Erection All Risk Insurance policy
At the present time, with the wide openness that our urban communities live, which requires insurance on those engineering risks that can occur, specifically related to Erection All Risk insurance, This policy provides comprehensive coverage against all risks unless something is excluded from it, and the insurance coverage can be expanded to cover additional risks such as liability to third parties, and what we will learn about this type of insurance Details
What is the Erection All Risk insurance policy ?
This type of insurance covers those construction projects during their implementation periods until they are delivered to their owners, through the issuance of various documents covers for those risks to cover the risks related to the structures such as fire hazards, theft, civil liability and other risks, where the coverage extends to include periods of trials, tests, and maintenance such as the installation of machinery, equipment, machines, and production lines, to cover This insurance covers all the risks of the compositions, to show us the advantages of this type of insurance, we mention them:
Work on covering the dangers of fire, explosion, storms, floods, earthquakes, theft, electrical hazards and rupture.
Work to cover civil liability for physical and material damage that occurs to others due to the implementation of installation and construction.
Work on compensating the losses of structures resulting from natural hazards, which would preserve the wealth of those businesses and establishments.
Work on studying the dangers of compositions that cause danger, developing appropriate solutions and taking proper procedures to avoid and treat each type of these risks, which provides safety and Prevention.
Scope of insurance coverage
In the practical application of this type of insurance, which is the insurance of all risks of structures, they can be divided into two main types by the type of protection it provides and the nature of the duration it lasts, and the following is an explanation of the scope of insurance coverage as follows:
The first scope is the type of protection provided by the constructor: This scope includes all types of installation and contracting contracts, which can be calculated from the beginning of construction to the date of final delivery of the project, and the coverage in this type is characterized by the following:
The duration of the coverage is limited to the period of execution of the contract only and the insurance is not extended or renewed after that.
Often the installment is non-renewable after the end of the execution of the contract.
the portfolio of this type of insurance is rarely sufficient for fluctuations in premium income.
the insurance amounts in this type are usually very large and this is due to the huge size of the project.
the results of this type of insurance, even when they are good, are unbalanced, the balance is only in the long term.
the severity of the risk during the insurance period is considered heterogeneous, while some projects are increasing in the severity of the risk as the work progresses in the contracting, while in others the opposite happens from the high percentage of risk in the stages of the initial project and then the proportions of the most dangerous begin to decrease.
Also, the erection all risks insurance remains valid after the completion of the contract and for a limited period, this period is called the trial period.
The second scope is the nature of how long the work lasts: It includes insurance of all risks of the compositions, i.e. after the final delivery and during the operating period, i.e. during production, i.e. the coverage is during the production stage. Coverage in this range is characterized by:
Renew the contract annually, as this type of document needs periodic renewal.
Limited duration of insurance, since this type of insurance needs periodic renewal, it is not suitable for long-term documents.
Renewal of expired documents, and the renewal is carried out in the same or equivalent unit.
That the portfolio of this type of insurance is more balanced in terms of premium income than the first type.
Basic sections of the documentThe Erection All Risks Insurance (EAR) can be divided into a set of sections that we explain as follows:
1. Insurance of establishments authorized for the installation process.
2.In addition to those purchases that are made for machines and equipment to be used inside the work facilities, provided that separate documents are extracted for each party involved in them, and it is preferable to extract a document of all installation hazards that is comprehensive for the entire parties to the project, including the names and individual parties until full and appropriate insurance protection is granted.
3. Insurance of individual machines, and assembly devices, which are represented in: Turbines, generators, steam boilers, air compressors, internal combustion engines, electric motors, Transformers, Rectifiers, pumps, elevators, cranes conveyor belts, cable tracks, paper printing machines, textile machines, overhead transmission lines, pipelines, tanks and metal bridges.
4. Insurance of complete electrical facilities and production plants, which are represented in : Electrical plants, metallurgical works, chemical plants, furnaces, textile factories, paper mills, etc., in addition to factories that produce consumables.
General exceptions in the document
Despite the concept of this comprehensive insurance and its designation as an Erection All Risk insurance policy, there are of course many exceptions in this type, and they vary from country to country, so you should return to the insurance company in your country in order to stop all exceptions from insuring the risks of compositions. These exceptions can be broadly divided in many countries into:
1. Those damages that cause losses, whether direct or indirect, due to military activities such as wars and civil revolutions, as well as terrorist activities and the resulting sabotage, riots and chaos, and those acts that destabilize, in addition to the damage caused by atomic reactions and nuclear activities and the danger of reactive radiation, as well as the confiscation of funds for sovereign reasons, these types exclude Completely out of insurances.
2. Those damages that cause losses due to technical malfunctions, whether electrical malfunctions or mechanical malfunctions, in addition to damages that occur due to negligence and non-use, in addition to those works that are carried out randomly and are not in accordance with the applicable construction rules, or those damages resulting from work stoppage, these types are completely excluded from construction insurance.
3.As well as damages that cause losses due to negligence in keeping documents, files, maps, and also important documents, in addition to those damages to structural building materials discovered due to periodic inventory, in addition to the cost of modifying erroneous designs and the cost of maintaining defective structures, in addition to those losses that affect machines on the roads that are maintained outside the construction site, as well as Regarding the contractor from penalties and dependencies, these types are completely excluded from construction insurance.
4.Finally, an exception is made for those accidents that happen to machines near or far outside the construction site, and also excludes the insurance liability of these employees or employees of the insured(Insurance liability)In addition to that liability, which was made in the form of a preliminary agreement, unless the final responsibility lies with the insured.
Loss settlement bases
Losses in the structures of Erection All Risks Insurance can be classified into:
Material losses: It means those losses that affect the insured in his funds and property in the various installation lists, whether it is in those projects where losses occur during construction or during production.
Loss of profits: Profit losses can be divided into two parts:
1. Loss of investment: They are those losses resulting from the inability of the insured to exploit a particular project as a result of not completing it on time.
2. Production losses: They represent those losses that the insured suffers as a result of not being able to secure the full production capacity necessary to complete the construction project, or in connection with those losses in the tools of construction work.
Losses that affect the other person (Others): This loss is represented in the civil liabilities for which the insured is judicially liable to the third party as a result of the execution of his actions, whether that loss is in property or in persons.