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> Quick Guide to Engineering All Risk Insurance
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The Benefits of Engineering All Risk Insurance

Wider Coverage

Erection all risk plan offers material damage and third party liability cover. Custom duty, Invoice value, Freight and other temporary/permanent costs are covered as a part of the insurance to offer a wider coverage.

Customized Cover

Policy can be designed to suit specifics of an engineering project. In addition to key coverages like material damage and third party liability, add-ons like design deffect and removal of debris can also be included.

Competitive Premium

We offer pre-negotiated premiums with leading private and public sector insurers to offer discounted rates. Option to pay premiums in installments is offered depending upon the size and tenure of the project.

Complete Coverage

EAR policy provide cover for all the stages of an under erection project that involves storage, testing, maintenance or commissioning. Extended maintenance period could also be offered for 12 to 24 months period

Quick Guide to Engineering All Risk Insurance

What Is Engineering All Risk Insurance?

Engineering All Risk Insurance policies in India are designed to cover for risks that can arise due to installation and erection of steel structures and plant, machinery and equipment.

Such an insurance policy also covers for damage to property and liability of bodily injury to any third-party caused due to operation of your business. A rightly chosen coverage will protect you against a lot of unforeseen situations arising by virtue of the nature of your business. One should be wary of the nature of their business and the coverage available to be able to choose the right insurance policy and protect their business.

Benefits of Engineering All Risk Insurance Policy

Below are the benefits of engineering all risk insurance policies.

Material Damage Cover

Engineering all risk insurance policy provides protection for machinery, equipment, civil work and other material present at the project site. Covers loss due to principal’s surrounding property.
Policy covers perils such as fire, lightning, burglary, explosions, and natural disasters such earthquake and floods.
Adding to the material damage cost EAR policy also covers custom duty, freight, wages and other related expenses.

Covers Third Party Liability

Project insurance covers legal liability due to damage caused to surrounding property or property held in trust or under custody of the insured. Liability arising due to fatal or non-fatal bodily injury to any third person is also covered.
Extensions are available to include cross-liability wherein a claim by a co-insured could also be defended.
Legal costs such as lawyer’s fee, court compensation, settlement cost and other case related expenses are covered in the policy

Wider Extension Coverage

Engineering insurance provides a wider range of add-on coverage to offer a comprehensive cover for the under erection project. Covers testing period and extended maintenance period as key add-ons.
Other key extensions offered are Design Defect, Escalation Cost, Removal of Debris, and Expediting Expenses.
Clauses such as 72 hours, Co-Insurance, Waiver of Subrogation, 50:50 and Public Authority clauses are covered to provide a complete coverage.

Coverage of Engineering All Risk Insurance Policy in India

Engineering all risk policy in India covers for most of the perils associated with erection and installation of machineries for business. It is designed to cover for:

Erection or installation of machinery, plant and equipment ranging from erection of a single machine to a large manufacturing unit
Businesses from the physical loss or damage of contract work from perils such as fire, lightning and natural catastrophe
Legal liability claims arising due to third party bodily injury and property damage

Who can take Engineering All Risk Insurance Policy in India?

A rightly chosen engineering insurance can provide cover for a number of risks related to engineering and equipment. The parties that can be covered under engineering all risk insurance policies are the following:

Subcontractors
General contractor
Suppliers and manufacturer of equipment involved in the operations (applicable for some cases only)

Claim Process of Engineering All Risk Insurance Policy in India

An engineering all risk policy claim process is simple with SecureNow. In case of any damage to the project, you should immediately intimate the same to us by writing to us at support@securenow.inand we’ll inform the insurance provider. We’ll need the nature and extent of the loss or damage to the project. Meanwhile, you should also take all the possible measures to minimize further loss. Insurer will appoint a surveyor for the inspection of the site. The SecureNow team will work with you to submit all necessary documents required by the insurance company during the claim process. We’ll assist you starting from claim intimation till the claim settlement and we will make sure you face minimal issues with the claim processing.

Top Online Engineering Insurance Brokers in India

Not many insurers deal with such a personalized insurance policy as the engineering all risk insurance policy. SecureNow has been leading as a top engineering insurance broker in India for the past years and we can serve as your advisor to help you with the best engineering insurance based on your requirement. You just have to provide us with your basic details like name and contact details and an insurance expert will get in touch with you soon. Our insurance experts are trained to understand their requirements and provide the best quotes available to our clients. We work with all the insurers dealing with engineering insurance to be able to provide you with competitive quotes. Some of the insurers are: IFFCO Tokio, HDFC Ergo, ICICI Lombard, TATA AIG.

Documents Required for Engineering All Risk Insurance Policy

The common documents required engineering all risk insurance claim process are as below:

Duly signed claim form
Letter of award and bill of quantity
Purchase or delivery order details
Damage report on extent of damage
Estimated cost of repair or lost product

Additional documents may be required by the insurance company to process the claim. The SecureNow team will get in touch with you and guide you for every step of the claim process.

Frequently Asked Questions

EAR in insurance means Engineering All Risk insurance policy that is designed to cover for the plant, machinery and equipment in the erection site.

An engineering all risks insurance not only will cover for your equipment and machineries in the erection site but also designed to cover for the third-party liabilities that may arise by virtue of operations of your business.

Construction all risk insurance’s primary objective is to cover for the construction site and material purchased for the project while engineering all risk insurance will cover for the machineries, equipment and steel structure that are present at the erection site. Both policies can be interchangeably bought depending on which project has higher value associated with it. For example, if there is a cement manufacturing plant established whose building structure is INR 3 Cr and the machineries cost around INR 6 Cr. Since the value of the machinery is more engineering all risk insurance will be applicable here that will cover for all the structures - the equipment as well as the building.

The policy is particularly relevant for industrial plants and machinery construction, windmill farms, solar energy farms, etc where setting up a new apparatus entails certain risks that may have overwhelming financial consequences. Generally this policy is taken by contractors, sub-contractors, and principals of the project to cover the entire erection process at a site for a given period of time.

The key elements included under “all risks” of this policy are-

Riot, strike or any form of malicious act

Burglary & theft

All kinds of natural calamities-storm, cyclone, floods, inundation

Loss due to error and negligence

Collapse or damage caused from foreign objects

Damages due to fire, explosion and other such perils

Electrical or mechanical faults

Engineering all risk insurance policy generally excludes willful negligence, total or partial cessation of work, faulty design and consequential losses. Damage to the erection work due to war, radiation contamination and act of terrorism are also commonly excluded under the policy. Legal liability for the injury to own workmen is also excluded

Yes, testing period of the project after the completion, is covered under erection all risk insurance. Typically testing period for most of the project is between 30 to 60 days before it is handed over for commissioning. Although, you can cover testing period upto 12 months as well with premium charged as per the total tenure you choose for.

Insurance companies have laid down the premium rates for various types of erection projects. For instance, the premium rates vary between 0.2%-0.5% of sum insured for the first month. Then there is an additional rate of 0.002%-0.005% of sum insured per month beyond one month. Premium for add-on coverage will be additionally charged depending upon coverages opted in the policy. Policy premiums also get affected as per project's earthquake zone.

Yes, you can cover the machinery and equipment purchased even after the commencement of the erection of the project. In such cases, the process of endorsement comes into picture where by paying an extra premium additional assets can be covered. It is advisable to maintain a cash deposit with the insurer in case you are expecting the value of the project to change in the middle of the policy so that the policy can cover the additional equipment from the date of arrival of items on site.

Yes, you can cover the damages to your project arising due to design defects. In a standard policy, damage due to design is an exclusion but by paying additional premium you can cover the design defect in the policy. There are various types of design defect cover like design defect-3, design defect-4 which can be covered in the policy as an add-on at an extra premium. We recommend all our clients to cover this cover in their erection all risk insurance.

SecureNow deals with all the insurers who provide engineering insurance in India. Since this is a very personalized policy, not many insurers can work on creating a comprehensive policy for the clients. Some insurers who can provide you engineering all risks insurance are: IFFCO Tokio, ICICI Lombard, HDFC Ergo, TATA AIG and New India Assurance. You can reach out to us by providing your basic information in the form above and we’ll get in touch with you to provide you with competitive quotes from the insurers.

There are three types of erection all risk policy-

Standard Policy- This policy covers material damage from fire and natural perils and third party liability.
Policy with limited add-on- Additionally to the standard policy, it offers few key add-ons such as damage to owners surrounding property and third party liability with cross liability.
Comprehensive Policy- The policy provides holistic cover by covering exclusions aswell such design defect and other important clauses such as waiver subrogation and contribution.

Mainly the excess amount gets deducted from the claim amount during the final settlement. This excess is standard across all the EAR policies of various insurers as prescribed under the tariff by IRDA. Generally, for normal claims excess is 5% of the claim amount subject to minimum of Rs 50,000 (this may defer as per different coverage and insurer). The excess may defer for claims under design defect and theft & burglary cover.

For engineering all risk insurance, it is advised to take help of insurance advisors such as SecureNow. To start with we will help you design the coverage as per your requirements, we will then provide negotiated quotes from various insurers. Once the final insurer is selected then we help you with documentation and payment process. After completion of the payment and documentation process, your erection all risk insurance coverage will start.

Yes, a wide range of add-ons are available under engineering all risk policy. Some of the key extensions included are cross liability, express freight, air freight and maintenance cover. Policy also pays additionally for cost of removal of debris and professional fees. Testing period, design defect and Expediting expenses are also offered under the policy.

Such an insurance policy is highly personalized and demands a requirement analysis before being able to suggest any specific coverage for the product. So, insurers may not be able to provide a quote or fulfill the product online. Hence, we would request you to post your interest in the product by submitting your basic details on the form provided above. An engineering insurance expert from the SecureNow team will get in touch with you as soon as possible, to gather your requirements, understand your necessities and be able to provide appropriate competitive quotes to you. Additionally, you can also write to us at support@securenow.in and an insurance expert will get in touch with you.

In case of any damage to the project, you should immediately intimate your insurance provider and share the nature and extent of the loss or damage to the project. Meanwhile, you should also take all the possible measures to minimize further loss. Insurer will then appoint a surveyor for the inspection of the site. Assuming you have taken insurance from us, our team will work with you to submit all necessary documents required by the insurance company during the claim process. You’ll receive end-to-end assistance starting from claim intimation to claim settlement from the SecureNow team.

In order to ensure claim settlement, you should make sure that you provide correct information in the claim form because the major reason for claim denial is inaccurate information provided during the claim. It is also very important to intimate the insurance company as soon as the claim occurs so that the surveyor can be appointed timely. Further, you have to make sure all the claim documents required by the insurance company are timely submitted.

In case of loss or damage to the machinery there are two ways in which the claim can be settled under erection of all risk cover. In case of damage which can be repaired, the cost of repairs to restore the item to its original condition is paid. In case of total damage or loss, the total value of the item will be paid by the insurance company after deducting excess and other mentioned amounts in the policy.

Insuropedia

What is the basis of indemnity in Engineering all risk insurance?

An engineering all risk insurance policy covers the loss arising out of the erection and installation of machinery, plant and steel structures. It protects coverage against physical damage to the contract works, equipment, and machinery. This policy also covers the liability for third-party bodily injury or property damage...

How can you minimize the premium for Engineering All Risk Insurance?

During the erection and installation of machinery, the dangers involved are high that can result in huge losses and damage to property. The risks can cause huge financial losses to the contractor. The policy offers cover at several stages of an engineering project, like Storage, Testing, Handling, and Commissioning at a plant or engineering site. So, How can you minimize the premium for Engineering All Risk Insurance?

What is Excess in Engineering All Risk Insurance and How does it affect the premium of Policy?

The engineering all risk insurance policy covers the insured against any unforeseen and physical loss of or damage to the insured items. Such damage to plant or machinery may necessitate its repair or replacement. In engineering all risk insurance policy, an excess clause is included. The excess clause states that the asset...

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Engineering All Risk Insurance

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