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Project Insurance

Insured Parties

Principal Employer

Manufacturer

Contractor Sub-contractor& Insurer

Any one or more of the following

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Basic concept

Comprehensive cover against all the risk

involved in the

Storage

Erection

Testing and

Commissioning

of machinery & plant pertaining to various

Industries

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CoverSudden and unforeseen loss or damage due to

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

Human errors, negligence, lack of skill

Short circuiting, arcing, excess voltage

Collapse, damage due to foreign objects, impact damages

Earthquake (optional)

Terrorism (optional)

Any other sudden, unforeseen damages not explicitly

excluded

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Interest

Joint interest:

The policy can be taken jointly by the owner / principal

covering the interests of all other parties

Interest of Financial institution:

Insured must specify clearly if interest of Financial Institution

or Bank is required to be covered

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Period of cover

Erection period according to the contract

requirement

Testing period - Normally 1 month but maybe more than a month

depending on actual

requirement

Maintenance periodbegins from the day testing

of the plant is declared

completed upto the period

based on requirement

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Insured Period

Taken into use

Works Testing Maintenance

EAR Operational

Commencement

of Works

Provisional Acceptance

Certificate

Final Acceptance

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Sum insured

Completely erected value of the property

inclusive of

Freights

Customs duty

Erection cost

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Exclusion

Types:

General Market Exclusions

Trade Risks

Risks more exactly the Subject matter

of Other Insurance

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General Market Exclusions War Invasion Riot Strike Civil Commotion etc

Nuclear Reaction Nuclear Radiation or Radioactive

Contamination

Insureds Contribution Deductible

Wilful Act or Wilful Negligence of the Insured

Cessation of Work

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Trade risk

Defective Material or Bad workmanship

Wear Tear Corrosion Oxidation Deterioration

Normal Maintenance or Making Good

Disappearance or Shortage (Inventory Losses)

Risks more exactly the Subject matter of Other Insurance

Design Defects

Loss of files, drawings, cash, cheques etc,.

Consequential Loss

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Add-on covers

Third party liability

Cross liability

Cost of removal of debris,

Express freight,overtime charges,

Air freight,

Custom duty

Escalation

Owners surrounding property

Storage risk at Fabricators Premises

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Project Insurance

IMPORTANT ADD-ONS:

Third-party exposure to nearbystructures by excavation and

foundation work and to traffic

Third Party Liability

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Project Insurance

Add-on covers

The cost of debris removalfollowing an accident to the

Extent that it is necessary

Before repairs may be put

In hand

Removal of Debris

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Project Insurance

Add-on covers

The integration of an oldhotel into the new project

represented a high exposure

of the Principals existing property

Surrounding Property

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Project Insurance

For early completion of the project:

Refund of Premium

Subject to :

Period of insurance >= 18 months

Notice for early completion in advance

Claim experience < 60%

Policy period not exceeding the contract period

Minimum period for refund 3 months

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Project Insurance

Elimination & minimisation of risks

Risk Management

First Step:

To identify the risk

Evaluate risks inherent of the contract

Second Step:

Implement a loss prevention and

safety programme to minimise these

Inherent risks

Third Step:

The risk would be assigned to various

parties involved by contractual

agreement

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Erection All Risk

Physical Hazards

Pre-erection and storage:

Fire

Theft

Water Damage

AOG Perils

Material Handling Equipments

Improper Storage

Acts of god

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Physical Hazards

Construction & erection:

Working at Heights

Heavy Lifts

Handling of Over Dimensioned Items & Electrical

Equipments

Civil Construction Requirements

Fire & AOG Perils Theft

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Physical Hazards

Testing & commissioning:

Failure of Controls & Safety Device

Chemical Leakages

Controls & Instrument Failure

Failure of Material under Pressure

Human Error & Negligence

MBD & Explosion.

Mfging. Faults

ErectionErrors

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Claim procedure

Designated Surveyors

Contact Details of Surveyors

Surveyors response within 24 hours

Interim report

Final report

Settlement based on the survey report

Risk Engineers assistance as and when

required

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Basis of settlement

Partial loss:

The cost of repairs necessary to restore the items to their

condition immediately before the occurrence of the damage

less salvage, OR

Total loss:

The actual value of the items immediately before the

occurrence of the loss less salvage;

However, only to the extent the costs claimed has to be borne

by the Insured and to the extent they are included in the

Sum Insured