A civil engineering contract usually involves three parties:

• The principal
• The consultants, architects, engineers, etc.
• The contractors

Only the principal and the contractor(s) can be covered under a CAR policy.

This policy can cover projects such as:

• Residential and office buildings, hospitals, schools and theatres
• Factories and power plants
• Roads, railway facilities and airports
• Bridges, dams, tunnels, water supply, drainage systems, canals and harbors.
• Assembling of prefabricated elements or machines manufactured in factories (off-site) and assembled onsite. However, the contractor is only responsible for his own activity, i.e. assembly and testing excluding operating.
• Testing on steel machinery.

In whatever project you wish to invest in, this policy covers:

• Contract works: This applies to all operations that will be carried out by the contractor and his/her subcontractors. These include any permanent or temporary structures on site.
• Construction plant and equipment: This includes workers’ accommodation, storage sheds, utilities, etc.
• Construction machinery: These include cranes, earth moving equipment, bull dozers, etc.
• Costs of clearance of debris: This includes removal of debris off the site in the event of a loss.
• Third party liability: This implies to legal liability arising from property damage or bodily harm suffered by third parties.
• Surrounding property: This refers to property on site other than property owned by third-party.

• Losses resulting from Fire, lightning, explosion, extinguishing  water or other firefighting measures.
• Flood, inundation, rain, snow, avalanche, tsunami
• Windstorm of any kind
• Earthquake, subsidence, landslide, rockslide
• Burglary
• Lack of skill, negligence, malicious acts or human error.

• War and War like risks.
• Nuclear Risks.
• Gross negligence of Insured.
• Cessation of work, total or partial.
• Deductible applicable.
• Consequential losses
• Faulty design
• Defective material and or workmanship
• Wear and tear, etc.
• Files, drawings, etc.
• Losses discovered at time of taking inventory
• Vehicles licensed for general road use

The policy covers you as long as the project will last. Any extensions are at an additional premium.

How can I calculate the sum that will be insured?

It’s mainly divided into two sections:

Section 1: Material Damage

• Full value of contract works at completion.
• Value of construction material
• New replacement value of contraction plant and equipment
• Limit of insurance for existing buildings
• Limit of insurance for clearance of debris
• Professional fees

Section 2: Third Party Liability

• A limited cover can be provided under this section. This cover does not replace a contractor’s or principal’s general liability cover.

Who can purchase the cover?

• Principal (owner) or Financiers
• Main contractor and all sub-contractors
• Suppliers and manufacturers (only if involved in erection)

Difference between CAR & EAR

So what’s covered?

The policy coverage is mainly divided into two sections:

Section 1: Material damage

Section 2: Third party liability

• Any unforeseen and sudden physical loss or damage resulting from insured perils (Section I), except those specifically excluded.
• Liability to Third Parties for bodily injury and property damage resulting from erection/construction activities on the site (Section II)

Projects that can be insured under EAR.

• Power plants
• Chemical industry
• Transportation and traffic systems
• Electrical industry
• Metal production industry
• Metal working industry
• Paper and cardboard industry
• etc.

What are testing or commissioning risks covered?

• Fire
• Explosion
• Disintegration
• Short Circuit

What are the operational Hazards Covered?

• Excessive pressure (physical explosion)
• Vacuum (implosion)
• Temperature (overheating, embrittlement at low temp)
• Excessive voltage
• Short circuit
• Centrifugal forces
• Out of control chemical reaction (pressure, temp.)
• Failure of controlling/monitoring equipment
• Material failure
• Faulty operation
• Fire

• War, invasion, SRCC, etc.
• Nuclear reaction, nuclear radiation or radioactive contamination
• Willful act or gross negligence
• Cessation of work –partial or total.
• Deductibles applicable.
• Consequential loss, penalties, losses due to delay, lack of performance, loss of contract
• Faulty design, defective material or casting, bad workmanship other than faults in erection
• Wear and tear, corrosion, oxidation, incrustation
• Files, drawings, accounts, currency, stamps etc.
• Loss discovered at the time of taking an inventory

Within agreed period of Insurance coverage from unloading on site until completion of test/provisional take-over by principal.

For second-hand items cover ceases on commencement of test.

Maintenance cover is available as an option either visits maintenance or extended maintenance.

Basis of Claim Settlement

In case of damage which can be repaired (partial loss) settlement will be equivalent to costs necessary to restore items to their condition immediately before the occurrence of the damage.

In case of a total loss, settlement is equivalent to actual value of items immediately before the occurrence of the damage.

A limited liability cover can be provided under Third Party Liability, to cover against sums legally liable consequent upon accidental bodily injury or accidental loss to property belonging to third parties.  Occurring in direct connection with erection/testing of the machinery.