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Erection All Risk vs. Traditional Insurance: Finding the Right Fit for Your Project

Posted on 23 Nov, 2023

When it comes to large-scale projects, whether erecting a Thermal Power Station, an Oil Refinery, or installing intricate equipment like computers and electrical machinery, choosing the right insurance is paramount. Two prominent options often considered are Erection All Risk Insurance (EAR) and Traditional Insurance. Let's explore the key distinctions between these two insurance types and help you determine which one best suits your project's needs.

Erection All Risk Insurance

Understanding Erection All Risk Insurance (EAR)

Erection All Risk Insurance, commonly referred to as EAR, is a specialized insurance policy designed to provide protection for Principals, Contractors, Manufacturers, and Suppliers involved in erecting machinery and plant equipment. EAR offers coverage against sudden and unforeseen physical loss or damage during various project phases, including storage, construction, erection, testing, and maintenance. It can cater to a wide range of individuals and organizations involved in large-scale projects, including Principals, Contractors, and joint ventures. Its flexibility makes it a compelling choice for projects of all sizes.

Comparing Erection All Risk and Traditional Insurance

Now, let's understand the key differences between Erection All Risk Insurance and Traditional Insurance to guide you in making an informed decision for your project.

1.Coverage Specificity: Traditional insurance policies often lack the specificity required to address the unique risks associated with large-scale projects. Erection All Risk Insurance offers a project-centric approach with tailored coverage.

2.Project Phases: Traditional insurance may cover certain aspects of a project but often falls short in protecting the erection, testing, and maintenance phases. Erection All Risk Insurance provides continuous coverage throughout the project's lifecycle.

3.Exclusions: Erection All Risk Insurance typically has fewer exclusions related to project-specific risks compared to traditional insurance policies, which may exclude coverage for certain project-related perils.

4.Third-Party Liability: Erection All Risk Insurance can include third-party liability coverage, offering an additional layer of protection, especially beneficial in cases of unforeseen accidents or damages involving third parties.

5.Suitability for Different Projects The choice between Erection All Risk Insurance and Traditional Insurance depends on the nature and scale of your project.

For large-scale endeavours such as Thermal Power Stations, Oil Refineries, Fertilizer Plants, and other substantial projects with diverse and complex risks, Erection All Risk Insurance often proves to be the more suitable choice for construction projects. The benefits of Erection All Risk Insurance lie in its tailored coverage and flexibility, making it an invaluable asset in mitigating potential financial losses and ensuring project success.

For smaller projects like computer installations or electrical equipment setups, where risks may be more straightforward, traditional insurance may suffice. However, consulting an insurance expert is advisable to determine the best fit for your specific project.

In the insurance landscape, precision and specificity are very crucial. Erection All Risk Insurance, with its project-centric approach, offers a robust shield against unforeseen challenges, ensuring your project remains on track. When considering your insurance options, remember that safeguarding your investment is not just about compliance; it's about securing the future of your project. In many cases, an Erection All Risk Insurance policy is the key to that security.

ICICI Lombard, excels in EAR Insurance. Our expertise in risk minimization and mitigation ensures your project is well-protected. ICICI Lombard offers dedicated services for risk advisory and safety installations, streamlining your project's execution. Moreover, their claims settlement process is known for its speed and efficiency, backed by the company's strong financial stability.

  • Engineering Insurance
  • Product Code: 2005
  • Product UIN: IRDAN115P0011V01200102

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This contains only an indication of the cover offered. For complete details on risk factors, terms, conditions, coverages and exclusions, please read the sales brochure carefully before concluding a sale.ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400025. . IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408). customersupport@iciclombard.com. www.icicilombard.com. (Engineering Insurance, 4010 , IRDAN115P0010V01200607)