Erection All Risk Insurance

  •  About Policy 
  •  Eligibility 
  •    Scope Of Cover 
  •    Extensions 
  •    Exclusions 
  •    Rating 

About Policy

Wherever there is the erection or installation of machinery or equipment, there is a risk of loss or damage. EAR policies are designed to cover the risk of loss arising out of the erection and installation of machinery, plant and steel structures, including physical damage to the contract works, equipment and machinery, and liability for third-party bodily injury (BI) or property damage (PD) arising out of these operations.

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EAR policy can be taken by Principal, contractor or sub-contractor, either individually or jointly.


Scope Of Cover

Erection All Risks (EAR) Policy covers all risks with respect to projects of erection, testing and commissioning subject to exclusions and term and conditions.

This policy covers risks associated with storage, assembly/ erection and testing of plant and machinery. EAR insurance provides comprehensive cover which includes all perils unless some are specifically excluded. The cover comes into effect 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.



  • Air freight
  • Express freight, holiday and overtime rates of wages.
  • Additional customs duty.
  • Contractor's plant and machinery up to specified limits.
  • Storage risk at fabricator's premises.
  • Clearance and removal of debris.
  • Third party liability.
  • Cross liability.
  • Surrounding property.
  • Escalation.

There is also a provision for extending the policy period and testing period during the currency of the policy



  • War and nuclear group of perils.
  • Willful act / negligence.
  • Loss discovered at time of taking inventory.
  • Normal wear and tear; gradual deterioration due to atmospheric conditions or otherwise, rust.
  • Scratching of painted or polished surface, breakage of glass.
  • Loss or damage due to faulty design, defective material or casting and bad workmanship (limited to items immediately affected).
  • Cost of rectification or correction of any error during erection not resulting in physical loss or damage.
  • Damage to files, drawings, accounts and bills etc.
  • Penalties for non-fullfilment of contractual obligations.
  • Consequential losses.
  • Costs of any alterations, additions and/or improvements after a claim.
  • loss or damage directly caused by mechanical breakdown or derangement.
  • Cessation of work whether total or partial.

Basis of sum insured: Completely erected value of the property inclusive of freight, custom duty and erection costs.



The rating depends on:

  • Type of projects.
  • Period of projects.
  • Testing period.
  • Sum insured of project.
  • Location of project.
  • Extensions opted.

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