ENGINEERING

INSURANCE
 Engineering Insurance
Engineering insurance is a type of insurance policy wherein a wide
range of risks related to engineering are covered. It is a
comprehensive insurance policy that offers economic safeguard
against risks faced by ongoing construction projects, installation
projects, and machines and equipment in project operation.

Since this industry is about creating and designing, construction

and building, there are increased chances of related accidents and
perils. Thus, Engineering Insurance policy caters to different forms
of uncertainties that are associated with on-site construction
including plant and machinery usage.
1) Contractor’s All Risk (CAR)
The Contractor’s All Risk policy offers comprehensive cover by covering risks which may
arise during construction period. It offers covers for public liability, own plant, contract
works, hired-in plant and employee’s tools and gives financial protection to the civil
engineering contracts in the event of any accident.

Benefits
a) Material Damage:
Under this loss, damage, or destruction of property incurred due to any cause other
than those excluded in policy are covered.

b) Third-Party Liability coverage:

• Legal liability related to accidental damage or loss caused to the property of third-
person

• Legal liability for non-fatal and fatal injuries caused to third-person (other than the own
employees or workers of the insured) due to the construction of the property.
Coverage
Perils that are covered under contractors all-risk policy are:
Fire and allied perils
Collapse
Earthquake, shock, and fire
Faults in construction
Storm, flood, cyclone, and tempest.
Negligence and human errors
Water damage

Exclusions
The following perils are not covered:
War and nuclear perils
Normal wear and tear, gradual deterioration etc.
Damage due to faulty design, defective materials, bad workmanship, etc.
Consequential loss like loss of revenue, penalty for delay etc.
Inventory losses 
Wilful negligence
loss of or damage to vehicles licensed for general road use or waterborne vessels
loss of or damage to files, drawings, accounts, bills, currency, stamps, deeds, evidence of
debt, notes, securities cheques, packing materials such as cases, boxes, crates
 2) Erection All Risk (EAR)
The erection all risk insurance covers loss or damage to projects
that involves erection/installation of plant, machinery and
equipment ranging from erection of a single machine to a large
power plant. It protects a contractor or employer against physical
loss or damage to the contract works, construction plant and
equipment or machinery. It also includes cover for damage to
property of third parties and bodily injury to third parties.
 SCOPE
It offers a comprehensive cover against all the risk involved in the
•Storage
•Erection
•Testing and Commissioning
of machinery  & plant pertaining to various Industries. 
 Coverage
EAR cover begins from the time of unloading of the first
consignment at the project site and terminates on completion of
testing or handing over of the project to the principal employer, or
the period chosen, whichever is earlier.

The following are the eventualities against which you are covered:
•Fire, lightning, explosion, aircraft damage
•Riot, strike, malicious act
•Flood, inundation, storm, cyclone and allied perils
•Landslide, subsidence and rockslide
•Burglary and theft
•Faults in erection
 Exclusions
The following eventualities are not covered:

•War Invasion Riot Strike Civil Commotion etc

•Nuclear Reaction Nuclear Radiation or Radioactive  Contamination

•Insured’s Contribution – Deductible

•Wilful Act or Wilful Negligence of the Insured

•Cessation of Work

•Defective Material or Bad workmanship

•Wear Tear Corrosion Oxidation Deterioration

3) Contractor’s Plant and Machinery (CPM)
The policy broadly covers loss or damage to the contractor’s following mobile equipment
against an accident arising out of external perils:

Scope
Road Rollers
Concrete mixer, concrete pumps
Pavers for asphalt or concrete finishing
Cranes, Lifting equipment and drilling equipment Road surfacing equipment
Vibrators
Chain blocks, pulley blocks
Site power-generating plant
Mobile mixing plant
Hauling equipment
Excavators and loaders
Earthmoving equipment: Bulldozer, grader, scraper, excavator, loader, dumper, etc
Batching plant for the production of concrete of asphalt
Coverage
The following eventualities are covered:
Fire and Lightning.
Accidental damage like defective workmanship and material, lack of skill, Negligence,
Malicious act or Human error.     
Water damage, Flood, Storm, Tempest, Inundation.      
Collapse, Collision, Impact. 
Theft & Burglary.
Subsidence, landslide, Rockslide.

Exclusions
Loss or damage due to the following eventualities are not covered:
War or Warlike operations, Civil Commotion etc.
Wilful act or Negligence of the Insured or of his representative
Nuclear reaction, Nuclear radiation or Radioactive contamination
Loss discovered only at the time of taking an inventory
Normal wear and tear, Gradual deterioration due to atmospheric conditions or lack
Faulty design
4)Machinery Breakdown
Machinery breakdown insurance provides a protection cover to the machines used by
factories and industries. This insurance covers accidental breakdown and physical damage of
the machinery and the cost of repairs or replacement of the damaged machine part.

Scope of Machinery
Mechanical: All types of Mechanical industrial plant like compressors, pumps, turbine
engines, turbines (steam, water & gas), blowers, machine tools, presses and refrigerators etc.

Electrical: All types of electrical machines like a transformer, electrical motor, alternators &
generators, motors, rectifiers and switchgear etc.

Process machines: All types of Process machines in such industries as cold storage,
engineering and metallurgical, paper/ pulp making, printing, rubber/ plastics and textiles

Stationary: All Stationary equipment can be covered

The protection is offered for machines both in working and in rest condition. Some other
conditions are when dismantled or moved or re-assembled for cleaning, inspection or repair.
Coverage
Machinery breakdown due to short-circuits, excess voltage, and electrical faulty design,
faulty material, and faulty casting that manifest after the warranty period due to electrical
and mechanical breakdowns

Abnormal operating conditions of the machine

Falling, impact and collision resulting in breakdowns

Carelessness and lack of operating skills in the operations and management of machinery

Turbines bursting, compressors, hydraulic cylinders or other apparatus which is subjected

to centrifugal force or internal pressure

Damage or loss due to initiation of fire from within the machinery is also included which is
generally excluded from the standard fire protection policy
Exclusions
There are two types of exclusions in this policy:

General Exclusions: This includes war, civil war, riots and strikes

Special Exclusions include the following:

Fire and allied perils, theft, etc.

Loss or damage as a result of to overload experiments

Gradual development of abnormalities, defects, cracks etc. in any part being ignored
regularly in spite of knowing it demands repair

Regular wear and tear of the machinery

Loss of use of the machinery due to conditions in the plant or factory or any other kind of
consequential loss incurred by the insured

Loss or damage because of explosions in chemical recovery boilers

Damage to belts, chains, ropes, rubber tyres or any other exchangeable tools unless any
loss or damage to the machinery is indemnifiable
5) Boiler and Pressure Plant (BPP) Machinery
Boilers and Pressure vessels are critical to the manufacturing process. Even a small damage
can cause these to explode or collapse. The impact from such events could assume
catastrophic proportions, both in terms of the lives that it can affect and the financial losses
that it can cause. This policy covers physical loss or damage to boilers and/or other pressure
plants where steam is being generated.

Coverage
This policy covers boiler & pressure vessels owned by you and located at your premises
against explosion, implosion and collapse leading to:

Damage to the boilers & pressure vessels

Damage to surrounding property, up to fixed limits, arising due to explosion & collapse of the
pressure plant during the normal course of work

Third-party legal liability, up to set limits, arising due to:

Death or bodily injury to third parties
Damage to property of third parties (not held in trust or on commission) caused by and
solely due to explosion or collapse occurring during ordinary working
Exclusions
Fire and related perils

War and nuclear perils

Overload experiments / tests imposing abnormal conditions

Gradually developing defects not requiring stoppage

Normal wear and tear, corrosion not leading to explosion / collapse.

Willful act / negligence

Loss for which the manufacturer is responsible

Pre-existing defects & faults

Consequential losses
6) Electronic Equipment Insurance
Mediclaim Policy provides cover for healthcare expenses incurred by insured in a
hospital due to a medical emergency, such as illness or accidents. This policy provides
coverage to individuals and their covered family members against expenses such as hospital
room/ICU charges, diagnostic charges, medicine and other medical expenses.

Benefits
Extensive coverage under three sections – Equipments, External Data Media and Increased
cost of Working Capital

Covers both partial and total loss due to material damage of equipment

Expenses incurred on restoration of data covered

Business continuity ensured by cover for additional costs of continued data processing
Coverage

The policy provides coverage against unforeseen and sudden physical loss or damage to the
electronic equipment and data media that occurs owing to perils other than those
specifically excluded. Three sections are providing the desired coverage:

Section 1: Equipments
Covers any unforeseen and sudden physical loss or damage to electronic equipments.

Section 2: External Data Media

Expenses incurred within 12 months from the date of occurrence of loss, necessary for
restoring the insured data media to pre-accident condition will be covered.

Section 3: Increased Cost of Working

Covers all additional costs incurred to ensure continued data processing on substitute
equipment
Exclusions
Pre-existing faults or defects, normal wear and tear, erosion, corrosion, etc.

Maintenance cost of the insured items

Loss or damage to objects made of glass, porcelain or ceramics, sieves or any operating
media

Aesthetic defects such as scratches on painted or enameled surfaces

Costs arising from false programming, punching, labeling or inserting, inadvertent

cancelling of information or discarding of data media, and from loss of information caused
by magnetic fields

Costs for replacement of data media, data and regeneration of data.

Loss or damage due to:

Willful act or negligence
Partial or total cessation of work
Loss or damage to the property falling under the terms of the maintenance agreement
Loss, destruction, or damage directly occasioned by pressure wave caused by aircraft
and other aerial devices.