The initialisation or commencement of a project is prone to various operational, natural, and accidental hazards. During the erection stage of a project, as a businessman, you must make necessary arrangements to protect your investment (i.e. machinery, plant, or equipment) against potential losses or damages.
As even the slightest damage to a component can cause heavy financial losses and might bring your project to a standstill, you must invest in an insurance policy that protects your business or project from this kind of damage.
What is Erection All Risk (EAR) Insurance?
Erection All Risk (EAR) Insurance is an insurance policy that gives your project a continuous and extensive cover, right from the time the first consignments are received at your site location until the final testing of the machinery, plant, or equipment related to your project.
Besides providing insurance for the erection and installation of electrical or mechanical plant and machinery, Erection All Risk (EAR) Insurance protects your business from physical loss or damage from perils such as fire, lightning, and natural catastrophe. Additionally, this policy also covers the legal liability and claims that may arise due to third-party bodily injury and property damage.
What are the Benefits of an Erection All Risk (EAR) Insurance policy
Although there are plenty of benefits of an Erection All Risk (EAR) Insurance policy, a standard Erection All Risk (EAR) policy essentially provides insurance cover for the below-mentioned elements and eventualities:
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Protection of machinery, plant, and equipment at the project site during erection and installation phases.
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Cover against perils like fire, lightning, burglary, explosion, and natural disasters.
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Protection of machinery right from the commencement of its loading for dispatch to the project site.
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Machinery breakdown during testing and commissioning processes.
This protection cover can be extended for the following liabilities or risk factors on payment of an additional premium-
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Third-party liability
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Cross liability
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Cost of removal of debris
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Material damage coverage like additional custom duty, express freight, and wages
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Cost of damage to surrounding property
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Dismantling
Some of the exclusions under the Erection All Risk (EAR) Insurance policy are-
Other key benefits or features of Erection All Risk (EAR) Insurance policy
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This policy can be taken in the joint name of the contractor and the employee.
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It provides comprehensive coverage for the insured projects during the erection, storage, and testing stages of these projects.
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The policy offers various add-ons as per the business needs of the customer.
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The benefits of the policy are applicable for the entire period of the insured project.
Conclusion
Erecting new structures for your business projects and installing equipment at your new or existing project sites can be a long and risky process. And besides erection, you also need to take care of testing and maintaining your equipment and machinery during the tenure of these business projects.
Therefore, it is advisable for both owners and contractors to take an insurance policy to shield their businesses and projects against any impending financial losses.