Erection All Risks Insurance Policy

Iqra Razzaq 10Bushra Zafar 008Erection All Risks Insurance PolicyINTRODUCTIONThe Erection All Risk Insurance is a comprehensive insurance which provides complete protection against all types of risks involved in the installation of machinery, plant and steel structures of any kind.

Benefits of policyComprehensive insurance solution coverageReducing the overall construction and erection expensesProvide protection against unforeseen accidents Who can take the Insurance? ContractorsFirms commissioned to carry out the work, including subcontractorsThe purchaser or ownerParties financing the projectAll risk policy coverage'All Risk' policy covering sudden and unforeseen physical damage to projects under erection insured by any cause or peril not specifically excluded under the policy ErectionStorageTestingCommissioning

Coverage on broader scaleFire, lightning, explosion, aircraft damageRiot, strike, malicious actFlood, inundation, storm, cyclone and allied perilsLandslide, subsidence and rockslideBurglary and theftFaults in erectionHuman errorsShort circuiting, arcing, excess voltageElectrical and mechanical breakdownCollapse, damage due to foreign object, impact damage

General conditions of policy Insured should:Take reasonable precautions and recommendation to prevent lossProvide all details and necessary information to broker Immediately notify material change in riskImmediately notify the claim to brokerTake all steps to minimize the extent of lossProvide all documentary evidences of claimInform police authorities if damage is due to theft

Cont..If difference in amount under the policy arise, it should refer to arbitratorIf claim will fraudulent, all benefits will be forfeited Contribution lawPolicy is subject to law of Islamic republic Pakistan.CoverageSection I (material damage)Section II Provides coverage for the property lost, damaged or destroyed by any cause, other than those specifically excluded in the Policy, necessitating replacement or repair. The Company will pay or make good all such loss or damage up to an amount not exceeding the sum specified in respect of each of the items and not exceeding in the whole the total Sum Insured specifiedProvides coverage towards: a) legal liability for accidental loss or damage caused to property of other persons b) legal liability for injury to or illness of any persons other than the Insured's own employees or workmen or employees of the owner of the works or premises due to construction of any propertyCont..The Policy also provides for payment of: a) All cost and or expenses of litigation recovered by any claimant from the Insured. b) All cost or expenses incurred by Insured with the written consent of the Company.

General exclusions Loss or damage due to faulty design, Manufacturing defectsLoss or damage due to willful act or willful negligenceLoss or damage due to war or warlike operationsLoss or damage due to nuclear reaction, nuclear radiation or radioactive contaminationLosses due to normal wear and tear, gradual deteriorationCessation of workSpecial exclusions to section 1The insurer shall not liable for:DeductibleConsequential lossesLoss due to faulty design, defective material, bad workmanshipWear and tear and oxidationLosses to files,drawings,accounts,bills,evidences of debts and packing materialInventory loss

Extension of cover in section 1OvertimeNight workWork on public holidaysExpress freightExclusions to section 2Insurer will not be liable for:DeductibleRepair and replacing expenditures covered under section 1 of the policyBodily injury of employees of contractor or principal which is covered in section1 Loss or damage to property belonging to contractor or principal which is covered in section 1Any accident caused by vehicle licensed for general road use

Sum insured The sum insured for the insurance should represent the completely erected value of the property, inclusive of freight, customs duty and erection cost.

Question need to be asked for underwriting the Policy

Title of contractLocation of Erection SiteProposer PrincipalMain ContractorSub ContractorManufacturers of main itemsManufacturers of main itemsConsulting Engineer

Construction scheduleBasis of settlementIf there is a total loss we will replace the property or pay for the loss or damage in money. This is limited to the market value of each item. If there is a partial loss we will pay for the cost of repairing the item up to the amount that would be paid had there been a total loss.

Cont..

Cost of repair We will cover the Insureds legal liability for loss or damage and continuing hire charges stemming from this loss or damage under the hiring agreement or otherwise. Where the plant is over one year old, this liability is limited to the liability under the Model Conditions for the hiring of plant approved by The Construction Plant hire Association.