What is Erection All Risks Insurance?
Erection All Risks insurance is a policy which provides financial cover during the policy period for loss or damage to project property during the construction phase till successful competition of testing and commissioning of project.
Important facts ·
- As per Indian Labour statistics, the number of fatal injuries from industrial accidents has seen a rising trend.
- As per official data, there were 4,499 industrial accidents in 2014. Out of these, 515 were fatal.
- India has only one inspector for every 500 factories as per data released by British Safety Council.
What is covered in Erection All Risks Insurance?
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:
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.
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:
The policyholder can claim any material damage or loss reported during the course of installation under the policy.
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:
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.
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.
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.
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?
To choose the right Erection All Risks insurance policy, you need to consider the factors mentioned below:
1. Sum insured – Getting the right sum insured is vital for choosing the right insurance policy. It will ensure that you are covered for any eventuality.
2. Right coverage – The policy offering the right coverage is another thing that needs to be considered when deciding which Erection All Risks policy you should avail.
3. Hassle-free claim process – Get the policy from an insurer with a hassle-free claim process. Ensuring that will mean that you get it settled easily and quickly at the time of claim settlement, you get it settled easily and quickly.
4. Compare policies of different insurers – Compare policies offered by other insurers in the market. It will help you know which features the policy has and based on that, select the right policy for yourself.
FAQs about Erection All Risks Insurance in India
Should the policy period be identical to the project period?
Yes, the policy period should be identical to the project period. It includes the arrival of machinery or equipment at the site, testing, and commissioning.
Does Erection All Risks insurance policy cover financial loss due to delay in project completion?
The policy does not cover financial loss due to delays in the completion of project.
Can the policy be bought in joint names?
Yes, you can buy Erection All Risks insurance policy in joint names.
What do AOG perils signify?
AOG refers to ‘Act of God’. Any natural calamity beyond humans’ control of humans can be included under AOG perils. Some are earthquakes, floods, landslides, storms, tsunamis, etc.