EAR Insurance Presentation

7/24/2019 EAR Insurance Presentation

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Erection All Risk Insurance


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Project Insurance

Insured Parties

Principal Employer

Manufacturer

Contractor Sub-contractor& Insurer

Any one or more of the following


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Erection All Risk

Basic concept

Comprehensive cover against all the risk

involved in the

Storage

Erection

Testing and

Commissioning

of machinery & plant pertaining to various

Industries


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Erection All Risk

CoverSudden and unforeseen loss or damage due to

Fire, lightning, explosion, aircraft damage Riot, strike, malicious act Flood, inundation, storm, cyclone and allied perils Landslide, subsidence and rockslide Burglary and theft Faults in erection Human errors, negligence, lack of skill Short circuiting, arcing, excess voltage Collapse, damage due to foreign objects, impact damages Earthquake (optional)Terrorism (optional)Any other sudden, unforeseen damages not explicitlyexcluded


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Erection All Risk

Interest

Joint interest:

The policy can be taken jointly bythe owner / principal covering the

interests of all other parties

Interest of Financial institution:

Insured must specify clearly ifinterest of Financial Institution orBank is required to be covered


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Erection All Risk

Period of cover

Erection period according to the contract requirement

Testing period - Normally 1 month but may be more than a month

depending on actualrequirement

Maintenance period begins from the day testing of the plant is declared

completed upto the periodbased on requirement


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Erection All Risk

Insured Period

Taken into use

Works Testing Maintenance

EAR Operational

Commencementof Works

Provisional AcceptanceCertificate

Final Acceptance


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Erection All Risk

Sum insured

Completely erected value of the propertyinclusive of

Freights

Customs duty

Erection cost


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Erection All Risk

Exclusion

Types:

General Market Exclusions

Trade Risks

Risks more exactly the Subject matter

of Other Insurance


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Erection All Risk

General Market Exclusions

War Invasion Riot Strike Civil

Commotion etc

Nuclear Reaction Nuclear Radiation

or Radioactive Contamination

Insureds Contribution Deductible

Wilful Act or Wilful Negligence of

the Insured

Cessation of Work


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Erection All Risk

Trade risk

Defective Material or Bad workmanship

Wear Tear Corrosion Oxidation Deterioration

Normal Maintenance or Making Good

Disappearance or Shortage (Inventory Losses)

Risks more exactly the Subject matter of Other Insurance

Design Defects

Loss of files, drawings, cash, cheques etc,.

Consequential Loss


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Erection All Risk

Add-on covers

Third party liability

Cross liability

Cost of removal of debris,

Express freight,overtime charges,

Air freight,

Custom duty

Escalation

Owners surrounding property

Storage risk at Fabricators Premises


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Project Insurance

IMPORTANT ADD-ONS:

Third-party exposure to nearby structures by excavationand foundation work and to traffic

Third Party Liability


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Project Insurance

Add-on covers

The cost of debris removalfollowing an accident to the

Extent that it is necessary

Before repairs may be put

In hand

Removal of Debris


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Project Insurance

Add-on covers

The integration of an oldhotel into the new projectrepresented a high exposureof the Principals existing property

Surrounding Property


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Erection All Risk

Physical Hazards

Pre-erection and storage:

Fire

Theft

Water Damage

AOG Perils

Material Handling Equipments

Improper StorageActs of god


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Erection All Risk

Physical Hazards

Construction & erection:

Working at Heights

Heavy Lifts

Handling of Over Dimensioned Items & Electrical Equipments

Civil Construction Requirements

Fire & AOG Perils

Theft


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Erection All Risk

Physical Hazards

Testing & commissioning:

Failure of Controls & Safety Device

Chemical Leakages

Controls & Instrument Failure

Failure of Material under Pressure

Human Error & Negligence

Explosion.

ErectionErrors


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Erection All Risk

Basis of settlement

Partial loss:

The cost of repairs necessary to restore the items to theircondition immediately before the occurrence of the damage

less salvage, OR

Total loss:

The actual value of the items immediately before theoccurrence of the loss less salvage;

However, only to the extent the costs claimed has to be borne

by the Insured and to the extent they are included in the

Sum Insured

Documents

EAR Insurance Presentation