Special Weather Products: ACE Spin Down

The Challenge
A chemical plant located near the Gulf of Mexico has a corporate requirement that calls for a phased shut-down/cool-down when the National Hurricane Center Strike Probabilities Index (Strike) reaches 15 (i.e. 15% probability of a nearby landfall) for a major hurricane. This is done to prevent potential damage to the reactor vessels and equipment from rapid cooling.

The Solution
ACE Spin Down can be structured to meet the corporate requirements for shutting down or cooling down the reactor vessels and equipment. In other words, ACE Spin Down covers the business interruption costs associated with spinning down operations.

Example Corporate Requirements:

If the strike probability for a hurricane reaches 15%:

• No new product batches are introduced into the reactor units, and ongoing reactions are allowed to continue.
• Business interruption cost is estimated to be $750,000 per day.

If the strike probability for a hurricane reaches 18%:

• Power to units not undergoing reaction is reduced at 12 hour intervals to allow for controlled cool down of the units.
• Additional business interruption and extra expenses are $1,000,000 per day.
• Combined loss at this point equals $1,750,000 per day.

If the strike probability for a hurricane reaches 20%:

• Plant moves to full shutdown mode. Any ongoing batch reactions are “quick killed” and unfinished product is dumped.
• Additional business interruption and extra expenses are $2,000,000 per day.
• Combined loss at this point equals $3,750,000 per day.

If the strike probability for a hurricane reaches 25%:

• Plant systems are fully shut down.
• Additional business interruption and extra expenses are $2,500,000 per day.
• Combined loss at this point equal $6,250,000 per day.

Features*
The ACE Spin Down policy will provide limits incrementally in accordance with the schedule, protocols, and customer estimated expenses at each step of the process.

• Policy Terms
  • No property damage required
  • Claims settlement is for a stated amount
  • Excludes named hurricanes at time of policy inception
  • Monoline policy
• Policy Limits – up to $10,000,000 limit per location.
• Minimum premium is $25,000.
• Quote Lead Time – 24 hours.
  • Simple and efficient claims process.

*subject to policy terms and conditions.