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CAR / EAR Policy

Contractors’ All Risks (CAR) Insurance Policy & Erection All Risks Insurance Policy (EAR)

unforeseen, and fortuitous causes to the property(ies) insured at the project site whilst being stored, erected, tested and commissioned. The policy is suitable for all types of electromechanical works such as power plants, electrification projects, pharmaceutical plants, other similar plants.

The transportation risks associated with plants, machinery & other project cargoes can be added to the EAR policy / SCE policy.

The related parties can be either

  • The principal/owner of the project.
  • The manufacturer or supplier of machinery if they are responsible for construction, erection & commissioning of the project.
  • The contractor(s) / subcontractor(s) entrusted for the construction, erection & commissioning of the project.

The policy is issued covering the completely erected value of the project and for the construction period & testing period.

This is a comprehensive policy, covers all risks of physical loss or damage due to the causes, some are illustrated below, except for those excluded.

  • Location perils – Fire, lightning, burglary, etc.
  • Handling perils – Collision, impact, dropping, failure of cranes, etc.
  • The human element – Carelessness, negligence, faults, defective workmanship, malicious damage, etc.
  • Acts Of God – Storm, tempest, flood, inundation, earthquake, etc.
  • Operational perils – Short circuit, testing, explosion, insulation failures, etc.

The project’s works have become complex and fraught with challenges. Every stage starting from designing to procurement to erection etc can spring some surprises which may have a strong financial impact on the project cost and timely completion. Accordingly, the policy can be extended to include many more covers, some are illustrated below –

  • Additional custom duty.
  • Third-party liability including cross liability.
  • Offsite storage / Storage at fabricators’ premises / workshop.
  • Owners’ surrounding property.
  • Clearance & removal of debris.
  • Express freight, overtime, holiday wages.
  • Airfreight.
  • Expediting costs including air freight, express freight.
  • 50 / 50 clause.
  • 72 hours clause.
  • Debris removal – specific sum has to be opted.
  • Professional fees – specific sum has to be opted.
  • Loss minimization expenses – specific sum has to be opted.
  • Free automatic reinstatement up to the full sum insured.
  • Waiver of the contribution clause.
  • Waiver of subrogation clause.
  • Amendment in fire fighting endorsement.
  • Construction plant & machinery (only for limited value & covers).
  • Valuable documents – restricted to Rs 50.00 lacs.
  • Design defect.
  • Maintenance / Extended maintenance.
  • An escalation in project value.
  • Continuity in the cover during the operational phase for the unit/plant tested but awaiting integral testing.
  • Cover for the contract works taken over and put to us.
  • Earthquake.
  • Terrorism.

Similarly, the policy can be extended to cover the delay in start-up, advance loss of profit, etc to make it more comprehensive.