Erection All Risks (EAR) policy

Erection All Risks (EAR) Insurance — written in connection with construction projects outside the United States, 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. Coverage for delay in start-up (DSU) costs is typically an optional coverage. Covered parties include the general contractor, subcontractors, and in some cases suppliers and manufacturers of equipment. Examples of the types of projects for which EAR coverage is typically purchased include power plants, manufacturing and fabrication facilities, water and wastewater treatment facilities, and telecommunications centers (particularly where the erection of signal towers is involved). Some insurers combine EAR and contractors all risks (CAR) coverages into one form. Although these terms are sometimes used interchangeably, there are some substantive differences.


  • Owners’ Surrounding Property
  • Removal of Debris
  • Additional Customs Duty
  • Air-Freight
  • Express freight, Overtime charges, Holiday wages etc.
  • Contractors’ Plant & Machinery (upto Rs.25 lacs)
  • Third Party Liability(with/without Cross liability)
  • Maintenance Visit or Extended Maintenance
  • Catalyst during Hot test (Petrochemical risks)
  • Holiday and Overtime rates and Wages.
  • Escalation.

It is possible to integrate transit insurance (inland/overseas) on project materials with EAR policy and opt for a combined Marine-cum-Erection policy.


  • Excess in respect of each claim as stipulated
  • Inventory Losses, Normal wear & tear and gradual deterioration due to atmospheric condition or otherwise, rust, scratching of painted or polished surface or breakage of glass.
  • Loss or damage due to faulty design, defective material or casting
  • War and warlike operation
  • Nuclear reaction, nuclear radiation or radioactive contamination.
  • Willful act or negligence of Insured.
  • Consequential Losses of any kind or description such as losses due to penalty, delay, lack of performance, loss of contract.


  • Leading private sector insurance company having wide network of offices across India
  • Experts in insurance offering risk advisory services including risk minimization & mitigating insured’s risk
  • Facultative arrangement with leading A rated re-insurers
  • Wide coverage through widely accepted policy wordings
  • Each & every risk is thoroughly assessed & right priced
  • High customer servicing standards
  • Claims management: simple procedures, speedy settlements
  • Financial strength & supreme claim paying capacity

Scope of cover

  • This policy covers risks associated with storage, assembly/erection and testing of Plant and Machinery. EAR insurance provides comprehensive cover.
  • All perils are covered unless specifically excluded.
  • Cover commences from the date of arrival of first consignment at site
  • Cover terminates on the date of expiry as per policy or on completion of Erection and Trial run whichever is earlier.
  • In the event of non-completion of the project within the period as per policy, cover may be extended for such further tim as may be required at additional premium

Critical factors of the Erection All Risk Insurance (EAR)

  • This policy offers comprehensive cover by covering risks which may arise during erection or testing period. It gives financial protection to the engineering contracts in the event of any accident.
  • The Erection All Risk policy is for erection and testing of Manufacturing units or individual machineries.
  • The policy also covers legal liability to third parties arising as a result of the project activity during the policy period
  • The EAR policy can be availed for the entire project period starting from arrival of material at site and till completion of testing and commissioning
  • Premium can be paid in instalments for projects of more than 12 months duration.

All Risks (with certain exceptions) involved during storage, assembly, erection/construction, testing against:-

  • Fire, lightning, explosion/implosion, aircraft damage,
  • Flood, storm, landslide,
  • Theft, burglary, Riots Strikes and Malicious Damage,
  • Negligence, lack of skill, collision, impact, dropping,etc.
  • Electrical/Mechanical breakdown during installation or testing

By paying additional premium policy can be extended to cover additional perils/expenses which are mentioned below:

  • Earthquake
  • Terrorism
  • Clearance and removal of debris
  • Third party liability cover
  • Surrounding property of the insured
  • Escalation provision
  • Express freight, holiday and overtime rates of the wages –
  • Air freight
  • Additional custom duty
  • Construction machinery plants and equipment
  • Maintenance visits cover and extended maintenance cover
  • War and nuclear perils
  • Normal wear and tear, gradual deterioration etc.
  • Damage due to faulty design, defective materials, bad workmanship, etc.
  • Consequential loss like loss of revenue, penalty for delay etc.
  • Inventory losses
  • Wilful negligence,
  • loss of or damage to files, drawings, accounts, bills, currency, stamps, deeds, evidence of debt, notes, securities cheques, packing materials such as cases, boxes, crates

In the event of any occurrence which might give rise to a claim under this Policy, the Insured shall-

  • immediately notify the Company in writing giving an indication as to the nature and extent of loss or damage;
  • take all steps to minimize the extent of the loss or damage;
  • preserve the parts affected and make them available for inspection by a representative or Surveyor of the Company;
  • furnish all such information and documentary evidence as the Company may require;
  • inform the police authorities in case of loss or damage due to theft or burglary