IRDAI License Number: IRDAI/INT/ISNP/2022/250

Erection All Risk Policy

Epoch Insurance Brokers Private Ltd.
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Erection All Risk Policy
Introduction
Who can take this Policy?
Coverage
Add on Covers
Basis of Sum lnsured
Exclusions
Introduction

Erection All Risks (EAR) insurance 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.

Who can take this Policy?

This policy is suitable for all types of civil engineering construction works ranging from small buildings to massive dams as they are susceptible to damage by a variety of external and internal causes during the course of construction and erection of plant and machinery respectively.

Coverage

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-erection of an existing facility

Add on Covers

The policy can be extended to cover the following on payment of additional premium :

  • Clearance and removal of debris
  • Escalation
  • Waiver of Subrogation
  • Design Defect
  • Off-site storage
  • Damage to owner's surrounding property
  • Maintenance visit / extended maintenance cover
  • Additional customs duty
  • Express freight
  • Air freight

Add on Covers - Free of Cost for Projects more than 100 Cr.

  • Clearance & Removal of debris upto 50 lacs
  • 50/50 clause
  • 72 hours
  • Loss minimization expenses
  • Free automatic reinstatement upto 10 % of the S:I
  • Professional Fees
  • Waiver of Contribution restricted between principal and contractor
  • Additional Custom duty upto Rs. 10 Crore
  • Expediting cost including Air Fright and Express Freight upto 30 % of net claim amount

Basis of Sum lnsured

The Sum Insured is the completely erected value of the plant and machinery, inclusive of freight, customs duty and cost of erection.

Exclusions

  • Loss or damage due to faulty design, or casting, bad workmanship other than faults in erection. This exclusion is limited to the items immediately affected and does not apply to any consequential loss to correctly executed items.
  • Cost necessary for rectification or correction of any error during erection unless resulting in physical loss or damage.
  • Loss or damage due to gradual deterioration, atmospheric condition, rusting etc.
  • Loss discovered only at the time of taking inventory.
  • Loss arising out of penalty for delay, non-fulfilment of terms of contract.
  • Consequential Loss
  • Excess

Why Choose PolicyLo.com

Professional and Experienced Team
Professional and Experienced Team
Customized Solutions
Customized Solutions
Strong Relationship With Insurance Companies
Strong Relationship With Insurance Companies
Service Commitment Ontime Everytime
Service Commitment Ontime Everytime
Technological Edge
Technological Edge
Additional Services Offered
Additional Services Offered
Competitive Premium
Competitive Premium
Single Window Solution
Single Window Solution

Important Points to remember while Buying the Policy

Adequate Sum Insured - To Avoid Underinsurance

Temporary Structure should be clearly mentioned

  • Almost in every project the requirement of temporary structure is there. It is the most important aspect to see at the time of taking the policy to clearly mentioned temporary structure and it's sum insured.
Ensure that assets should be covered under the right entity/company

Total Project Sum Insured and Total Project Duration

  • Total Project Sum Insured and Total Project Duration should be clearly motioned considering the general delays in project. It would be appropriate to insure the maximum period including the projected extension period.
Risk Location/s should be properly mentioned

Premium would be charged  form day one in CAR/EAR Policies

  • Premium would be charged from the beginning of the project i.e. when first consignment reaches at project site or any work started on site or project commissioning date as per LOI/Awarded Contract.
Downloads
Proposal Form
Proposal Form  
Policy Wordings
Policy Wordings  
Claim Form
Claim Form  
Key Documents
General Claim Intimation Format
General Claim
Intimation Format
Immediate Action Client Should Take
Immediate Action Client
Should Take
Indicative General Documents
                            for Settlement of Claims
Indicative General Documents
for Settlement of Claims
Peril Based Documents Required for Settlement
Peril Based Documents Required
for Settlement

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Claim Case Study - 1

1
Situation
Situation

In a erection policy for Transmission line project there was theft of huge amount of nuts, bolts, copper wire and other metal items. There was no sign of entry and exit and even the client was not able explain how it was possible for the thieves to take away the metal items weighing in thousands of Kilograms.

2
Challenge
Challenge

Losses that arise due to shortage and unexplained disappearance, evident at the time of taking the inventory are not payable under the policy.

3
Solution
Solution

Physical stock should be verified from time to time and an appropriate inventory should be made to exercise control over stored items.

4
Advisory/Conclusion
Advisory/Conclusion

Client was advised to take physical stock on regular basis so as to reduce the unexplained loss of Inventory.

Claim Case Study - 2

1
Situation
Situation

Faulty Design

2
Challenge
Challenge

Loss arising due to Faulty design was not payable under the policy taken.

3
Solution
Solution

Faulty design or design defect is a risk normally occurs in construction and erection. Coverage of risk vary insurer to insurer. If it is not covered in the basic policy, the add-on should be opted.

4
Advisory/Conclusion
Advisory/Conclusion

Design defect need to be added in the Policy.

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