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PROJECT INSURANCE

 

                                                                    PROJECT INSURANCE

Following the Make in India directions of the government, the manufacturing and infrastructure sectors have made inroads into the economic activity. Large construction projects involve a number of hazards both for Principals as well as Contractors and the only way to safe guard against all natural and human hazards is by way of Insurance policies. Various types of policies are designed and customized in keeping with the prevalent needs.

Construction Phase Insurance (Project Policies)

These are one time policies issued for entire project period irrespective of whether the project period is a few days or a few years:

I.                     Contractor’s All Risk Insurance (CAR)

II.                   Erection All Risk Insurance (EAR) [ also known as Storage-cum- Erection or SCE Insurance]

III.                 Marine – cum – Erection Insurance (MCE)

I. Contractors All Risk (CAR) Insurance:

This policy is suitable for Construction of Civil works as well as composite projects.

SUM INSURED: The Sum Insured under CAR Policy should represent the completely erected value of the project to be installed including freight, customs duties and erection cost. This should represent the current replacement value of the items when erected. Following heads are to be taken for arriving at the Sum Insured:

a) Marine (Imports) -landed cost at site

 b) Marine (Indigenous) -landed cost at site

 c) Cost of Erection (exclusive of preoperative expenses but inclusive of cost of visits of specialists and supervision charges).

d) Permanent Civil Engineering Works

e) Half the escalated value, if escalation is opted for.

f) Pre- operative expenses.

 For additional Covers, suitable limit has to be selected for the opted ones

II. Erection All Risk (EAR) Insurance

This policy is suitable for erection of individual machines as well as composite projects and connected civil engineering works.

The Sum Insured under EAR Policy should represent the completely erected value of the Plant and Machinery to be installed including freight, customs duties, and erection cost. This should represent the current replacement value of the items when erected

III. Marine Cum Erection (MCE) Insurance

 

This is a comprehensive policy covering all physical risks which a project is exposed to right from the warehouse of the supplier of equipment - whether imported or indigenous - to its erection, testing and commissioning at the site.

 

COVERAGE under CAR & EAR Policies:

All risks involved during storage, assembly, erection/Construction against:

Fire, lightning, explosion/implosion, aircraft damage

Flood, storm, earthquake, landslide,

Theft, burglary, RSMD, terrorism,

Negligence, lack of skill, collision, impact, dropping

Short circuit, electrical/mechanical breakdown etc.

IMPORTANT FEATURES:

·         Construction period Cover starts from the time of commencement of work after the unloading of the property from any conveyance at the specified site and shall expire on the date specified

·         Liability expires for parts of the insured contract works taken over or put into service by the Principal prior to the expiry date

·         Option for mid-term increase in sum insured during policy period

Add On Covers:

Earthquake

Clearance of Debris Removal

Third Party Liability

Owners Surrounding Property

Escalation provision

Inclusion of Express freight/ overtime wages

Inclusion of Air freight

 Additional Custom Duty

 CPM- up to 5% of Sum Insured or Rs 25 lacs whichever is lower. (Above this value shall be covered under a separate CPM policy)

Limited/ Extended Maintenance cover

Terrorism cover

Free automatic reinstatement clause

Cover for Offsite storage/ fabrication

Design defect covers-DE2, DE3 for CAR; DE4-EAR

Additional customs duty

 Valuable documents

 

IV.ADVANCE LOSS OF PROFITS (ALOP)

Covers Loss of Anticipated Gross Profits due to delay in the completion of project as a result of an insured peril operation.

V.MACHINERY LOSS OF PROFITS (MLOP)     

 This policy covers Loss Of Gross Profits due to Machinery Breakdown for the interruption period like Fire LOP     (FLOP) Policy on similar lines.

Applicable to

All Stationary Capital Equipment

Covers insured machinery against

Sudden & unforeseen Loss/Damage occurring to Electrical Machines

Mechanical Items both at Work or at Rest(standby/spare).

Electrical Risks

Failure of Insulation

Lack of Skill

Faulty Materials

Design, Construction or Erection, Impact, Collision,

Entry of Foreign Bodies, etc.   i.e. Elect/ Mech Breakdowns.

 

Financial protection for a Project under construction/erection is met with by insurance policies to mitigate the loss of money and time in the event of a loss. We at Zeninsure will assist in a comprehensive insurance program to cover all aspects of the Project.

 

Disclaimer:   

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products

 

 

 

 

               

 

 

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