When an existing facility is expanded and/or construction of a new facility is undertaken by the company, the risks associated with the construction can be insured under a Contractor’s All Risks Insurance. Similarly, when current machinery are moved to another location within the factory premises or to another location or if the company is installing new plant & machinery, the risks associated with the installation of such machinery can be insured under an Erection All Risks Insurance. The types of losses that could occur at construction sites and to machinery during installation are numerous, hence, these risks could be transferred to the insurers.
The policy covers, subject to certain exclusions, any unforeseen physical loss of or damage to the contract works/erection works. The insurance could be extended to cover defects liability or losses during the maintenance provisions of the contract and commissioning and testing of brand new equipment. In addition to the basic cover, third party liability to persons and property too could be included. The policy could be extended to cover Riot & Strike and, if required, Terrorism.