Erection All Risk (EAR) insurance is tailored to cover loss or damage to projects involving the erection or installation of plant, machinery, and equipment, providing essential protection for construction endeavors.
Coverage
Storage Risk: Coverage begins upon unloading machines at the site. Damage due to fire, storm, flood, and theft of parts is covered whether machines are stored in open or closed spaces.
Shifting: Moving machines for erection poses risks. Damage caused by lifting equipment or forklift accidents is covered under EAR insurance.
During Erection: From machines toppling over to fire during welding, all damages during erection are included in the policy.
During Testing: Testing phase damages like short circuits, misalignment, and operator errors are covered.
Who Can Be Insured
The policy can be taken by the principal, contractor or subcontractor, jointly or separately.
Policy Sections:
Section I-Material Damage – Covers physical loss, damage or destruction of the insured property by any cause other than those specifically excluded in the policy.
Section II-Third Party Liability – Covers the legal liability falling on the insured contractor as a result of bodily injury or property damage belonging to a third party.
Sum Insured:
Section I – Material Damage
A. Landed cost of imported machinery as at Factory Site (i.e. @ Exchange rate)
B. Machinery fabricated or manufactured in India
C. Cost of Foundation relating to (a) & (b) above
D. Cost of Erection, including salaries of all foreign and Indian technicians and wages of all skilled and unskilled labor employed at factory site during erection
E. Cost of civil works
F. Free material issued by the principal
Section II – Third Party Liability
The sum insured under section II should represent the per accident limit (the maximum legal liability that may fall on the insured because of an accident in the insured’s site). The limit per policy period should be fixed, considering the maximum number of such accidents which can reasonably be expected to occur.
Period of Insurance
The period of insurance should be equivalent to the period of the contract, commencing from the date of unloading of the first batch of material at the site of erection and expiring on the date of handing over of the contract work to the principal. In case of delay in completion of work, the policy can be extended by paying an additional premium depending upon the extension period.
Important Exclusions under Section I
- Excess – The First amount of each loss to be borne by the insured.
- Faulty design
- The exclusion of defective material / workmanship is limited to the parts of the structure immediately affected and does not apply to any consequential loss to correctly executed items, arising out of the accident due to defective material or workmanship.
- Loss discovered only at the time of taking inventory.
- Loss arising out of penalty for delay or non-fulfillment of terms of the contract.
- Consequential loss
For any insurance solutions, please contact Beacon Insurance Pvt Ltd at https://www.beacon.co.in/
Insurance is a subject matter of solicitation
