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Erection All Risk Policy

Covers losses during machinery or equipment installation, providing vital financial protection for construction and manufacturing industries against various risks.

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What Is

Erection All Risk Policy?

An erection all risk (EAR) policy is an insurance plan that protects you when you're setting up machinery or equipment in a factory or office. It covers any losses or damages that happen during the installation process. If anything goes wrong, this policy helps you financially, which could slow down the installation and increase costs.

The coverage of an EAR insurance policy starts from the moment materials are unloaded at the construction site and continues until the project is finished and handed over to the client.

A common misunderstanding is that plants or machinery can only be insured after being installed and tested. However, with an EAR policy, you can get protection while the equipment is being installed, whether it's a single machine or a big power plant.

Features of Erection All Risk Policy

It offers comprehensive insurance for the erection of projects and provides cover during storage, erection, and testing of heavy plant & machinery at the insured site.

It provides coverage for the entire period of the project rather than on a yearly basis.

Customers can add various features as needed.

Who Needs

Erection All Risk Policy?

Contractors and employers can take out the policy jointly and individually. Any of the following parties involved in the construction process may be covered:

General contractors
Subcontractors
Suppliers and manufacturers of equipment
The purchaser or owner of the equipment

Why Get

Erection All Risk Policy?

If you're in the construction business, the erection all risk policy is really helpful. It's a complete insurance policy that protects you from things going wrong when you're installing, testing, and starting up equipment or machinery during construction. At BimaKavach, we can give you a personalized price from the best insurance companies at a price that won't break the bank.

Coverages & Exclusions in

Erection All Risk Policy

CoveragesExclusions

Once the first delivery arrives at the project site, the insurance coverage called EAR (Erection All Risks) starts. It lasts until the testing is finished or when the project is handed over to the main employer, whichever happens first. Here are some common things that are covered by this insurance.

Storms, Floods, Cyclones, Earthquakes, and Allied Perils

It protects losses or damages that occur because of these covered perils during the installation period. It includes damage to the construction site, materials, equipment, or structures resulting from storms, overflowing rivers, heavy rainfall, or other flood-related events, cyclonic events, tremors, other earthquake-related factors, and other related perils.

Third-party Liability

This add-on cover provides protection for legal liability related to accidental damage or loss to the property of a third person, arising out of the erection work of the insured. It also covers the legal liability for non-fatal and fatal injuries caused to a third person due to the work.

Fire, Explosion, Lightning, and Aircraft Damage

This cover refers to the protection provided for losses or damages that occur as a result of these specific perils during the construction or installation period. It includes damage to the construction site, materials, equipment, and structures due to fire-related incidents and explosions. This may be caused by factors such as gas leaks and chemical reactions, damage due to lightning-induced fires, electrical surges, and incidents where aircraft collide with the construction site, equipment, or structures, causing damage or destruction.

Negligence and Human Errors

EAR insurance policies often include coverage for loss originating from negligence and errors in the design, planning, or supervision of the erection work. An EAR insurance policy may also cover liability claims in cases of negligence or human error resulting in third-party injuries or property damage. This includes legal defence costs and any settlements or judgments against the insured party due to their negligence or errors.

Burglary and Theft

This coverage addresses the risk of theft or burglary-related incidents that may occur at the construction site or involve the insured property. It applies to theft incidents involving construction materials, equipment, tools, machinery, or other valuable items related to the project. It also provides coverage for losses or damages resulting from burglaries, which involve unauthorized entry or forced entry into locked premises or storage areas.

Faults in the Erection of a Building

This policy covers damage to the construction site, materials, equipment, or structures caused by riots, demonstrations, protests, or other forms of public disturbance. It also includes damage resulting from strikes, lockouts, labor disputes, or other related events that may affect the construction project.

Riot & Strike

This coverage covers damage to the construction site, materials, equipment, or structures caused by riots, demonstrations, protests, or other forms of public disturbance. It also includes damage resulting from strikes, lockouts, labor disputes, or other related events that may affect the construction project.

Erection All Risk Policy Examples

Incident 1Incident 2

Claim for Machinery Collapse During Installation

Bangalore Metro Rail Corporation Limited (BMRCL) deployed nine Tunnel Boring Machines (TBM) last year to dig tunnels between Dairy Circle and Nagawara. Rudra, one of the Tunnel Boring Machines (TBMs) faced a huge pile of garbage which caught the cutter head of the machine, preventing it from moving. Luckily, 6 months later, the machine achieved a breakthrough and tunneled towards Langford Metro station. However, in such cases, there is a high probability that the machine can have severe damage. Not only this, there could be multiple instances such as landslides, earthquakes, or fire incidents which can also lead to damage to the heavy machinery used in construction projects. Here, the Contractor's Plant & Machinery (CPM) Insurance Policy comes to the rescue of the contractor. The policy covers the cost of repairs or replacement of the damaged machinery.

About Erection All Risk Policy

What is the difference between CAR and EAR Policies?

Who can take the EAR Policy?

What is the extended maintenance period in the EAR policy?

Is the erection all risk policy compulsory?

Is there any specific time limit set for submitting claims under the erection all policy?

What are the documents required for filing a claim under the erection all risk policy?

Who can be insured under the EAR Policy?

How is the premium computed for the erection all risk policy?

Can the erection all risks insurance policy cover financial losses caused by delays in the completion of the project?

What do AOG perils mean?

How is the premium calculated for erection all risk?

What is the claim procedure of EAR policy?

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This is an article by YouStory written by Palak Agarwal and published on October, 2022

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BimaKavach Insurance Broking Pvt. Ltd. | CIN- U66010MP2022PTC059393 | Registered Office- Flat No 201, Classic Avenue, 184 Shrinagar Main, Indore Madhya Pradesh India- 452018 | Phone No.- 9036554785 | Email- support@bimakavach.com

BimaKavach is registered as a Direct Broker | Registration No. 901, Registration Code No. IRDAI / DB 985/ 2022, Valid till 25/06/2026, License category- Direct Broker (General).

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