AR

Why Engineering Insurance

Our Engineering Insurance offers solutions to contracting firms engaged in construction projects, government-related projects like laying of roads, building bridges, ports, tunnels, dams, desalination plants, power projects, cable laying, pipeline projects and so on.

CONTRACTORS ALL RISK (CAR)



This cover offers comprehensive and adequate protection against loss or damage in respect of the contract works, construction plant, equipment and machinery, as well as against third-party claims in respect of property damage or bodily injury arising in connection with the execution of a construction project.

A CAR policy may be concluded by the principal or by the contractors engaged in a project, including all subcontractors.

CAR insurance provides an “all risks” cover, which means every hazard is covered which is not specifically excluded. This means that almost any sudden and unforeseen loss or damage occurring during the period of insurance to the property insured on the construction site will be indemnified.

Scope of Cover

The most important causes of losses indemnifiable under CAR insurance:

  • Fire, lightning, explosion
  • Flood, inundation
  • Windstorm of any kind
  • Earthquake
  • Theft, burglary
  • Collapse
  • Bad workmanship, lack of skill, negligence, malicious acts or human error

The cover attaches as from the commencement of work, or after the items entered in the schedule of the policy have been unloaded at the site, and terminates when the completed structure or any completed part thereof is taken over or put into service. In addition, it is possible to extend the period of cover to include a maintenance period.

Maintenance Visits Cover

The insurer’s liability during the maintenance period is limited to loss or damage caused by the insured in the course of the operations carried out for the purpose of complying with the obligations under the maintenance provisions of the contract.

Extended Maintenance Cover

In addition to the protection provided under the maintenance visits cover, this type of cover also includes loss or damage occurring during the maintenance period but caused during the construction period on the construction site.

ERECTION ALL RISKS (EAR)



This policy offers comprehensive and adequate protection against all the risks involved in the erection of machinery, plant and steel structures of any kind, as well as third-party claims in respect of property damage or bodily injury arising in connection with the execution of an erection project.

Scope of Cover

This policy offers comprehensive and adequate protection against all the risks involved in the erection of machinery, plant and steel structures of any kind, as well as third-party claims in respect of property damage or bodily injury arising in connection with the execution of an erection project. Maintenance Visits Cover The insurer’s liability during the maintenance period is limited to loss or damage caused by the insured in the course of the operations carried out for the purpose of complying with the obligations under the maintenance provisions of the contract.

Extended Maintenance Cover

In addition to the protection provided under the maintenance visits cover, this cover includes loss or damage occurring during the maintenance period but caused during the erection period on the construction site:

  • The manufacturer or supplier of machinery or plant if he carries out the erection work or is responsible for it, or
  • The firm commissioned with erection work

EAR insurance provides very wide cover. Almost any sudden and unforeseen loss or damage occurring to the property insured on the erection site during the period of insurance will be indemnified. The insurer will indemnify loss or damage due to the following causes:

  • Fire, lightning, explosion
  • Flood, inundation
  • Windstorm of any
  • Earthquake
  • Theft, burglary
  • Faults in erection
  • Negligence, lack of skill, lack of experience, malicious acts
  • Short-circuit, arcing, excess voltage
  • Excess pressure or vacuum, tearing apart on account of centrifugal force
  • Any other sudden and unforeseen event such as loss or damage due to collapse, foreign objects, on-site, transport of items to be erected, etc.

In addition, it is possible to extend the period of cover to include a maintenance period.

Maintenance Guarantee Cover

If the insured is the manufacturer of the machinery or plant to be insured and has also been commissioned with the erection work, the manufacturer’s liability for loss or damage during the guarantee period, as stipulated in the supply contract, can be included in the insurance to a certain extent in addition to the abovementioned covers.

MACHINERY BREAKDOWN (MBD)



MBD provides effective insurance cover for plant, machinery and mechanical equipment at work, at rest or during maintenance operations. It covers unforeseen and sudden physical loss of or damage to the insured items, necessitating their repair or replacement. MBD insurance supplements the coverage afforded by fire insurance.

Scope of Cover

Loss or damage covered under MBD insurance is mainly due to one of the following causes:

  • Defects in casting and material
  • Faulty design
  • Faults at workshop or in erection
  • Bad workmanship, lack of skill, carelessness
  • Shortage of water in boilers
  • Physical explosion
  • Tearing apart on account of centrifugal force
  • Electrical causes such as short circuit

The sum insured should always be equal to the costs of replacement of the insured machinery by new machinery of the same kind at the same place (value of the new item plus customs duties plus transportation and installation charges).

BOILER AND PRESSURE VESSEL (BPV)



Scope of Cover

This product offers effective insurance cover by which the Insured shall be indemnified against:

  • Damage (other than fire) to any boiler or pressure vessel.
  • Liability of the Insured at law on account of fatal or non-fatal injuries to any persons other than the Insured's own employees or workmen or members of the Insured's family.
  • Caused by the explosion or collapse of any boiler or pressure vessel whilst in the course of ordinary working.
  • Liability of the Insured at law for damage to property not belonging to the Insured.

CONTRACTOR’S PLANT AND MACHINERY (CPM)



This is an insurance of contractors’ plant and machinery that is done on an annual basis. It covers unforeseen and sudden physical loss of or damage to the insured items, necessitating their repair or replacement. The cover, which excludes internal breakdown, applies at work, at rest or during maintenance operations and is not limited to a specific construction site.

Scope of Cover

This is an insurance of contractors’ plant and machinery that is done on an annual basis. It covers unforeseen and sudden physical loss of or damage to the insured items, necessitating their repair or replacement. The cover, which excludes internal breakdown, applies at work, at rest or during maintenance operations and is not limited to a specific construction site.

The sum insured should always be equal to the costs of replacement of the insured machinery by new machinery of the same kind at the same place (value of the new item plus customs duties plus transportation).

ELECTRONIC EQUIPMENT INSURANCE (EE)



The term “Electronic Equipment” comprises, in the context of this insurance, all electrical and electronic systems such as: Electronic data processing (EDP) equipment, Electrical equipment for medical use, Communication facilities, Lighting and navigation facilities, Equipment for research and materials testing.

Scope of Cover

Material Damage Cover

Electronic equipment insurance is an ”Accident” insurance on an all risks basis covering sudden and unforeseen losses, which physically affect the subject matter insured. Losses due to the following causes give rise to the vast majority of all claims:

  • Fire, lightning, explosion, failing aircraft
  • Smoke, soot, corrosive gases
  • Water and humidity
  • Failure of air conditioning
  • Short circuit and other electrical causes
  • Design, manufacturing, assembly and erection faults, defects in casting and material, workshop errors, bad workmanship
  • Faulty operation, lack of skill, gross negligence
  • Malicious acts of workmen, employees, third parties
  • Burglary
  • Hail, frost

The sum insured must always be the replacement value of the insured electronic equipment (value of the new item plus customs duties, transportation and installation charges).

External Data Media Cover

Cover is provided on a first-loss basis both for the material value of the external data media used in computing facilities and for the costs of reprocessing and restoring lost information.

Increased Cost Of Working Cover

If, in the event of a breakdown, the required computing capacity is hired, then the increased cost of working insurance applies. It covers such expenses as hire charges, transport charges for data media and personnel, expenses for accommodation away from base, night work or work on public holidays etc.

Comprehensive Machinery (CMI)



Comprehensive machinery insurance offers wide and comprehensive protection against property damage and loss of profits for an entire plant and machinery in operation including other property like buildings, stock, goods in process, etc. This new policy is designed to grant cover for entire plants where engineering risks are prevailing, in contrast to industrial all risks covers where the fire exposure and extended perils are of more importance.

CMI is an all risks accident and loss of profits insurance covering any unforeseen and sudden physical loss or damage to the insured plant, necessitating its repair or replacement.

Scope of Cover

Loss or damage covered under Section I of this insurance includes the classical scope of cover under the machinery insurance and extended further to grant protection for plant and machinery mainly against:

  • Fire, lightning, chemical explosion
  • Earthquake, inundation, flood
  • Any other cause not specifically excluded

The sum insured should always represent the new replacement value of the property insured.

Section II of CMI comprises the business interruption cover, which provides protection against loss of gross profit and increased cost of working in case the business is interrupted or interfered with as a consequence of loss or damage indemnifiable under Section I.

DETERIORATION OF STOCK (DOS)



The insurance of “deterioration of stock in cold storage” is designed to meet the requirements of those who want to insure themselves against deterioration of goods in cold storage due to a breakdown of refrigerating machinery. Deterioration of stock insurance is a complementary cover to machinery insurance and may only be taken out in connection with the latter.

Scope of Cover

There are basically two different methods of preservation: cold storage under freezing conditions and cold storage under cooling conditions. In the case of cold storage under cooling conditions, a distinction must be made between two types of cold storage: storage in a normal atmosphere and storage in a controlled atmosphere (CA storage). The storage atmosphere in CA storage rooms is different to that of normal atmospheric air and contains approximately 22% carbon dioxide, 4% oxygen and 74% nitrogen. The insurance of stock in cold storage is important, for example, for:

  • Owners of cold-storage houses
  • Users (tenants) of cold-storage houses
  • Frms in which agricultural products are manufactured or processed
  • Meat and fish processing industries
  • Food preservation industry
  • Chemical and pharmaceutical industries (finished and semi-finished products)

Causes of an indemnifiable claim for deterioration of stock may be:

  • A rise or fall in cooling temperature
  • The unforeseen and sudden escape of refrigerants into the cold-storage rooms
  • In the case of CA storage, an incorrect composition of the storage atmosphere directly resulting from any material damage to the refrigeration plant, which is indemnifiable under machinery insurance

It is possible to extend the deterioration of stock cover to include deterioration due to the failure of the public power supply, provided the position regarding public and back-up power supplies is found to be satisfactory.

MACHINERY LOSS OF PROFITS (MLOP)



MLOP insurance indemnifies the actual loss of gross profit sustained as a result of a business interruption caused by an accident covered under machinery insurance.

Scope of Cover

MLOP insurance compensates for:

  • The continuing business expenses (standing charges) including the salaries and wages paid to employees
  • The net profit
  • The increase in cost of working, i.e. the additional expenditure necessarily and reasonably incurred for avoiding or diminishing a reduction in turnover

The sum insured is, for normal cases, the gross profit obtained from the turnover of goods produced or handled in the course of the insured’s business for a period of twelve successive calendar months (i.e. normally for the business year). Increase in costs of working may also be covered under MLOP insurance, for instance the additional expenditure incurred for the use of external power if the insured’s own power supply breaks down (additional cost of consumption of kilowatt hours and maximum demand charges for kilowatts in excess of normal requirements).

The period during which the insurance will make good losses is defined as the indemnity period. This period – normally 3 to 12 months – is determined by the insured depending upon the replacement period for the machinery to be insured.

MLOP insurance is of special interest for all “bottleneck” equipment used in the field of power generation, such as boilers, steam turbines, generators, transformers, and for important process machinery such as paper machines, printing machines, presses, rolling mill equipment, refiners, crushers, compressors, pumps, etc., including their drives.