An Erection All Risk policy protects businesses during the construction of a new building. The policy covers any risks associated with the erection process, including accidents and damage to property. However, the insurers do keep some exclusions to maintain the standard of the policy.
Let’s look at the inclusions and exclusions in the Erection All Risk Policy.
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Risks at the location of the construction like theft, burglary, lightning, and fire
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Risks during testing such as safety devices failing, electricity leakage, short-circuiting, and explosion
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Acts of God, including storms, hurricanes, flooding, subsidence, rockslide, landslide, earthquake
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Collision, the impact caused by falling objects, cranes malfunctioning, etc.
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Negligence, Erection flaws, strike & riot, terrorism, etc.
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Damage to the insured property during erection
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Professional expenses incurred during the rectification of any faults in the Insured Property
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Loss or damage to scaffolding, formwork and falsework
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Risks in temporary works
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Risks around lifting operations
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Load testing risks
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Risks in the construction of foundations
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Loss of or damage during the erection of plant and machinery
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Loss of or damage to materials, parts and equipment in transit to or storage in the insured property
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Loss of or damage to materials, parts and equipment during installation
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Loss of rental income arising from delay in the completing the Insured Property caused by an insured event
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Damage to temporary buildings erected at the site of the Insured Property
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Professional fees and expenses incurred for the redesigning of the Insured Property as a result of any loss or damage covered by the policy
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Normal wear and tear, deterioration, obsolescence, lack of use, rust, etc.
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Any penalties for not delivering the construction work within the predetermined time
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War and other perils caused due to war
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Nuclear and associated perils
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Stopping of work
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Intentional negligence
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Damages that existed before the erection
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Losses that did not financially affect the project
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Financial loss arising from faulty design and defective material
Erection All Risk Insurance includes materials, labour, and other expenses incurred during the erection process. The policy may also cover damages caused to the building or property nearby during the erection process.
Erection All Risk insurance is typically purchased by the property owner on which the structure will be erected. The insurance company then becomes the party responsible for any damages that occur during erection, up to the policy’s limit. It can give the owners peace of mind while protecting them financially in case of an accident.
An Erection All Risk policy can help small business owners, property owners or renters, Large Business owners, and Medium Business owners.
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Manufacturing
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Power Plants
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Water
Case Study : An Example of Erection All Risk Insurance at Work
budding fabricator, Abhinav Chandekar, hired a team of engineers to develop a new fabrication unit in Pune. Abhinav purchased an Erection All Risk Insurance policy to act as a safety net should something go wrong during the construction of the new unit.
The work began as expected. However, after some days, heavy rainfall destroyed the foundation of the building. There was no option but to restart the job. So, Abhinav informed the insurer about the event immediately.
The insurer investigators discovered no willful negligence and that the engineers had taken every precaution to avoid any disaster. However, the rain was unexpectedly heavy and caused substantial financial damage to the project.
The insurance company ultimately paid Abhinav for the damages. If he had not opted for an Erection All Risk Policy at the right time, Abhinav would not have been able to continue his business.
As Erection All Risk Insurance is a relatively new type of policy, some confusion still exists surrounding what is included and excluded under the coverage. However, as more and more insurers offer this type of policy, the terms and conditions are becoming more standardised.
Please carefully review the terms and conditions of any Erection All Risk policy before buying it to ensure that it meets your specific needs. For a comprehensive cover, outstanding customer service, and fast claim processing, check out ICICI Lombard Erection All Risk Insurance Policy. ICICI Lombard is one of the leading Insurance Companies in India.
- Erection All Risk Insurance
- Product Code: 5006
- Product UIN: IRDAN115RP0023V01200708