Erection All Risks Insurance Policy
All projects involving storage of equipment, moving or expanding a facility, or dismantling and re-constructing it, leave your organization open to significant risk. Erection All Risks (EAR) policy offers protection to principal and contractors and also to manufacturers and suppliers erecting machinery and plant etc. against financial loss due to any sudden fortuitous and unforeseen causes resulting in loss or damage to the property insured at the project site whilst being stored, erected, tested and commissioned. Erection All Risks covers all types of large and small projects including the erection of thermal power stations, fertilizers, plants, oil refineries or the installation of complete factory facilities, which bring about a myriad of risks for both the contractors and the principal.
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This policy is typical “all risk” insurance for storage, assembly/erection, testing and commissioning of the following types of activities. Unless specifically excluded, it provides comprehensive cover for:
- Setting up a new project/individual machines.
- Expansion of an existing project.
- Dismantling and re-assembly of an existing facility.
- The interests of suppliers, manufacturers, contractors as well as subcontractors can be included in the policy.
- Cover begins from the time of unloading of the first consignment at the project site and terminates on completion of testing or handing over of the project to the principal, or the period chosen.
- Loss discovered at the time of taking inventory.
- Normal wear and tear. Gradual deterioration due to atmospheric conditions or rust.
- Scratching of the painted or polished surface, breakage of glass.
- Loss or damage due to faulty design, defective material or casting and bad workmanship (limited to items immediately affected).
- Damage to files, drawings, accounts, and bills, etc.
- Contractor’s plant and machinery loss or damage by its own explosion/mechanical electrical breakdown/derangement.
- Loss or damage due to nuclear reaction, nuclear radiation or radioactive contamination.
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