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What is Erection All Risks Insurance?

What is covered in Erection All Risks Insurance?

Damege to property

Damage to property

The policy ensures that if anything is lost, damaged or destroyed by any cause, other than those specifically excluded during the policy period will be covered. The cost of clearance and removal of debris is also covered under the insurance policy.

Third-party liability

Third-party liability

Under third-party liability, Digit’s policy will cover legal liability for loss or damage to third party property and for fatal and non-fatal injury to any person other than your own employees.



In addition to that, all expenses of litigation recovered by a claimant and those incurred with the insurer’s written consent will be compensated under the policy.

Comprehensive cover

Comprehensive cover

The policy provides financial protection to the engineering contracts which may arise during the course of erection and testing of project.

Covers the entire project

Covers the entire project

The policyholder can avail the policy for the whole duration of the project. It means that damages caused from the time of arrival of material at the site until completion of testing and commissioning are covered.

What’s not Covered?

There are specific exclusions under Digit’s insurance policy. Some of them are as follows:

Loss or damage discovered at the time of taking an inventory.

Damage due to normal wear and tear and gradual deterioration due to atmospheric conditions.

Damage caused due to faulty design, defective material, bad workmanship other than faults in Erection.

The cost incurred for rectification of any error during erection unless resulting in physical damage.

Damage caused to files, drawings, accounts, bills, currency, stamps, deeds, notes, securities, etc.

Penalties on account of the insured non-fulfilment of the terms of completion under the contract of erection or for any other obligations.

Accidents caused by vehicles in transit.

Any agreement by the insured to pay any sum by way of indemnity or otherwise unless such liability would have attached also in the absence of such agreement.

Liability consequent upon bodily injury to, illness of employees/workmen of the principal/ contractor/any other firm connected with the project is not covered.

Loss of or damage to property belonging to or held in care, custody, or control of the contractor, principal or any other form connected with the project which or part of which is insured.

Who needs Erection All Risks Insurance?

The insurance policy can be bought by the ones mentioned below:

Owners of the company or factory

The Erection All Risks policy must be bought by owners of the company or factory. Given that they are the ones who will have to bear the brunt of the expenses caused due to the damage at the time of installation, it is essential to have a policy in their name.

Manufacturers and Suppliers

The manufacturers of the equipment and their suppliers can also buy the insurance policy. It can come in handy if there is some defect in the installed equipment.


Those who get the contract to install the equipment in the office or factory can also buy Erection All risks insurance.


Subcontractors assigned by the contractors to complete a specific task related to installing the machinery can also avail the policy.

Why do you need to buy Erection All Risks Insurance policy?

Avail Digit’s Erection All Risks Insurance policy for:

All physical damages

The policyholder can claim any material damage or loss reported during the course of installation under the policy. 

During test and maintenance

If there is any damage to property during the course of test run and maintenance, the policy will cover it. 

How is the premium calculated for Erection All risks insurance?

The premium under Erection All Risks insurance policy depends on the factors listed below:

Sum Insured

Irrespective of any insurance policy, the payable premium is mainly dependent on the sum insured. Higher the sum insured, high the premium and vice versa. In addition to that, associated risk and the estimated completed value of the project plays a part in the payable premium.

Project duration

The time taken for installing the machinery or equipment at the project site also impacts the premium for the policy. The premium will be high if the period is longer.

Testing period

Once the installation of the new machinery is complete, there is a time where it is under testing before it is handed over to owners of project.  This period plays a part in setting up the premium. 

Voluntary access sought by the insured

The policyholder can opt for some voluntary access as part of the policy. It offers reduction in premium payable under the policy. 

How to choose the best Erection All Risks Insurance policy?

FAQs about Erection All Risks Insurance in India