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.
ADD ON COVERS
- Owners’ Surrounding Property
- Removal of Debris
- Additional Customs Duty
- 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.
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)
The policy offers :
- Offers Cashless Coverage across Network Hospitals in India – Direct settlement of hospital bills between Insurer/TPA and Hospital
- Most Group Health Policies cover Pre Existing Medical conditions (unlike Individual Health policies which carry a waiting period) from the inception of the policy.
- Maternity Benefits (for both normal and caesarean deliveries) are covered.
- Infants born under the policy are covered from Day 1 (unlike Individual policies, which cover new born babies from Day 91)
- Most policies cover in hospital medical treatment where insured has been hospitalised for a minimum of 24 hours.
- Day care procedures like Cataract surgery, Nasal Sinus Aspiration, Stapedectomy of the Ear , Chemotherapy / Radiation etc are covered under most policies – these procedures do not require 24 hour hospitalisation
- Domiciliary Expenses are covered in most policies.
- Pre and Post Hospitalisation is covered by some insurers may extend the duration of these coverages
- Some policies may cover boarding expenses apart from surgeon, anesthetist and consultant fees; charges for anesthesia, oxygen and diagnostic materials in addition to X-rays and dialysis costs among others.
- Most policies have an Annual Health Check up available for each member under the policy.
Some of the Advantages include:
- Most organisations use this as an Employee Benefit (EB) policy to retain and reward employees. This is a standard policy available with most companies to protect their employee workforce., which becomes more efficient and productive if they have a protection against any financial outgo in the case of a health/accidental emergency.
- It also provides a supplemental health cover for employees (and families) who already have an family / individual health insurance policy on their own
- A Group health insurance plan is cheaper (usually 25-30%) than individual health plans because the pricing is done for a larger group and hence group discount is offered.
- Many Benefits like, pre-existing medical conditions coverage, day care treatment, baby day one cover etc are offered under Group Health plans. Even benefits like Maternity come with an enhanced coverage apart from a wider range of disease covers.
- In most cases, employees are not denied health coverage based on their age or past medical history because they are part of a large risk/group.
- Some companies allow employees to not only cover their dependant family, but also their parents and parents in law – this allows relatively older persons to enjoy a comprehensive cover at a competitive premium.
Some of the limitations are:
- The employee will remain covered under the Group Health policy only as long as they are employed by the organisation. This could mean that they have no coverage when in between jobs and the coverages can be different between both organisations.
- Most group health insurance policies may offer limited coverage owing to sub-limits. An employee, therefore, may not have a full coverage as enjoyed in an Individual policy, which rarely has sub limits.
- Employees may not always enjoy the standard coverage every year. Companies may reduce/modify the health insurance cover at their discretion depending on the loss ratios of the policy. Alternately the employer could ask the employee to bear a part of the premium to retain the original coverage – this is a financial commitment for the employee.
- The Group policy may become null and void if the employer does not pay the required premium to the insurance company or if an insurer backs out of the contract with the company citing adverse loss ratios.
- Since it is a Group policy, while there is a benefit of a reduced premium, there could be a premium/coverage impact for an employee who has never claimed under the policy as well, because of claims made by other members in the group – this will not be the case in an Individual policy.
The standard coverages under a Group Health policy are below:
- In-patient treatment (Cashless) including room rent, ICU, nursing, medicines drugs & consumables covered without as per the policy terms and conditions upto the Sum insured mentioned on the policy. Covered expenses include:
- Room, Boarding expenses
- Nursing expenses
- Fees of surgeon, anesthetist, physician, consultants, specialists
- Anesthesia, blood, oxygen, operation theatre charges, surgical appliances, medicines, drugs, diagnostic materials, X-ray, Dialysis, chemotherapy, Radio therapy, cost of pace maker, Artificial limbs, cost or organs and similar expenses.
- Pre and Post Hospitalization medical expenses: Medical expenses incurred normally upto 30 days immediately before hospitalization and normally upto 60 days immediately post hospitalization remain covered. The coverage period can be extended by submitting relevant documents to the insurer at least 5 days before the Hospitalisation.
- Maternity + Baby Day 1 cover : coverage for birth of an infant both under Normal or Caesarean deliveries. Infant is a member from Day 1 unlike Retail policies where infants are covered only from Day 91.
- Day Care Procedures: Most policies covers medical expenses for 120-150 different day care treatments which do not require 24 hours hospitalization
- Domiciliary Treatment: The policy also covers for the medical expenses incurred for availing medical treatment at home on the advice of the attending Medical Practitioner which would otherwise have required Hospitalisation.
- Organ Donor: The policy covers Medical Expenses on harvesting the organ from the donor for organ transplantation.
- Dental Treatment (in case of Accident): The insurance company will reimburse Medical Expenses of any necessary dental treatment from a Dentist provided that the Dental treatment is required as a result of an Accident. Maximum liability shall be limited to the amount specified in the Schedule of Benefits.
- Ambulance Charges – In most cases the ambulance charges are paid by the policy and the policy holder usually doesn’t have to bear the same
- Cover for Pre-existing Diseases from Policy Inception – Individual Health insurance policies have the option of covering pre-existing diseases after 3 or 4 years of continuously renewing the policy without any break in period, i.e. if someone has hypertension, then after completion of 3 or 4 years of continuous renewal with the same insurer (depending on the plan offered and his age), any hospitalisation due to hypertension will also be covered)… but under a Group Health Policy, this waiting period is entirely waived off in most cases.
Some of exclusions that all the plans under this category have are below; please refer to the respective insurance company websites/policy terms and conditions for the entire list of exclusions:
- Waiting Periods – Insurers not liable for any treatment which begins during waiting periods except if any Insured Person suffers an Accident.
- Pre-existing Conditions d) We will not make any payment for any claim in respect of any Insured Person directly or indirectly for, caused by, arising from or in any way attributable to any Pre-existing Condition or any complication arising from the same, unless expressly stated to the contrary in this Policy.
- War or any act of war, invasion, act of foreign enemy, war like operations (whether war be declared or not or caused during service in the armed forces of any country), civil war, public defence, rebellion, revolution, insurrection, military or usurped acts, nuclear weapons, materials, chemical and biological weapons, radiation of any kind.
- Any Insured Person committing or attempting to commit a breach of law with criminal intent, or intentional self injury or attempted suicide while sane or insane.
- Treatment of Obesity and any weight control program,
- Psychiatric or mental disorders (including mental health treatments), Parkinson and Alzheimer’s disease ; general debility or exhaustion (“run-down condition”) ,congenital internal or external diseases (known / unknown), defects or anomalies, genetic disorders; stem cell implantation/ therapy or surgery, or growth hormone therapy, sleep apnoea. vii) Venereal disease, sexually transmitted disease or illness; “AIDS” (Acquired Immune Deficiency Syndrome) and/or infection with HIV (Human immunodeficiency virus) including but not limited to conditions related to or arising out of HIV/AIDS such as ARC (AIDS related complex), Lymphomas in brain, Kaposi’s sarcoma, tuberculosis.
- Sterility, treatment whether to effect or to treat infertility, any fertility, sub-fertility or assisted conception procedure, surrogate or vicarious pregnancy, birth control, contraceptive supplies or services and complications arising therefrom.
- Dental treatment and surgery of any kind, other than arising out of an accident and requiring Hospitalisation.
- Plastic surgery or cosmetic surgery unless necessary as a part of medically necessary treatment certified by the attending Medical Practitioner for reconstruction following an Accident Cancer & Burns.
- Any non-allopathic treatment.
- All preventive care, vaccination including inoculation and immunisations (except in case of post-bite treatment) unless certified to be required by the attending Medical Practitioner as part of in-patient treatment as a direct consequence of an otherwise covered claim ; any physical, psychiatric or psychological examinations or testing; enteral feedings (infusion formulae via a tube into the upper gastrointestinal tract) and other nutritional and electrolyte supplements, unless certified to be required by the attending Medical Practitioner as a direct consequence of an otherwise covered claim.
- Treatment and associated expenses for alopecia, baldness, wigs, or toupees, medical supplies including elastic stockings, diabetic test strips, and similar products.
- Artificial limbs, crutches or any other external Aids & Appliance and/or device used for diagnosis or treatment (except when used intra-operatively).
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:
- 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