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What is Engineering Insurance?

Engineering insurance protects you from financial losses during engineering projects’ construction, operation or maintenance. Whether you’re working on a large-scale construction site, managing heavy machinery or overseeing a technical installation, things don’t always go as planned. Accidents, machinery breakdowns or even natural disasters can disrupt your work and lead to unexpected expenses that may wipe out your savings in no time.

With engineering insurance, you can safeguard your investment, ensuring that you’re covered for risks like equipment damage, project delays or third-party liabilities. This insurance policy acts as your safety net—helping you focus on the project without constantly worrying about the “what ifs.”

Types of Engineering Insurance Coverage in India

The different types of insurance coverage available in India under this policy are:

Contractor’s All Risk Policy

A Contractor's All Risk policy is designed to provide comprehensive insurance coverage for construction projects. It safeguards contractors, subcontractors and project owners against various risks during construction.
Whether it's accidental damage to the construction site, theft of materials or natural calamities like floods or earthquakes, this policy minimises the financial impact of such unforeseen events. It typically covers not just the building under construction but also equipment and third-party liabilities that may occur due to construction activities. Read less Read more..

Contractor’s Plant & Machinery Insurance

Contractor’s Plant & Machinery Insurance protects the valuable equipment and machinery used in construction and related activities. Whether it’s excavators, cranes, bulldozers or other heavy equipment, these assets are crucial for completing projects on time. This policy ensures coverage against accidental damages, theft, fire and natural calamities like earthquakes or floods.
This insurance is beneficial for contractors who depend on high-value machinery to keep their operations running smoothly. It provides peace of mind, knowing that even in unforeseen situations, the cost of repairs or replacement won’t burden the business. Read less Read more..

Erection All Risk Insurance

Erection All Risk engineering insurance is designed to provide all-round protection especially during the installation of machinery, plants or steel structures. This insurance safeguards against unexpected events like fire, natural disasters, theft or accidents that could damage equipment or delay the project.
Whether you're setting up a new factory, installing large machinery, or undertaking complex engineering work, Erection All Risk insurance ensures your financial investment is protected from unforeseen risks. Read less Read more..

Other Types of Engineering Insurance Policies

Some other types of plans available under this insurance are:

1

Machinery Breakdown Policy

A machinery breakdown policy protects businesses from financial losses when their machines suddenly break down. Machines are the backbone of many industries and unexpected breakdowns can cause delays and losses.

This policy covers the cost of repairing or replacing the damaged machinery, ensuring minimal disruption to operations. It applies to a wide range of machinery, including production equipment, generators and other essential tools used in industries.

2

Boiler Pressure Plant Insurance Policy

A boiler pressure plant insurance policy is essential for industries that operate boilers and pressure vessels. These machines play a crucial role in the production process but also carry certain risks. Accidents or malfunctions can lead to severe damage, causing disruptions in operations and even safety hazards.

This insurance policy offers financial protection against such risks, covering damage to the boilers & pressure vessels (except Fire), and even damage to surrounding property. It ensures businesses are not left with hefty repair bills or production delays due to unforeseen events.

3

Electronic Equipment Policy

An electronic equipment policy protects your valuable gadgets and electronic systems from unexpected damage. It covers equipment like computers, medical machines and industrial electronics.

The engineering policy ensures financial support for repair or replacement in case of fire, theft, accidental damage or even natural disasters. This policy is ideal for businesses and individuals who rely heavily on electronic equipment.

What is covered in Engineering Insurance

An engineering policy generally covers the following:

Inclusions
Exclusions

Malicious acts and riots: Protection against damages caused by intentional harm or civil disturbances like riots.
Fire, lightning, explosion: Coverage for damages resulting from fire, lightning strikes or explosions.
Floods, catastrophic storms, and other associated perils: Protection against natural disasters like floods and severe weather events.
Earth's movements, including landslides, rockslides, and subsidence: Coverage for damages caused by movements of the earth, such as landslides and sinking ground.
Defects in construction: Protection against faults in construction, whether structural or material, that may lead to damage or failure.
Burglary or theft: Coverage against loss or damage due to theft or burglary.
Human errors or negligence: Protection against damages resulting from mistakes or negligence during engineering processes.
Voltage fluctuations, short-circuits: Coverage for electrical damages caused by power fluctuations or short circuits.
Mechanical breakdown: Protection for mechanical failures or breakdowns of equipment and machinery.
Impacts, foreign objects, collapses: Coverage for damages resulting from impacts, foreign objects or structural collapses.
Any unforeseen accidents: Coverage for unexpected accidents or events that are not otherwise specifically mentioned in the policy.

Go through the policy documents to know the inclusions in detail.

War or invasion
Deductibles - Contributed by the insured
Radioactive contamination due to Nuclear Reactions
Willful misconduct, such as planned negligence
Poor workmanship and subpar quality of material
Discontinuation of work
Deterioration caused by oxidation and wear and tear
Damage of glass
Shortage caused by the disappearance or other factors
Defective design
Loss of drawings, files, or financial instruments like cash, cheques, etc.
Terrorism
Any involved party’s failure to meet their contractual obligation

Go through the policy documents to know the complete list of exclusions.

Add-ons in Engineering Insurance

In this insurance, you can extend your coverage with add-ons. These add-ons offer additional protection beyond the base plan, helping you to cover specific risks. You can choose these add-ons for a small additional premium. However, it is essential to note that the add-ons cannot exceed the coverage limit set by the base policy.

Though add-ons may differ, some common add-ons available in this insurance are as follows:

Cross Liability: This covers if you are held liable for damage or injury to a third party, even if the insurance policy also covers that third party.
Third-Party Liability: Protects you in case you are found liable for damage or injury to a third party, providing coverage for legal costs and compensation.
Express Freight and Charges of Overtime: Covers additional costs incurred for express freight or overtime charges needed to speed up operations or transportation.
Debris Removal Cost: Provides coverage for the cost of clearing debris following an insured event, helping to restore the site quickly.
Airfreight: Covers the cost of transporting goods by air in case of urgency or transportation needs.
Escalation: Covers increases in construction costs, such as price hikes for materials or labour, ensuring that the policy provides enough coverage to accommodate these rises.
Additional Custom Duty: Provides coverage for any extra customs duties that may arise due to the importation of goods during a project.
Surrounding Property of the Owner: This add-on protects the owner's surrounding property from damage caused during construction activities.
Dismantling: Covers the cost of dismantling machinery or structures after a loss, ensuring that the worksite can be cleared efficiently.
Storage Risk at the Premises of Fabricators: Covers risks related to storing materials or equipment at the premises of fabricators, ensuring protection against loss or damage.
Extended Maintenance and Maintenance Cover-Visit: Provides ongoing maintenance and support for the insured equipment or machinery, covering regular inspections and technician visits.

Engineering insurance articles