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Engineering insurance refers to the insurance that provides economic safeguard to the risks faced by the ongoing construction project, installation project, and machines and equipment in project operation.

Currently, engineering insurance provides comprehensive coverage that provides protection against risk associated with construction / erection of project, plant machinery during operation. It is classified into two broad groups- Construction Phase and Operational phase.

Construction Phase policies are issued for the period of project - Contractor’s All Risk (CAR) Insurance / Erection All Risk (EAR) Insurance Operational Insurance are annual policies renewable at expiry – Machinery Breakdown Insurance, Boiler and Pressure Plant Insurance, Contractor’s Plant and Machinery (CPM) Insurance etc.


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.

  1. Material Damage:
    Under this loss, damage, or destruction of property incurred due to any cause other than those excluded in policy are covered. Most of the policies pay for the losses or damage up to a certain amount that does not exceed the sum mentioned against every item and does not exceed the total sum insured.
  2. Third-Party Liability coverages:
    1. Legal liability related to accidental damage or loss caused to the property of third-person
    2. 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
Fire and allied perils.
Earthquake, shock, and fire
Faults in construction
Storm, flood, cyclone, and tempest
Negligence and human errors
Water damage
War and nuclear perils
Wear & tear, gradual deterioration
Damage due to faulty design, defective materials, bad workmanship
Consequential loss
Inventory losses
Wilful negligence
Damage to road/water vehicles
Damage to documents
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This is just an indicative list, kindly refer policy wordings for detailed information.

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