Erection All Risk Insurance for Machinery Installation Projects

Understanding Erection All Risk Insurance

Erection All Risk (EAR) insurance is a specialized insurance coverage designed to protect machinery and equipment during installation. This insurance is particularly relevant for industries involved in large-scale projects, such as construction and engineering, where machinery installation is a critical phase. EAR insurance provides coverage against a wide range of risks that could cause damage or loss during the erection and installation process.

Note: Erection All Risk (EAR) is often confused with Contractors All Risk (CAR). To determine which coverage your project requires, ask yourself the following questions;

1. Contractors All Risk may be more suitable if your project involves more structural construction.
2. If your project involves more electrical components and installation, you may need to look at the Erection All Risk (EAR) coverage instead.
3. Another common contractual obligation is Workmen's Compensation Insurance. Remember to check if your project requires this insurance too.

This type of insurance typically covers physical loss or damage to the installed machinery, including risks such as fire, theft, natural disasters, and accidental damage. It is an essential safeguard for businesses to ensure that their investments in machinery and equipment are protected from unforeseen events that could disrupt the installation process.

Key Coverage Areas in Erection All Risk Insurance

EAR insurance policies generally cover a broad spectrum of risks that could impact machinery and equipment during installation. Some of the key coverage areas include:

Physical Damage - Includes damage caused by external factors such as fire, lightning, explosions, and natural disasters like earthquakes and floods.

Theft and Vandalism - Protection against theft and vandalism that might occur at the installation site.

Human Errors - Coverage for accidental damage caused by human errors during the installation process.

Testing and Commissioning - Many EAR policies also cover the testing and commissioning phases, ensuring that any issues encountered during these stages are also covered.

Benefits of Erection All Risk Insurance for Machinery Installation

There are several advantages to having EAR insurance for machinery installation projects:

Comprehensive Protection - EAR insurance offers extensive coverage, protecting your investment from many potential risks.

Financial Security - In the event of a covered loss, the insurance policy can help mitigate financial losses, ensuring the project can continue without severe financial strain.

Peace of Mind - Knowing that your machinery and equipment are protected allows you to focus on the successful completion of your project without constant worry about potential damages.

Contractual Compliance - Many contracts require contractors to have EAR insurance, ensuring that all parties involved are protected.

Common Exclusions in Erection All Risk Insurance Policies

While EAR insurance provides comprehensive coverage, there are certain exclusions that policyholders should be aware of:

Wear and Tear - Damage from normal wear and tear, gradual deterioration, or rust is typically not covered.

Defective Design - Losses arising from defective design, material, or workmanship are often excluded.

War and Terrorism - Damages caused by acts of war or terrorism are generally excluded from coverage.

Pre-Existing Conditions - Any damage or loss that occurred before the insurance policy was in effect is not covered.

Steps to Obtain Erection All Risk Insurance

Obtaining EAR insurance involves several steps to ensure that the coverage meets your specific needs:

Assessment of Needs - Evaluate the scope of your project and the types of machinery and equipment installed to determine the level of coverage required.

Research and Compare - Research different insurance providers and compare their EAR policies to find the one that offers the best coverage at a competitive rate.

Detailed Proposal - Prepare a detailed proposal that outlines the specifics of your project, including timelines, machinery involved, and potential risks.

Consult with Experts - Schedule A Call with one of our professional consultants or drop us a line. Cover Buddies is Malaysia's preferred commercial insurance provider, and we can provide guidance and help tailor the policy to your specific requirements.