Erection All Risk
Projects that involve storage of equipment, moving or expanding a facility, or dismantling and re-constructing it can leave your business vulnerable to several significant risks.
The Erection All Risk Insurance Policy assures protection against such risks. The comprehensive and exhaustive nature of its coverage makes it a suitable solution for businesses with diverse needs.
This policy is a 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
- 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, whichever is earlier.
- The Erection All Risk Insurance Policy is generally recommended for businesses involved in construction. These include –
- Contractors and Sub-contractors
- Suppliers or manufacturers of construction equipment
Key features of the Erection All Risk Insurance Policy
- Comprehensive Coverage
- An Erection All Risk Insurance Policy can provide comprehensive coverage against a number of eventualities including –
- Natural calamities like flood, storm, cyclone, landslide etc.
- Other eventualities like fire, explosion, lightning etc.
- Human errors, negligence.
- Damages caused in a riot, in a strike or any malicious acts.
- Burglary and theft
- Faulty construction
- Impact damage
- Coverage duration is flexible
- Coverage under an Erection All Risk Insurance Policy is provided not on an annual basis but on a project basis – this means that a project will never run out of protection.
- Available Extensions and Add-ons
- An Erection All Risk Insurance Policy can provide several add-on benefits to the insurer, at an additional premium. These include –
- Third party liabilities
- Any additional custom duty
- Cost of damage to surrounding property
- Overtime charges
- Maintenance costs
- Air and Express Freight
- Cost of removal of debris
Exclusions under the Erection All Risk Insurance Policy
Although an Erection All Risk Insurance Policy can provide comprehensive coverage and even more benefits with add-on covers, it does not cater to certain eventualities. These include –
- Losses occurring due to faulty design
- Nuclear perils, radioactive contamination and war
- Manufacturing defects
- Inventory losses
- Gradual wear and tear
Sum Insured and Premium
The sum insured of an Erection All Risk Insurance Policy is determined after evaluating the completely erected value of plant and machinery, the cost of erection and additional costs of freight and customs.
The premium of an Erection All Risk Insurance Policy is determined on the basis of the sum insured, the type of activity to be undertaken, and the duration of the project.