Erection All Risk Insurance

Sites for the erection of Machinery such as Electricity Generators, Water treatment plants, Desalination plants, Elevators and others are very busy throughout the erection period, and while the engineers, Foreman, and site supervisors are trying their best to ensure safety, minor or major accidents could occur. If these sites are not adequately insured, these accidents would result in devastating losses to contractors or to their principals.

The “National Takaful Insurance Company” erection all risks policy which is in 2 sections, provides coverage as follows:

Section 1 (Material Damage): This section provides coverage to the contributors against unforeseen accidental risk or damages to the contributors against unforeseen accidental loss or damage to the Erection works arising out of any causes which is not specifically Excluded by the policy wording.

A brief description of the Perils covered are as follows:

  • Accidental Damage during construction.
  • Fire and lightening.
  • Water damage, flood, storm and tempest.
  • Collapse, collision, impact, burglary, theft and malicious damage, aircraft.
  • Breakdown or explosion to any part of the contract such as lifts in buildings.
  • Consequent damages due to defects in material casting, workmanship and design.
  • Riot, Strike, subsidence, landslide, cyclone, hurricane, earthquake, volcano.

Section 2 (Third Party Liability): This section of the policy, with agreed limits, provides indemnity to third party due to the Legal liability of the contributor resulting from his negligence or his employees/family members causing:

  • Accidental bodily injury &/or death to third parties (not members of the contributor’s family or one of his employees).
  • Accidental damage to third party property (excluding property belonging to or in the custody or under control of the contributor, his family members or his employees).
  • In addition it also provides the legal expenses for defending any proceedings with insurer’s consent.

Maintenance Period Risks:

Once the erection works, including testing and commissioning, covered under erection all risks policy is completed, the maintenance cover comes to effect automatically. During this period, the cover is against any loss &/or damage that occurs in the course of the compliance with the maintenance obligation under the contract “insured” provided the cause of such loss or damage originated during the period of insurance.