Protect your green projects with Contractor’s all risk insurance

Why is it important to invest in Contractor’s all risk insurance?

Here are some key reasons to invest in Contractor’s all risk insurance:

• Third-party liability coverage

You are constructing a solar farm near a residential area. Due to unforeseen circumstances, your installed solar panel falls from a height and injures a passerby. The victim files a lawsuit against you and demands compensation for medical expenses.

Without Contractor’s all risk insurance, you are liable to pay out of pocket. But since you are covered, the insurer will cover the third-party injuries and legal expenses. 

• Protection against theft

You have installed solar panels in a remote village to ensure you receive continuous electricity for uninterrupted irrigation. The solar system has many costly components, such as solar inverters, copper wiring and turbine parts. One night, a group of thieves steals valuable wiring and batteries and halts your entire agricultural tasks.

If you do not have insurance, replacing stolen items would drain your budget. Contractor’s all risk insurance reimburses you for your losses and also allows you to resume work without major financial setbacks.

• Covers natural disasters

You are setting up a wind farm in coastal India. You have meticulously planned every aspect of the project to ensure it aligns with your sustainability goals. However, during monsoon season, a cyclone hits and damages multiple turbines, setting your project timeline back by months. 

With the right policy, you get financial coverage for repairing or replacing damaged equipment.

• Cover workers

Construction workers face various risks on-site. You may be held legally responsible for medical expenses and compensation if a worker gets injured.

For example, if a worker slips while installing solar panels and suffers a serious injury. Medical bills and compensation claims can be substantial. Without Contractor’s all risk insurance, you pay these costs directly. With this insurance, the policy covers medical expenses and legal liabilities, protecting your company’s financial stability.

What does Contractor’s all risk insurance not cover?

Contractor’s all risk insurance does not cover the following incidents:

• You won't receive coverage if the damage results from substandard workmanship or faulty materials. 
• Gradual deterioration, rust, corrosion or normal wear and tear over time isn’t covered.
• Any damage that existed before the insurance policy started is excluded. To avoid claim rejections, you should conduct a thorough site inspection before purchasing the policy.
• Losses caused by war, terrorism, insurrection or political violence are not covered. 
• Damage resulting from nuclear reactions, radiation or radioactive contamination is excluded. 
• If you, your employees or subcontractors deliberately caused the damage, the claim will be denied. 
• The insurance won’t cover financial losses due to delays, penalties or liquidated damages imposed by the contract.

What factors impact the premium for Contractor’s all risk insurance 

Here are some of the key parameters that decide the premium for Contractor’s all risk insurance:

• Project value: The higher the cost of your construction project, the more expensive your insurance will be.
• Project type: Whether you are constructing a residential building or a high-risk infrastructure project, the risk level affects your premium. More complex projects attract higher costs.
• Project duration: The longer your project takes to complete, the higher the insurance cost. The reason is that a prolonged timeline increases the chances of unforeseen risks.
• Location of construction: The insurer will charge a higher premium if your project is in an area prone to natural disasters or with a high crime rate.
• Claims history: If you or your company have a history of frequent claims, insurers may see you as a high-risk customer, which ultimately leads to higher premiums.

Conclusion

Green projects are crucial for a sustainable future but come with significant risks. Contractor’s all risk insurance ensures unforeseen damages don’t derail your progress. From natural disasters and theft to third-party liabilities, Contractor’s all risk insurance provides comprehensive protection, saving you from massive financial setbacks.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.