Construction Insurance Plans in India 2023

What is Construction Sector Insurance?

The construction insurance plans provide comprehensive cover that includes various civil engineering works such as building, water tanks, erection of buildings, sewage treatment plans etc. Construction insurance plans are designed to cover the damages or losses arising during the construction period due to any insured peril at the time of the accident. The construction insurance plans indemnify the insured for the loss or damage to the insured period in addition to the third-party property damage and injuries. Construction sector insurance plans are designed keeping in mind the people involved in construction activities such as builders, workers, contractors, subcontractors etc.

Types of Construction Business Insurance Policies in India:

There are 3 types of construction insurance plans which are very common and useful in India.

Contractors all Risk Insurance

The Contractor’s all-risk insurance policy is a comprehensive cover designed to cover all the risks except those expressly excluded in the policy. The policy caters to the builders and contractors engaged in civil engineering works such as buildings, projects, sewage plants, water tanks etc. The cover starts once the project is commenced or after the first consignment is uploaded at the project site, whichever is earlier and ends after handing the project to the owner or on the expiry of the policy, whichever comes earlier.

Coverage & Highlights:

• Covers the loss or damage to the under-construction projects due to any perils except those specifically excluded under the policy.
• The policy also covers the loss or damage to the material purchased for construction at the project site.
• The policy covers the Third party property damage that may arise due to the accident at the site. The policy also covers bodily injury being fatal or nonfatal to third-party persons other than their employees.
• Covers perils such as Fire, Earthquake, Impact damage, and collapse.
• Covers natural calamities such as Floods, Storms, Inundation and Lightning. 
• Advance Loss of Profits covers the loss of profits resulting from the delay in the start of the project due to an insured peril. Net profit loss and standing expenses are considered to arrive at the sum insured under this section.
• The policy can be extended to cover Owners surrounding property for any damages and losses. 
• Loss of documents, escalation in sum insured, removal of debris cover, and additional customs duty to be paid are covered by the additional premium payment.
• Add-on such as Design defect cover, extended maintenance, free clause like 72 hours, co-insurance, waiver of contribution, 50:50 clause, and public authority clause.

Exclusions:

• Loss or damage due to willful misconduct. 
• Partial or complete cessation of work and delay
• Damage due to the faulty design in the civil engineering project
• Rectification of the defective material and or effective workmanship, inventory losses etc.
• Deductible as mentioned in the policy.

Steps to Buy:

Step 1: The first step is to visit the webpage of Ethika insurance broking and click on the get quote option. This will redirect you to enter the basic details, after which you will receive a call from the CAR insurance experts of Ethika insurance.

Step 2: The next step is to give the details of the home you are willing to insure. Details of the insured, such as contact details, name, occupation etc, Details of the property such as Address of the property, Market value /Sum insured, period of insurance required etc., should be given to generate the best quote.

Step 3: Next step, pay the bill and obtain the CAR insurance policy. Get the best home insurance quote now.

FAQs

Who can take contractors all risk insurance policy?

Any person that is indirectly or directly engaged in the business of civil construction or construction projects. It is also necessary for a contractor or a principal to undertake a civil project.

Is a contract award letter required to avail CAR policy?

Yes, it is mandatory to produce the contract award letter and the bill of quantity, purchase or delivery order details for availing the insurance. The letter of award consists of all the project details based on which the premium would be calculated for the policy.

Is theft covered under the CAR policy?

Yes, the policy covers theft that may happen on the construction premises.

Can the project value be adjusted during the policy period?

Yes. The project value can be adjusted during the policy period in which the value can be increased and the same can be documented in the policy by informing the insurance company and paying additional premium.

Can I extend the policy or purchase a new policy if the project is prolonged even after the policy period?

Since the same work is being extended, the policy can be extended instead of buying a new policy. The extension of the policy would be done as an endorsement to the existing policy on payment of additional premium.

Erection all Risk Insurance

The policy covers the losses or damages that may arise at the construction site during the erection or testing period. The policy is helpful when machinery is erected and tested at the civil project site. It is the erection. The all-risk insurance plan can be used for the construction and testing of manufacturing units and machines on their own.

Coverage & Highlights:

• Location risks include fire, Lighting, Theft, Burglary & Housebreaking.
• Risks associated with testing and commissioning include failure of safety equipment and electricity leakage or insulation short circuit and explosion. 
• Act of God perils such as Storm, Tempest, Hurricane, Flood, Inundation, Subsidence, Landslide, Rockslide, earthquake.
• Handling Risks such as impact from falling objects on the insured property, collision damage, failure of cranes or trucks etc.
• Human Risks like carelessness and negligence, mistakes in construction/erection strikes and riots and malicious damage, terrorist. 
• Testing perils are covered for maximum value at risk.

Exclusions:

• War and Allied perils
• Willful act or negligence of the insured or his/her representatives
• Deductible or excess of any claim, as specified in the policy
• The normal wear and tear of the product, gradually degrading, no usage, obsolescence, and so on. 
• Nuclear and allied perils
• Cessation of work
• Losses that are discovered only at the time of taking the inventory
• Loss or damage arising out of faulty design or workmanship or defective material used or casting other than the faults in erection.
• Consequential loss or liability of any kind.

Steps to Buy:

Step 1: The first step is to visit the webpage of Ethika insurance broking and click on the get quote option. This will redirect you to enter the basic details, after which you will receive a call from the EAR insurance experts of Ethika insurance. 

Step 2: The next step is to give the details of your home you are willing to insure. Details of the insured such as contact details, name, occupation etc, Details of the property such as Address of the property, Market value /Sum insured, period of insurance required etc. should be given to generate the best quote. 

Step 3: Next, make the necessary payment and then obtain an EAR assurance policy. Get the best home insurance quote now.

FAQs

Who can take erection all risk insurance policy?

Anyone who is directly or indirectly involved in civil construction business or projects. It is also a must for a contractor or a principal undertaking a civil project.

Is Third party liability covered under EAR policy?

Yes. Third party liability can be covered up to a certain percentage of the total sum insured.

What is the testing period in EAR policy?

The testing period is when the project is tested for required output after the installation is complete. The testing period of EAR policy shall begin when the test load for the first time or first introduction of fuel material for processing or feedstock and be extended for the time period specified in the schedule, or till the product has completed all tests, whichever comes first.

Workmen’s Compensation Insurance

This Workmen’s Compensation policy is insurance for liability that will cover employers’ legal obligations in accordance with the Workmen’s Compensation act of 1923, and the Fatal Accidents act of 1855.

Coverage & Highlights:

• In the event of death and incapacity of an employee, the policy will provide for the deceased’s family on behalf of employers.
• In the event of permanent, total or temporary disability, the policy will compensate the employee on behalf of the employer. 
• Any accident or injury that leads to the death or permanent disability of the employee will be covered by the Workmen’s Compensation policy.
• Ailment or illness resulting from work from employment or in the workplace would have coverage under the Workers’ Compensation policy.
• It also provides coverage for medical expenses incurred by an employee due to occupational illnesses like compressed air diseases or injuries sustained at work.
• Sub contractor cover, medical extension cover, terrorism cover, personal accident cover and communicable diseases cover can be taken as an add-on.

Exclusions:

• Any injury or death of an employee outside the course of employment is excluded under the Workmen’s compensation policy.
• Employers are not obliged to compensate victims’ injuries resulting from non-observance of the rules at work.
• Injuries suffered during employment under the influence of drugs or liquor are not permissible under the workmen’s compensation policy.
• The policy doesn’t cover injuries due to suicide attempts or self-injuries sustained by employees.
• The policy covers only full-time employees employed by the company. If third-party employees are injured on the job, the policy will not cover this.
• Employees who suffer injuries due to conflict or invasion will not be covered under the workers’ insurance policy.

Steps to Buy:

Step 1: The first step is to visit the webpage of Ethika insurance broking and click on the get quote option. This will redirect you to enter the basic details after which you would receive a call from the EAR insurance experts of Ethika insurance. 

Step 2: The next step is to give the details of your home you are willing to insure. Details of the insured such as contact details, name, occupation etc, Details of the property such as Address of the property, Market value /Sum insured, period of insurance required etc. should be given to generate the best quote. 

Step 3: Next step, pay and obtain the EAR insurance policy. Get the best home insurance quote now.

FAQs

What does medical extension add on cover?

Medical extension add-on cover compensates the workmen in case of hospitalization due to an illness, disease or accident.

How is the sum insured calculated in a workmen’s compensation policy?

The sum insured is the maximum limit of liability in the workmen’s compensation policy. The sum insured would be calculated based on the workmen’s wages for the period of insurance and the total number of workmen requiring the workmen compensation policy.

Top Construction Business Insurance Plans in India in 2023