Engineering Insurance

1. By
Achala Suryawanshi
ENGINEERING INSURANCE

2. PROJECT POLICIES
 CONTRACTORS’ ALL RISK—CIVIL
CONSTRUCTION.
 STORAGE CUM ERECTION/EAR----PLANT
& MACHINERY
 ALOP

3. CONTRACTORS ALL RISK POLICY
It protects the interest of ,
i. Principal ii. Contractors iii. Sub contractors
Policy Period : Provides comprehensive cover for
civil projects.
From time of arrival of first consignment of material
till project is complete and further during maintenance
period.
 Sum Insured :
Completely errected value of project including,
Material Cost, Wages, Supervision, freight, custom
duty, items supplied by Principal etc.

4. CONTRACTORS ALL RISK
Policy exclusions :
1. War and war like perils.
2. Willfull act or willful negligence of Ins
his representative.
3. Cession of work.

5. CONTRACTORS ALL RISK POLICY
SECTION I : Material Damage
It covers any unforseen loss occuring during period
of Insurance to the material unless falls under
exclusions.
Normally the losses are due to, Fire and allied perils,
lack of skill, negligence, malicious damage, human
error, AOG, Collapse/collision/impact, Theft &
 burglary.

6.  CONTRACTORS ALL RISK POLICY
 Exclusions for Section I
 1. Excess
 2. Losses dected during inventory.
 3. Wear and tear.
 4. faulty design.
 5. Cost of replacement of defective material and
Workmanship, however the consequential physical
losses are covered.

7.  CONTRACTORS ALL RISK POLICY
 Exclusions for Section I
 6. Cost of rectification of error unless resulting in
 physical loss.
 7. Loss of or damage to files, drawings, accounts,
bills etc.
 8. Packing material.
 9. Consequential losses.
 10. Loss to vehicals of contractors unless to the
 extent covered under CPM

8. CONTRACTORS ALL RISK POLICY
SECTION II : Third party liability
It covers any unforseen loss occuring during period
of Insurance towards legal liability for property as
well as injury.
Sum Insured : to be selected by Insured
Period : Policy Period.
Exclusions :
i. Excess
ii. Expenditure incurred in doing/replacing/repairing
under Section I.
iii. Liability consequent upon bodily injury of employees or
Or members of their family.
iv. Property belonging to Insured or held in trust or his
empoloyees.

9. Add On Cover
under CAR/EAR

10. Owner Surrounding Property Yes Yes
Above 100 Crs Below 100 Crs
50/50 Clause Yes No
72 Hrs Clause Yes No
Automatic Reinstatement Yes No
Loss Minimisation Expenses Yes No
Debris Removal Yes Yes
Professional Fees Yes Yes
Cover for Offsite Storage/Fab. Yes Yes
TPL Cover /During Maintenance Yes Yes
CPM Yes Yes
Escalation Costs Yes Yes

11. Additional Custom Duty Yes Yes
Above 100 Crs Below 100 Crs
Expeding Cost Yes Yes
Ex. Maintenance Cover Yes Yes
Continuity of Cover during Yes No
Operational Phase
Design Defect Cover Yes Yes
Cover for Valuable Documents Yes No
Waiver for Contribution Yes No
Waiver of Subrogation Yes No
Dismantling Risk for Yes No
Second hand equipments
Terrorism Yes Yes

12. OPERATIONAL POLICIES
 1)MACHINERY INSURANCE
 2)CPM INSURANCE
 3)ELECTRONIC EQUIPMENT INSURANCE
 4) BOILER AND PRESSURE PLANT
INSURANCE
 5) CECR
 6) MLOP

13. Salient Features of MB/MI
 Policy can be taken by owener or hirer.
 Any electrical (non electronic) and Mechanical Equipment can be
covered under MB.
 Sum Insured : New Replacement value.
 It covers sudden unforseen damage to machinery by any cause
such as electrical breakdown, mechanical breakdown and
accidental damage by extraneous causes, except exclusions.
a. While at work
b. whilst being dismantled
c. during cleaning/overoiling.
d. whilst being shifted in premises.
e. during subsequent errection.
 Condition of underinsurance and reinstatement of S. I. Applicable.
Loss settlement : Total Loss – Market Value Basis.
Partial Loss – Reinstatement value basis.
 Projects located outside India would be outside the jurisdiction
.

14. Salient Features of MB
 No policy to be issued on first loss basis.
 Projects located outside India would be outside the jurisdiction
of the Committee.
 Before rating, it is necessary to collect full nameplate details of the
machine i.e. HP/KW/RPM, manufacturer’s name, type,
year of manufacture, Serial Number and such other identification
details.
 Machines, which are under erection or testing and
commissioning, should be insured only after successful
commissioning.
 Machinery Breakdown Insurance Policy cannot be issued
on agreed value basis.

15. Salient Features of MB
 Gear Boxes should not be insured in isolation but should be
insured either with the ‘drives’ or the driven equipment.
 Parts of machines should not be insured separately; their valu
should be included in the total value of the machine to which
are related.
 For All Electrical and Mechanical equipments having
standby, 50 % discount on Tariff rate is applicable.
 In respect of Turbo Generator Set, following break up would be
acceptable – Turbine, Alternator , Gear Box, Control Panel, Cable
No further break up would be acceptable.

16. Salient Features of CPM
RISK NOT COVERED
Loss/damage to replaceable parts -
Drills, Knives, Cutting Edges Blades,
Dies, Moulds, Ropes, Belts, Chains,
Tyres, Cables & Wires, Flexible Pipes,
Joining & Packing Materials

17. Salient Features of EEI
 EEI can be granted on floater basis anywhere in India sub.
- Floater to named location only
- EEI policy shall not be extended to cover transit risks.
 Cover of terrorism available as per prevaling scales.
No discount on STFI & EQ.
 No discount on STFI & EQ
SCOPE OF COVER,
SECTION I HARDWARE.
SECTION II EXTERNAL DATA MEDIA.
SECTION III INCREASEED COST OF WORKING.

18. THANK YOU