The Schedule Loss the Cargo Policy Leaves Open
Consider a familiar scenario for an Indian developer in 2026. A single schedule-defining machine, say the main step-up transformer or the generator stator that the whole energisation sequence waits on, is sitting in a ship's hold somewhere off the coast. It is dropped during the lift across the vessel's rail, or it takes sea-water ingress in a flooded hold, or it goes down with the vessel in heavy weather. The marine cargo policy answers, values the machine and pays it, and on the cargo limb the developer is square: the price of the lost unit comes back.
What does not come back is the calendar. A unit of that size cannot be conjured up overnight; the order rejoins the maker's build slot, is rebuilt and despatched afresh, and that runs into seasons rather than weeks. Through those months the works stands idle, the commercial operation milestone walks backwards, the first earnings never arrive, and the debt-service obligation keeps falling due on the original schedule. The cargo policy, generous as it was on the unit itself, is silent on this far larger loss of time. The space between what the goods were worth and what their late arrival costs the project is the exact territory marine delay in start-up (DSU) was written to occupy.
For a build assembled around a few imported units this is no corner case. The finish line of a thermal station, a process train, a clinker line or a wind and solar farm hangs on a small number of large, sole-source, long-build items riding one or two sailings. Strike one at sea and the project does not lose the days a cargo settlement takes; it loses the months a remake-and-re-despatch consumes. Marine DSU is the instrument that converts that afloat schedule peril from an uninsured shock into a priced, payable financial outcome.
How the DSU Trigger Hangs Off the Underlying Cover
Marine DSU is never a free-standing buy. It is a named section attached to the project's marine physical-loss cover, and its whole trigger is borrowed from that cover, so the two travel together and have to be read together. Grasping how the section is wired into the underlying wording is the difference between a buyer who knows what will pay and one who finds out at the claim.
What the underlying physical-loss policy does is settled in a sister post on the procurement and carriage of imported plant; the point that matters here is what the DSU section adds on top of it. The DSU section converts an insured physical event into a financial-loss recovery for the time the event costs the schedule. Three wiring features define how that conversion works, and each is where a section is either correctly cut or quietly hollowed.
- Follow-the-physical-cover. The slip has to trace to physical loss or damage the underlying policy itself would indemnify. The DSU section follows the physical wording clause for clause: anything carved out of the physical cover is, by that very fact, carved out of the DSU. There is no independent DSU peril list; the section borrows every condition, warranty and exclusion of the cover it sits on.
- Schedule-defining unit. The hit must land on a unit whose lateness actually moves the energisation milestone. A bruised crate of fasteners, or a spare that sits in the warehouse with no bearing on the build sequence, yields a physical recovery and nothing on the DSU, because the calendar did not move.
- Time excess then indemnity period. Recovery starts only once the slip clears the time excess, a stated waiting period at the front of every covered delay that the developer carries itself, and is then paid forward, day by day, against the scheduled commercial operation date up to the agreed indemnity-period ceiling. The time excess and the ceiling together fix the exact band of delay the section will pay.
Because the marine DSU and the land EAR/CAR delay section answer two consecutive stretches of one calendar, they must abut cleanly at the site-delivery line where peril crosses from the seaward world to the erection world, with no daylight between them and no double-count across them. A well-cut programme runs both off one scheduled energisation date and one consistent peril basis, so delay protection is unbroken from the maker's gate through to commissioning, rather than two sections each presuming the other owns the join.
The Insurable Slip Versus the Everyday Slippage
The single line that decides most marine DSU disputes, and the one buyers most often read wrongly, separates a slip the section was built to answer from the ordinary slippage it was never built to absorb. Because the section follows its underlying cover, it pays for a movement in the calendar only where that movement was set off by insured physical loss or damage. Most of what actually drags an Indian project's energisation date backwards is not physical damage at all, and all of that falls outside the section.
The insurable slip. The date must have moved because a schedule-defining unit took insured physical harm in carriage: a casing dropped on discharge, a winding soaked by sea-water ingress, a stator crushed under a lashing that worked loose, a consignment lost when the vessel foundered or was sacrificed in general average. In each, the unit must be physically rebuilt or repaired, the underlying cover answers the unit, and the DSU answers the calendar loss that follows straight from that insured harm. The chain is short and physical: insured peril, damaged schedule-defining unit, rebuild lead time, late energisation.
The everyday slippage the section ignores. Marine DSU stays silent on every delay with no insured physical-damage event behind it, and on Indian project work those delays crowd in:
- Queueing and capacity: a ship swinging at anchorage, a berth waitlist, a crane shortage on the quay, or a lack of trailer capacity for the over-size move inland. Nothing was harmed, so nothing is owed.
- Border and paperwork holds: a unit stuck in clearance, a tariff-heading argument, an import-licence or BIS-certification wait, or a documentary mismatch. These are procurement and compliance delays, foreign to the section.
- A booking missed or a maker running late: the works despatches behind plan, a part-shipment misses its slot, or the build over-runs. The unit was never harmed; it simply turns up late.
- Delay treated as a peril in itself: standard cargo conditions bar loss proximately caused by delay even when an insured peril set that delay going. That is a separate doctrine, but it points the same way, the section answers physical harm and the calendar cost flowing from it, never the passage of time as a peril of its own.
- Causes that belong to the build, not the voyage: a drawdown hold, a clearance from a regulator that runs late, an EPC dispute, or a scope change. These are the project's own, and the section does not reach them.
The working lesson for buyers and brokers is that marine DSU is not blanket schedule insurance; it is harm-driven delay cover on the schedule-defining units, and its indemnity period should be cut to the realistic remake-and-re-despatch clock for precisely those units, while the everyday slippage (queueing, border holds, a maker running late) is bled out through procurement and logistics discipline rather than asked of the section.
Cutting the Time Excess, the Indemnity Period and the Gross-Profit Base
Because the section answers harm-driven delay on schedule-defining units and nothing besides, cutting it well is an exercise in three financial dials, the time excess, the indemnity-period ceiling and the gross-profit base, each set against the units that can actually move energisation, not against a stock loss-of-profits template.
Set the time excess to the slip the developer can genuinely carry. The waiting period at the front of every covered delay is where most under-thought programmes either over-pay in premium or under-shoot in protection. Too short, and the developer pays for trivial slips a buffer in the build plan would have soaked up; too long, and a serious but not catastrophic delay is handed straight back to the developer. The right excess is read against the float the energisation programme already holds on the schedule-defining units: where that float is thin, a long excess simply transfers a realistic delay back onto the balance sheet.
Pitch the indemnity-period ceiling to the remake clock of the worst unit. This is the most commonly mis-set dial. The ceiling has to span the entire delay that loss of the single most schedule-defining unit would force, the build-slot wait, the rebuild, the fresh despatch, and the second pass through erection and energisation once it lands. A ceiling that sits comfortably for an everyday consignment but falls short for the one irreplaceable unit leaves the worst-case exposure under-protected. This remake clock, not an on-site repair window, is what marks DSU as a seaward cover: it is measured in replacement lead time.
Build the gross-profit base from the project model, not a round number. The sum the section will pay per day is its declared gross-profit or standing-cost figure, drawn from the financial model and the lenders' base case rather than estimated, and it should be scaled to the output the schedule-defining units unlock over the period their loss would consume. Understate it and an under-declaration adjustment bites the recovery; let it drift as the start date and output firm up and the section will pay against a stale figure.
Re-test the dials against current build queues, not last year's. Continued volatility in heavy-equipment build queues has stretched the remake-and-re-despatch clock for large transformers, generators and process plant, so a ceiling and a gross-profit base rolled forward from a prior placement can be materially short. Re-size both against current maker lead times and current project economics rather than a benign carried-over assumption.
Abut the land delay section at the site-delivery line. Marine DSU and the EAR/CAR delay section must align at the handover from voyage to erection, on one energisation date and one peril basis, so delay protection is continuous. Project-finance papers routinely demand both with the lender's interest noted, and the insurance schedule, the lender's conditions and the sections as placed have to reconcile or a drawdown can stall.
Working these DSU-section dials across insurers is hard from certificates and wording PDFs strewn across email. Sarvada gives commercial-insurance brokers and corporate risk and project-finance teams structured, searchable access to insurer marine and delay-in-start-up wordings and the intelligence around them, so the follow-the-physical-cover wording, the delay-as-peril doctrine, the time-excess and indemnity-period mechanics and the DSU trigger can be compared across insurers and reconciled with the land delay section and the lender's terms before cover is bound. Project developers, EPC contractors and brokers structuring marine delay-in-start-up cover for Indian capital projects can Request Access to evaluate the platform.