Erection All Risk Insurance

Comprehensive protection for installation, erection, testing, and commissioning risks across industrial and infrastructure projects.

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Secure Your Installation & Erection Projects Against Unexpected Financial Losses

PRODUCT OVERVIEW

What is Erection All Risk Insurance?

Erection All Risk (EAR) Insurance is a specialised engineering insurance policy that provides financial protection against accidental physical loss or damage occurring during the erection, installation, testing, and commissioning of machinery, plant, and industrial equipment. It is commonly used for industrial, infrastructure, manufacturing, and power projects involving high-value mechanical and electrical systems.

EAR Insurance helps businesses manage risks associated with handling, assembly, positioning, testing, and commissioning activities at project sites. Coverage generally starts from the unloading of materials at the site and continues until project completion or handover, as specified in the policy terms. In India, EAR Insurance is issued under engineering insurance guidelines approved by the Insurance Regulatory and Development Authority of India (IRDAI).

Protect High-Value Equipment

Safeguards costly machinery, turbines, generators, electrical systems, and industrial installations against accidental damage.

Reduce Financial Exposure

Minimises the financial burden arising from repair, replacement, or reinstatement costs during project execution.

Meet Contractual Requirements

Many project owners, EPC contracts, lenders, and government tenders mandate EAR Insurance before project commencement.

Cover Testing & Commissioning Risks

Protects during testing phases where the probability of mechanical or electrical failure is significantly higher.

Ensure Business Continuity

Helps projects continue with reduced disruption after unforeseen incidents.

Protect Against Third-Party Liabilities

Covers legal liabilities arising from accidental injury or property damage caused to third parties at the project site.

Strengthen Risk Management

Demonstrates operational preparedness and professional project risk governance.

Manufacturing Plants

Power Generation Projects

Renewable Energy Installations

Steel and Cement Plants

Industrial Machinery Setup

HVAC and Automation Systems

Transmission and Distribution Projects

Factory Expansion Projects

Mechanical and Electrical Installations

Infrastructure and Engineering Projects

WHO SHOULD BUY

Who Should Buy Erection All Risk Insurance?

EPC Contractors and Engineering Firms

Project Owners and Industrial Manufacturers

Mechanical and Electrical Contractors

Machinery Suppliers and Installers

Infrastructure and Renewable Energy Companies

What is Covered Under EAR Insurance

Fire & Allied Perils

Coverage against fire, explosion, lightning, impact damage, and related accidental losses.

Natural Catastrophes

Protection against flood, storm, cyclone, landslide, inundation, and other natural events.

Accidental Damage During Erection

Covers damage from minor installation errors, voltage fluctuations, insulation failures, foreign particle ingress, vibration imbalance, or human handling mistakes, which can lead to substantial physical damage and costly project delays.

Mechanical & Electrical Failures

Coverage for sudden and accidental electrical or mechanical breakdown during testing and commissioning.

Theft & Burglary

Protection against theft of insured property at the project site, subject to policy conditions.

Human Error & Negligence

Coverage for accidental losses arising from operational mistakes, handling errors, or negligence during erection activities.

Testing & Commissioning Risks

Covers sudden and accidental damage arising during cold testing, hot testing, calibration, synchronisation, or trial operations of turbines, transformers, generators, boilers, and industrial systems.

Third-Party Liability

Coverage against legal liability arising from bodily injury or property damage caused to third parties.

Debris Removal Costs

Expenses incurred for clearing damaged materials after an insured event.

What is Not Covered Under EAR Insurance

Wilful Negligence or Intentional Damage

Losses caused deliberately or due to intentional non-compliance.

Faulty Design or Defective Material

Damage arising solely from design defects, poor workmanship, or defective materials.

Normal Wear & Tear

Gradual deterioration, corrosion, erosion, rusting, or ageing-related damage.

Consequential Losses

Loss of profit, delay penalties, business interruption, or indirect financial losses unless specifically covered.

War & Nuclear Risks

Losses arising from war, invasion, terrorism (unless added), nuclear radiation, or radioactive contamination.

Cessation of Work

Losses resulting from abandonment or prolonged stoppage of work.

Inventory or Accounting Losses

Shortage discovered only during stock verification or audit.

Pre-Existing Damage

Damage existing before policy inception.

Contractual Penalties

Liquidated damages, performance penalties, or contractual fines.

Note: Coverage, inclusions, exclusions, and add-on availability may vary between insurers and policy wordings. Please refer to the policy schedule and wording for detailed terms and conditions.

Third-Party Liability Extension

Enhances liability protection for bodily injury and property damage claims.

Maintenance Cover

Extends coverage during the maintenance period after project completion.

Debris Removal Extension

Covers higher debris clearance and disposal expenses.

Escalation Clause

Provides increased protection against project cost escalation during the policy period.

Express Freight Charges

Covers urgent transportation costs for replacement equipment or parts.

Additional Customs Duty

Coverage for additional customs duty payable on imported replacement machinery.

Surrounding Property Damage

Protects existing nearby property belonging to the insured.

Cross Liability Cover

Provides separate liability protection among insured parties under the same policy.

Overtime & Holiday Charges

Covers additional labour expenses incurred for urgent repair work.

Tailored Risk Solutions

Customised insurance solutions designed for engineering, infrastructure, manufacturing, and industrial projects.

Access to Multiple Insurers

Compare quotations, coverage options, extensions, and premiums from IRDAI-approved insurers in one place.

Expert Risk Advisory

Dedicated support from experienced business insurance specialists for project-specific risk assessment.

End-to-End Assistance

Support across policy issuance, documentation, endorsements, renewals, and claims coordination.

Dedicated Claims Support

Professional assistance throughout claim intimation, survey coordination, and settlement follow-ups.

Scalable Coverage

Coverage solutions suitable for both single-machine installations and large industrial projects.

CLAIMS

Claim Process for Erection All Risk Insurance

Follow these steps to raise an Erection All Risk Insurance claim with assistance from Coverfox.

Immediate Claim Intimation

Inform us at help@coverfox.com immediately after the incident relating to EAR occurs.

Prevent Further Damage

Take necessary steps to minimise additional loss or damage at the project site.

Survey & Inspection

The insurer appoints a surveyor to inspect the loss and assess the extent of damage.

Claim Assessment

The insurer reviews the submitted documents, policy coverage, and surveyor findings.

Claim Settlement

Approved claims are settled as per policy terms and admissible loss assessment.

What is the policy period under Erection All Risk Insurance?

The policy period generally covers the entire erection, installation, testing, and commissioning duration of the project.

Is testing and commissioning covered under EAR Insurance?

Yes. EAR Insurance typically includes coverage during testing and commissioning phases, subject to specified duration and terms.

Can EAR Insurance cover third-party liabilities?

Yes. Third-party bodily injury and property damage liability can be covered under the policy.

Is EAR Insurance mandatory?

While not legally mandatory in all cases, many contracts, lenders, and project owners require EAR Insurance before project execution.

What factors affect EAR Insurance premiums?

Premium depends on project value, type of machinery, project duration, location, testing exposure, nature of installation, and selected add-ons.

Can multiple parties be insured under one policy?

Yes. Contractors, subcontractors, project owners, and suppliers may be jointly insured under the same policy.

Does EAR Insurance cover imported machinery?

Yes. Imported machinery and equipment can be covered, subject to declared values and policy terms.

What is the difference between CAR and EAR Insurance?

Construction All Risk (CAR) Insurance primarily covers civil construction activities, while EAR Insurance focuses on the erection, installation, testing, and commissioning of machinery and equipment.

Is terrorism covered under EAR Insurance?

Terrorism coverage may be available as an optional extension, depending on the insurer.

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Disclaimer

Erection All Risk Insurance coverage, inclusions, exclusions, terms, conditions, and add-on availability may vary between insurers and policy wordings. Claim settlement is subject to policy terms, project declarations, underwriting acceptance, and insurer assessment. Businesses should carefully review the policy schedule, coverage scope, exclusions, deductibles, and warranties before purchase.