CONTRACTOR'S ALL RISKS INSURANCE

Overview
Contractor's All Risks policy protects the interest of civil contractors and firms involved in construction activity against the damage or destruction of various civil engineering projects undertaken by them. 
Contractor's All Risks Insurance is a comprehensive insurance cover to protect the contingencies during the construction phase of civil structures. This is designed by Tariff advisory Committee of India under the direct control of IRDA.

This policy provides Insurance protection with a variety of extensions to meet the needs of the principal and the lender. Policy can be extended to cover air freight, additional customs duty, express freight, over time wages, expenses for clearance an removal of debris, damage to surrounding property, third party liability, escalation in costs, contractor's plant and machinery at the construction site, defects in construction which surface during maintenance period for which the contractor is liable under the terms of agreement with the principal.

The efforts taken from the planning stage of the project to the end go in vain if unprotected. No lender to the project takes a risk of losing his money without this insurance.

Who can insure?
Principal and the contractors as joint insured who carry out the construction and maintenance operation of structures like Buildings, Airport works, Underground risks, Pipeline construction, Tunneling, Hydroelectric, Roads, Reservoirs, Bridges, Offshore structures, Wet risks etc.

When does the cover apply?
From the time of the construction starts to the time the commercial activity starts or to the period of insurance which ever is earlier.

ERECTION ALL RISK INSURANCE

Overview
Erection All Risk is a comprehensive insurance policy designed to cover all sorts of contingencies arising right from the moment the materials are unloaded at the project site and continues during the entire project period until the project is tested, commissioned and handed over. 
Erection All Risks Insurance is also known as Storage cum Erection Insurance or Erection Insurance. 

It offers a comprehensive insurance cover from the time the machinery is delivered at the site, stored, erected, commissioned and tested. This is designed by Tariff advisory Committee of India under the direct control of Insurance Regulatory and Development Authority.

Who can insure?

• Manufacturers or suppliers of machinery or plant carrying out erection work under a turnkey project.

• Contract firms commissioned for specific erection jobs. 

• The buyer of the machinery or plant to be erected.
  

What is covered?
The risks involved in storage, assembly, erection, testing of all kinds of machinery. Individual machines can also be insured for storage, erection and testing. Civil engineering works can be included. The scope of the policy is comprehensive in nature.

When does the coverage apply?
The liability of the insurer commences from time after unloading of the property from any conveyance at the site and continues till the test loading is concluded, trial running is made and readiness for work is declared.

ADVANCE LOSS OF PROFITS INSURANCE

Overview
This policy covers monetary losses arising out of delayed commissioning of the project as a result of a loss during construction/erection, which is covered under a project insurance policy (Marine Cum Erection / Erection All Risks / Contractors All Risks). 

The policy is operational during the whole or part of the preparatory period of a new venture or project. In case of any accident or damage during this period which delays commencement of trading beyond the starting date, this policy covers loss of trading income, loan interest and other charges which are payable despite lack of income and increase in expenses incurred in reducing or avoiding the delay in startup. 

The indemnity period shall be the duration between the dates of actual commencement of insured's business and the date of scheduled commencement had there not been a delay. 

What is covered?

1. The policy offers cover against loss of anticipated earnings/profits due to the delay in commissioning of the project following a loss covered under the project insurance policies.

2. The costs covered are:
   · Loss of gross profits - based on anticipated sales, cost and     prices.
   · Loss of gross earnings- sales value of production less consumed stock supplies and services purchased.
   · Increased cost of working - costs involved in minimizing the effects of the delay.
   · Principal and interests - lending institutions' interest in the portion of gross profit.
   · Loss of rent - as a result of premises not being ready to earn rent.
   · Special expenses - costs involved because of delay such as advertisement campaign etc.
   

Who can insure?
The policy is suitable for: 

1. The principal who shall be deprived of the anticipated earnings in the event of delay in commencement of operations and

2. The financial institutions to the extent of their interest in the project.