Erection All Risks Insurance

During the erection and installation of machineries, the risks involved are very high which can result into heavy damage to property and contribute to huge financial losses to principal/contractor. The Erection All Risk Insurance is a comprehensive insurance which provides complete protection against all types of risks involved in the installation of machinery, plant and steel structures of any kind.

What are the key benefits of Erection All Risks Insurance

The Erection All Risks insurance provides a comprehensive insurance solution covering wide range of risks to which a project work is exposed to, starting right from arrival of material at site till successful testing and commissioning of the project. This policy is extremely useful for Principal owners, contractors, consulting engineers, architects and financiers because it contributes to reducing the overall construction and erection expenses and offers them protection against unforeseen accidents leading to financial losses under a single policy.

Who can take the Insurance?

All parties involved in any way in the construction may be insured:

  • Contractors
  • Firms commissioned to carry out the work, including subcontractors
  • The purchaser or owner
  • Parties financing the project

What does Erection All Risks Insurance cover?

This is an ‘All Risk’ policy covering sudden and unforeseen physical damage to projects under erection insured by any cause or peril not specifically excluded under the policy and resulting during the course of:

  • Erection
  • Storage
  • Testing
  • Commissioning

On a broad scale this policy covers following risks-

  • 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
  • Short circuiting, arcing, excess voltage
  • Electrical and mechanical breakdown
  • Collapse, damage due to foreign object, impact damage

What does Erection All Risks Insurance not cover?

The general exclusions are given below:

  • Loss or damage due to faulty design, defective material of casting and/or bad workmanship
  • Manufacturing defects
  • Loss or damage due to willful act or willful negligence
  • Consequential losses, contractual liabilities
  • Loss or damage due to war or warlike operations
  • Loss or damage due to nuclear reaction, nuclear radiation or radioactive contamination
  • Losses due to normal wear and tear, gradual deterioration
  • Cessation of work
  • Inventory losses

This is not an exhaustive list. For a detailed list of exclusions, please read our policy terms and

What are the extensions available?

Cover can be extended up to a limit chosen by the insured on the following, on payment of additional premium:

  • Third-party liability
  • Cross liability
  • Cost of removal of debris
  • Express freight, overtime charges
  • Air freight
  • Additional customs duty
  • Escalation
  • Owner’s surrounding property
  • Storage risk at fabricator’s premises
  • Maintenance cover
  • Earthquake
  • Terrorism

What is the sum insured?

The sum insured for the insurance should represent the completely erected value of the property, inclusive of freight, customs duty and erection cost.
Note:- These are indicative details of the Policy. Exact terms, conditions, coverages and exclusions are as per the wordings of Erection All Risks Insurance.