Iqra Razzaq 10

Bushra Zafar 008

Erection All Risks

Insurance Policy

INTRODUCTION
The 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 policy
Comprehensive insurance solution coverage
Reducing the overall construction and erection expenses
Provide protection against unforeseen accidents

Who can take the Insurance?

Contractors
Firms commissioned to carry out the work, including
subcontractors
The purchaser or owner
Parties financing the project

All 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
Erection
Storage
Testing
Commissioning

Coverage on broader scale

Fire, lightning, explosion, aircraft damage

Riot, strike, malicious act
Flood, inundation, storm, cyclone and allied perils
Landslide, subsidence and rockslide
Burglary and theft
Faults in erection
Human errors
Short circuiting, arcing, excess voltage
Electrical and mechanical breakdown
Collapse, damage due to foreign object, impact damage

General conditions of policy

Insured should:
Take reasonable precautions and recommendation to
prevent loss
Provide all details and necessary information to broker
Immediately notify material change in risk
Immediately notify the claim to broker
Take all steps to minimize the extent of loss
Provide all documentary evidences of claim
Inform police authorities if damage is due to theft

Cont..
If difference in amount under the policy arise, it should
refer to arbitrator
If claim will fraudulent, all benefits will be forfeited
Contribution law
Policy is subject to law of Islamic republic Pakistan.

Coverage
Section 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 specified

Provides 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
property

Cont..
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 defects

Loss or damage due to willful act or willful negligence
Loss or damage due to war or warlike operations
Loss or damage due to nuclear reaction, nuclear radiation or
radioactive contamination
Losses due to normal wear and tear, gradual deterioration
Cessation of work

Special exclusions to section 1

The insurer shall not liable for:
Deductible
Consequential losses
Loss due to faulty design, defective material, bad workmanship
Wear and tear and oxidation
Losses to files,drawings,accounts,bills,evidences of debts and
packing material
Inventory loss

Extension of cover in section 1

Overtime
Night work
Work on public holidays
Express freight

Exclusions to section 2
Insurer will not be liable for:
Deductible
Repair and replacing expenditures covered under section 1 of the
policy
Bodily 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 1
Any 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 contract
Location of Erection Site
Proposer
Principal
Main Contractor
Sub Contractor
Manufacturers of main items
Manufacturers of main items
Consulting Engineer

Construction schedule

Basis of settlement

If 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.