Erection All Risk Insurance

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Erection All Risk Insurance Policy India

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What is Insurance What is Erection All Risk Insurance?

As the name states, an Erection All Risk Insurance Policy covers loss or damage in projects that involve erecting or installing a plant, equipment, or machinery. Such projects involve a lot of risk of physical damage or loss. Because of this, your business and construction operations might be put on hold and you will also face a high financial burden to recover the losses. Whether it is a small project of building a single machine or a massive project of constructing a large power plant, there is always a risk. Along with this, there is also a risk of loss or damage to the construction plant and equipment, machinery, the contract structure, etc. There is also a chance that you may cause bodily harm or property damage to a third party who will claim financial compensation for the same.

So an Erection All Risk Policy provides you financial reimbursement if any of these mishaps take place.

required insurance in India Who can take an Erection All Risk Insurance Policy?

Erection All Risks (EAR) Insurance, EAR policy India

All parties that are involved in any type of construction activities can avail of this insurance policy, either in the joint names of employer and contractor or individually by any of the parties:

  • Subcontractors
  • General/ Civil contractors
  • Manufacturers and suppliers of the equipment, machinery, or plants.
  • Purchaser or owner.

Key Features of Insurance India Vital features of an Erection All Risk Insurance Policy

This insurance policy is highly beneficial for any party involved in a construction contract, given below are the prominent aspects of Erection All Risk Insurance:

  • Comprehensive insurance coverage is provided for all erection and installation projects, it covers all the risks that might take place during the storage, installation/erection, and testing of the final results at the project site.
  • This policy offers coverage for the entire duration of the project rather than renewing on an annual basis, hence making it an easy process to buy the policy for any kind of project.
  • Various add-on covers can be included in the policy as per the requirements of the insured.
  • Financial protection is given to engineering and construction contracts in case any accident occurs.
  • If the policy period is more than 12 months then the premium can be paid on an installment basis.
  • Coverage is also offered for third-party losses and liabilities related to property damage as well as fatal or non-fatal bodily harm.

Inclusions Insurance Policy India Inclusions in an Erection All Risk Insurance Policy

The cover of this policy starts when the first shipment is unloaded and stored on the insured site and expires once the testing of the installation is complete or when the property is handed over to the employer or when the period of the policy is over.

The following perils are insured under an Erection All Risk cover:

  • Fire, lightning, and explosion/implosion.
  • Aircraft damage.
  • Collapse, impact damages, and damages due to outside objects.
  • Collision, impact, dropping, etc.
  • Short circuits, excess voltage, and arcing.
  • Flood, storm, and landslide
  • Mechanical and electrical breakdowns while installing or testing
  • Riots, strikes, and malicious damage.
  • Theft and burglary.
  • Faults in the erection or installation of a building.
  • Human errors and acts of negligence.
  • Any other damages that are sudden, accidental, and unpredictable, and are not excluded from the policy.

benefits of insurance India Add-on benefits in an Erection All Risk Insurance Policy

The policyholders can include a variety of rider benefits to their original policy by paying an additional amount of premium. This helps in extending the cover towards the following risks:

  • Cross liability
  • Third-party liability
  • Express freight charges
  • Air Freight charges
  • Additional custom duty
  • Cost of clearance of property site and removal of debris
  • Escalation
  • Damage to the surrounding property of the owner
  • Maintenance charges
  • Holiday and overtime cover

Exclusions Insurance Policy India Exclusions in an Erection All Risk Insurance Policy

The following losses and damages are generally not covered in Erection All Risk Insurance:

  • Damages and losses due to bad workmanship
  • Damages and losses due to defective design and materials used for casting.
  • Loss of inventory
  • A consequential loss like loss of earnings, penalty, or fines for delay of work
  • Manufacturing defects
  • War or warlike situations that result in loss or damage
  • Physical damage and loss due to nuclear activities, nuclear radiation, nuclear reaction, or radioactive contamination.
  • Loss or damage due to pollution.
  • Termination of work
  • Damage due to depreciation, gradual deterioration, or normal wear and tear.
  • Gross and willful negligence and misuse of machinery, equipment, etc.
  • Loss to workmen of the insured
  • Loss of or damage to files, accounts, drawings, bills, currency, deeds, stamps, evidence of debt, notes, packing materials, securities cheques, cases, crates, boxes, etc.
  • Any other exclusions explicitly in the policy documents.