Erection All Risks Insurance in the UAE

Erection All Risks Insurance, commonly known as EAR Insurance, is intended for projects involving the erection, assembly or installation of machinery, plant, equipment and related structures. It generally covers eligible sudden and accidental physical loss or damage occurring during the insured erection period, subject to the issued policy wording, limits, deductibles, conditions and exclusions.

The policy may be arranged for the project principal, main contractor, subcontractors, equipment suppliers or other parties with an insurable interest. The insured parties, project activities, contract value, site and insurance period must be declared and accepted by the insurer.

What Erection All Risks Insurance May Cover

Material-damage cover may apply to eligible loss or damage involving:

1. Machinery and equipment: Plant, production lines, generators, turbines, electrical systems and other declared equipment being erected or installed.
2. Erection and installation works: Insured project works during assembly, erection and installation at the declared site.
3. Testing and commissioning: Eligible physical damage during an agreed testing or commissioning period, when expressly included in the policy.
4. Temporary works and materials: Declared items included within the insured project value.

The term “all risks” does not mean that every cause of damage is insured. Fire, theft, accidental impact, natural events, malicious acts or other causes may be covered only when they fall within the issued wording and are not excluded.

Optional Third-Party Liability Cover

Third-party liability is separate from material-damage cover. When requested, accepted and expressly included, it may cover the insured’s applicable legal liability for accidental bodily injury to third parties or accidental damage to third-party property arising from the insured erection activities.

Liability cover is subject to its own limits, deductibles, territorial scope, conditions and exclusions. Employee injuries, professional design liability, motor liability and damage to property owned, occupied or controlled by the insured may require separate insurance or specific extensions.

Who May Need EAR Insurance?

EAR Insurance may be relevant for projects involving:

1. Installation of industrial machinery or manufacturing equipment.
2. Power-generation, electrical and mechanical projects.
3. Heating, ventilation, air-conditioning and building-services installations.
4. Assembly of production lines, processing plants and storage systems.
5. Installation of lifts, escalators, cranes and specialised equipment.
6. Projects where insurance is required by a client, principal, lender or contract.

Important Policy Conditions

1. Project period: Cover normally applies only during the dates stated in the policy. Any required extension should be requested before expiry.
2. Testing and commissioning: The nature and duration of testing must be declared, especially where hot testing or operational testing is involved.
3. Contract value: The insured value should reflect the declared project value and any additional amounts specifically included in the policy.
4. Material changes: Changes to the scope, design, location, value, timeline or testing arrangements should be disclosed to the insurer.
5. Maintenance period: Limited maintenance-period cover may be available when expressly included. Its scope and duration will depend on the applicable endorsement.

Optional Extensions

Depending on the project and underwriting assessment, optional extensions may be considered for existing property, surrounding property, debris removal, escalation, inland transit, professional fees, overtime or additional customs duties. These extensions are not automatically included and may be subject to separate sub-limits, deductibles and conditions.

Common Exclusions and Limitations

EAR Insurance commonly excludes or restricts certain losses, including:

1. Wear and tear: Normal deterioration, corrosion, gradual damage or lack of maintenance.
2. Known or deliberate acts: Wilful acts, deliberate non-compliance or defects known before policy inception.
3. Consequential losses: Delay penalties, loss of market, contractual penalties or other indirect financial losses.
4. Excluded events: War, nuclear risks and other events stated as excluded in the policy.
5. Defective work or components: Faulty design, defective materials or defective workmanship may be excluded or restricted.

Depending on the policy wording, the defective item itself may be excluded while resulting accidental damage to other insured property may be treated differently. The applicable exclusion clause and endorsements should therefore be reviewed carefully.

Delay in start-up, delayed revenue and loss of gross profit are not automatically covered under a standard EAR material-damage policy. These exposures may require separate Advance Loss of Profits Insurance or Delay in Start-Up Insurance.

What to Do After an Incident

1. Take reasonable steps to protect people and prevent further damage.
2. Notify Al Buhaira Insurance as soon as reasonably possible.
3. Preserve damaged property unless it must be moved for safety reasons.
4. Keep photographs, reports, invoices and other relevant project records.
5. Do not admit liability or settle a third-party claim without approval.
6. Cooperate with requests for inspection and supporting documentation.

How to Request an EAR Insurance Quotation

Businesses can use Al Buhaira Insurance’s dedicated quotation page to submit initial project and company details. The quotation assessment may consider the project scope, location, contract value, equipment, erection activities, testing period, project duration, previous claims and requested liability limits.

A quotation does not confirm that insurance cover has started. Cover begins only after the required information has been reviewed, the terms have been accepted and the applicable policy documents have been issued.

Documents Required

The insurer may request documents and information such as:

1. Completed proposal or quotation form
2. Trade licence and company details
3. Contract or project agreement
4. Project description and scope of work
5. Contract value and bill of quantities
6. Equipment or machinery schedule
7. Site location, plans or layout
8. Project timeline
9. Testing and commissioning details
10. Contractor and subcontractor information
11. Relevant method statements
12. Previous insurance details and claims history
13. Required third-party liability limits
14. Principal, client or lender insurance requirements

Why Choose Al Buhaira Insurance?

1. Engineering insurance range: Erection All Risks Insurance is available within Al Buhaira Insurance’s engineering insurance products.
2. Dedicated quotation page: Businesses can submit their initial company and project details online.
3. Project-specific assessment: Quotations can consider the declared activities, values, project duration, testing arrangements and requested limits.
4. Policy enquiries: Customers may contact Al Buhaira Insurance regarding issued schedules, policy conditions and endorsements.
5. Claims enquiries: Policyholders can report incidents and provide relevant documents for assessment under the issued policy.

Frequently Asked Questions