.lockton.com David Lyle Senior Vice President Tel: +44 (0) Mob: +44 (0) david.lyle@uk.lockton.com Vicky Keene Vice President Tel: +44 (0) Mob: +44 (0) vicky.keene@uk.lockton.com Toni Longman Senior Vice President Tel: +44 (0) Mob: +44 (0) toni.longman@uk.lockton.com

8 Our Mission To be the worldwide value and service leader in insurance brokerage, risk management, employee benefits, and retirement services. Our Goal To be the best place to do business and to work. A division of Lockton Companies LLP. Authorised and regulated by the Financial Conduct Authority. A Lloyd s broker. Registered in England & Wales at The St Botolph Building, 138 Houndsditch, London, EC3A 7AG. Company No. OC Case studies correct as at date of publication (May 2017). Cover is available subject to your particular circumstances and the underwriters acceptance of risk. Additional terms and conditions (including exclusions and restrictions) may apply.