Erection All Risks Insurance

What is Erection All Risks Insurance?

Erection All Risk (EAR) Insurance policy covers any loss or damage to projects involving the erection or installation of a plant, machinery, and equipment. It guards against physical loss or damage to the contract works, building machinery, or construction equipment for the contractor or employer. It also offers financial protection against bodily injury and damage to third parties' property.

Erection All Risk or Construction Erection All Risk Insurance can be purchased annually and may cover one specific project or a number of projects throughout the year.

Who Needs Erection All Risks Insurance?

According to the UAE laws, any entity carrying out either an erection or a construction project is required to have this policy. Thus, besides any contractor or subcontractor carrying out a project, any organisation that owns or manages an erection project, such as an installation or an energy company may require Erection All Risk Insurance as well.

Why Get Erection All Risks Insurance?

Erection All Risk Insurance is specifically designed for businesses involved in construction projects such as the erection of buildings. Listed below are some of the reasons why you should get an Erection All Risk insurance if your organisation is involved in such projects - 

• It protects against risks associated with the construction process, such as damage to materials, equipment, and buildings, theft, and vandalism.
• With an Erection All Risk Policy, businesses enjoy comprehensive protection that covers physical damage to the structure, machinery, and materials. 
• It also offers financial protection against potential losses arising from construction delays. 
• An Erection All Risk Insurance policy can provide additional coverage for liability, third-party property damage, and pollution. 

Common Risk Scenarios in Erection All Risks Insurance

Some of the most common risk scenarios with respect to the Erection All Risk Insurance are as follows - 

• Damage to property and equipment due to natural disasters such as earthquakes, floods, and storms
• Accidental damage to machinery and equipment during the erection 
• Loss or damage of raw materials and finished products due to theft or other malicious activities 
• Liabilities arising out of any accidents on the premises 
• Any loss or damage sustained while materials are in transit or storage 
• Legal liabilities arising from the negligence of contractors or third parties 
• Losses due to faulty design, material, or workmanship during the erection

Major Inclusions of Erection All Risks Insurance

Here are some of the major inclusions of Erection All Risk insurance - 

• Coverage of physical loss or damage to contract works, plant and machinery, building materials and equipment due to natural calamities and other accidents
• Protection against any legal liability arising out of the contractor's activities
• Protection against any third-party liability
• Cover for contractual liabilities
• Owner's surrounding property
• Testing period coverage
• Cover for public liability
• Protection against any theft or burglary
• Auto reinstatement of sum insured.

Major Exclusions of Erection All Risks Insurance

Besides the inclusions, it’s necessary to examine the exclusions as well to better understand your insurance policy. The following are the major exclusions of Erection All Risks insurance - 

• Loss, damage, or expense caused by inherent defects of the item insured's design, construction, or materials 
• Loss or damage due to deterioration, wear and tear, normal structure settling, or inadequate maintenance 
• Loss or damage due to insufficient working or operating pressure of the insured items 
• Loss or damage due to nuclear perils, war, and civil unrest 
• Loss or damage due to errors in the erection, assembly, or installation of the item insured
• Loss or damage due to latent defects in the item insured 
• Loss or damage due to vermin, termite, fungus, bacteria, and virus infestations 
• Loss or damage caused by acts of terrorism

Factors Affecting the Pricing of Erection All Risks Insurance

The pricing of an Erection and All Risk insurance depends on various factors. Given below are some of the most common factors - 

• Nature of the project
• Contract value and duration of the project
• Location
• Add-ons chosen
• Previous claim experience
• Whether water risk is involved.

With massive infrastructure development undergoing, the UAE has numerous opportunities in the construction field. Your organisation can easily initiate construction projects and erect new structures with an Erection All Risk Insurance plan which can provide sufficient coverage against unanticipated events. 

Understanding the importance of insurance that specifically covers your requirements, we at Policybazaar UAE, provide you with world-class, cost-effective risk management strategies and solutions through insurance. With our customised plans, you can now have peace of mind and focus on achieving your goals.

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