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Erection All Risk (EAR) Insurance
This branch of Engineering insurance offers comprehensive and adequate protection against all the risks involved in the erection of machinery, plant and steel structures of any kind,as well as third party claims in respect of property damage or bodily injury arising in connection with the execution of an erection project.
EAR insurance provides a very wide cover. Almost any sudden and unforeseen loss or damage occurring to the property insured on the erection site during the period of insurance will be indemnified. Normally the Insurer will be liable for loss or damage due to the following causes:
- Fire, lightning, explosion
- Flood, inundation
- Windstorm of any kind
- Theft, burglary
- Faults in erection
- Negligence, lack of skill, lack of experience, malicious acts
- Short-circuiting, arcing, excess voltage
- Excess pressure or vacuum, tearing apart on account of centrifugal force.
- Any other sudden and unforeseen event, such as loss or damage due to collapse, foreign objects, on-site transport of items to be erected, etc.
The cover is subject only to a few exclusions which are applied internationally and are common to the insurance industry. These exclusions are named in the policy and essentially comprise.
- Loss or damage due to faulty design,
- defective material or casting,
- bad workmanship.
However, if the manufacturer of the machinery or plant to be insured is at the same time commissioned with the erection work and named in the policy as the Insured, it is possible to include resultant physical damage in respect of the insured items due to the above- mentioned causes. However, the expenses for rectifying the original fault – had such fault been discovered before the loss occurred – are still excluded from the cover.
- Loss of or damage to erection machinery and equipment due to mechanical and/or electrical breakdown or derangement
- Loss or damage due to wilful acts or wilful negligence of the Insured or of his representatives.
- Consequential loss of any kind or description whatsoever, such as claims from penalties, losses due to delay, lack of performance, loss of contract.
- Loss or damage due to war or warlike operations, civil commotion of any kind as well as acts on the part of strikers and locked-out persons.
- Loss or damage due to nuclear reaction, nuclear radiation, radioactive contamination
Coverage commences directly after unloading of the items to be insured at the site and continues until the erection work and testing operations have been completed. It therefore includes loss or damage during storage, during the period of erection and during test operation or test loading.
In addition, it is possible to extend the period of cover to include a maintenance period.
Maintenance Visits Cover
The Insurer’s liability during the maintenance period is limited to loss or damage caused by the Insured in the course of the operations carried out for the purpose of complying with the obligations under the maintenance provisions of the contract.
Extended Maintenance Cover
In addition to the protection provided under the Maintenance Visits cover, this coverage also includes loss or damage caused during the erection period.
Maintenance Guarantee Cover
If the Insured is the manufacturer of the machinery or plant to be insured and has also been commissioned with the erection work, the manufacturer’s liability during the guarantee period, as stipulated in the supply contract. can be included in the insurance to a certain extent in addition to the above- mentioned covers. However, this type of cover is normally regarded as very hazardous.