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What is Erection All Risk Insurance
EAR Insurance: Your Machinery Installation’s Safety Net!
Think of EAR insurance as having a team of insurance engineers babysitting your multi-crore machinery from delivery truck to final test-run! It’s comprehensive protection for plant and machinery during the trickiest phase—erection, installation, testing, and commissioning—because expensive equipment and gravity are natural enemies.
Whether you’re installing a ₹50 crore power plant or setting up automated manufacturing lines, EAR insurance ensures that installation mishaps don’t cost more than the machinery itself. It’s like having warranty coverage that actually covers real-world installation drama—not just factory conditions!
Why Is This Policy Vital for Industrial Projects
Because Installation Is Where Expensive Becomes Catastrophic!
Machinery and plant equipment represent 60-80% of industrial project costs, with single units costing ₹10 crore to ₹500 crore. Erection phase sees 40% of project claims due to technical complexity. EAR insurance is the difference between “successful commissioning” and “insurance for bankruptcy lawyers.” It’s survival insurance for industrial India!
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Who Needs Erection All Risk Insurance?
Power Plant Developers
Thermal, solar, and wind energy projects need coverage for turbine installation, generator setup, and grid connection.
Manufacturing Companies
Factories installing production lines, CNC machines, and automated systems require comprehensive erection protection.
Renewable energy projects
Solar module mounting, inverters and wind turbine erection.
Chemical & Pharmaceutical Plants
Process equipment installation, reactor setup, and pipeline erection require EAR coverage.
Water Treatment Facilities
Pumping stations, treatment plants, and distribution systems need installation phase protection.
Steel & Cement Plants
Heavy industrial machinery erection, kiln installation, and furnace setup require robust coverage.
Types / Add-ons Commonly Offered
Material Damage Section
Machinery and equipment damage coverage.
Third-Party Liability
Property damage and injury coverage.
Marine Transit Cover
Combined marine-cum-EAR for imports.
Testing & commissioning
Covered for the testing period stated in the policy.
Maintenance Period
Post-commissioning coverage (6-12 months).
Surrounding Property
Existing plant and property coverage.
What Erection All Risk Insurance Covers
Installation Damage
Physical damage to machinery or equipment occurring during installation at the site.
Testing Failures
Damage arising during trial runs or performance testing before commissioning.
Fire & Explosion
Damage to plant and equipment from fire or explosion during erection.
Collapse & Fall
Structural collapse or fall of machinery/equipment during erection work.
Operator Error
Damage caused by accidental mishandling by installation crew or operators.
Natural Disasters
Damage from floods, storms, earthquakes, and other natural calamities during erection.
Theft & Vandalism
Loss of equipment or materials due to theft or intentional damage at the site.
Third-Party Liability
Legal liability for injury or property damage caused to third parties during erection.
Storage Damage
Damage to equipment while stored on-site before or during installation.
Inclusions & Exclusions
✓Inclusions
- Machinery Under Erection — All equipment, machinery, and components during storage, installation, and testing phases.
- Testing & Commissioning — Damage during trial runs, load tests, and performance verification.
- Third-Party Liability — Legal liability for property damage and bodily injury during erection activities.
- Surrounding Property — Existing plant and property damage from erection activities (when included).
- Professional Fees — Engineer and supervisor fees for damage assessment and redesign up to the limit in the policy schedule.
✗Exclusions
- Design Defects — Manufacturing defects, faulty materials, and design errors (only consequential damage covered).
- Defective Workmanship — Costs of rectifying poor erection work (only resultant damage covered).
- Wear and tear, rust and gradual deterioration — Not covered.
- Electrical/Mechanical Derangement — Internal failures without external damage evidence excluded.
- Consequential loss — Delay, lost production and penalties are not covered. Delay in start-up needs a separate Advance Loss of Profit (ALOP) policy.
FAQs
With marine-cum-EAR combo! Standard EAR starts at site delivery. Shipping separately = marine needed, combo policy = covered!
Yes! Damage during load tests and commissioning trials is covered.
CAR is mainly for civil construction works; EAR is mainly for installing machinery and plant. For projects that involve both, speak to us about the right cover.
No! Maintenance period (typically 6-12 months) needs specific inclusion.
Only with surrounding property extension! Standard EAR covers new machinery only.
From first delivery at site! Coverage lasts through installation, testing, commissioning, and maintenance period.