Contractors’ All Risks Insurance (CAR)

The Contractors’ All Risks (CAR) insurance policy cover all types of building and civil engineering construction – from residential (housing) to commercial (shopping centres and office blocks) to infrastructure (roads, bridges, dams, water and sewage reticulation pipelines) and offers protection against the hazards which may threaten works under construction. Most construction projects include certain elements of machinery erection (e.g. installation of air conditioning and lifts in buildings).

The policy provides cover on an all risks basis for physical loss or damage to the insured property.

The main hazards covered are: fire and explosion, theft, burglary, collapse, earthquake, landslides, storm and flood. Certain perils (especially forces of nature) obviously vary from location to location, and the likelihood of loss or damage is also influenced by the actual type and method of construction.

This section protects the insured against third party claims for any bodily injury or property damage caused by construction activities.

Contractors’ Plant & Equipments Insurance (CPE)

This cover is also known as Plant All Risks (PAR) insurance or Contractors’ Plant and Machinery (CPM) insurance. Construction works often call for the use of heavy, specialised machinery such as tunnel boring machines, earthmoving equipment, cranes, pumps, air compressors etc. It is possible to cover such plant and equipment by way of an appropriate endorsement under Contractors’ All Risks policies. However, specific items of plant are usually only on one construction/erection site until the particular job for which they are designed for is completed. Such jobs do not last for the whole construction period and the plant is moved on to the next site as soon as its job is finished. Therefore, in most cases, cover granted by means of an endorsement to the Contractors’ All Risks policy would not be suitable, because such policies are limited to loss or damage caused at one particular construction site only. It is preferable to issue an annually renewable Contractors’ Plant and Equipment policy, because it caters for plant and equipment used at different locations.

Cover is on an “all risks” basis, and is basically for unforeseen and accidental physical loss or damage due to external causes.

The main hazards are: fortuitous working accidents such as collision and overturning, fire, burglary, theft, faulty operation, natural perils such as earthquake, storm and flood.

Advance Loss of Profits (ALOP)

This type of insurance may also be encountered under the name Contractors’ All Risks Loss of Profits, Delayed Earnings Insurance, Delay in Start-up, Loss of Rent, and Loss of Standing Charges (including debt servicing costs). It is a business income protection cover, with the aim of covering the principal’s loss of gross profit resulting from a delay in completion of the construction and/or erection works. A prerequisite for granting ALOP is for an underlying Contractors’ All Risks policy to be in force. Normal working delays are not covered under ALOP.

The cover is limited to the actual loss of gross profit sustained resulting from a delay in the completion of the project; the delay itself must be caused by a loss covered under a Contractors’ All Risks policy.

Electronic Equipment Insurance (EEI)

The Electronic Equipment insurance policy offers complete protection for all types of electronic equipment such as entire Information Technology (IT) installations, telephone exchanges, cell phone networks, specialised electronic medical equipment and electronic measuring equipment.

The policy is of an all risks nature, covering unforeseen accidental loss or damage. The covers include material damage, business interruption, increased cost of working, comprehensive software and software Business Interruption (BI).

Business Interruption following Electronic Equipment Insurance (EEI BI)

Similar to Business Interruption following fire, Electronic Equipment Insurance Business Interruption (EEI BI) covers the financial consequences of an electronic equipment loss.

The cover is limited to the actual loss of gross profit sustained due to a loss covered under an EEI policy and also insures cost incurred in reducing the cost of a claim.

Seamless Project Insurance (SPI)

The cover is defined in the various policy sections and is designed to provide seamless cover for the project from inception of the marine voyage to operational cover.

Machinery Breakdown Insurance (MB)

Machinery Breakdown (MB) insurance offers protection against sudden and unforeseen physical loss or damage to machinery which has been erected and is operational or at rest. The policy covers internal breakdown or derangement. Machines have a limited lifespan as they are exposed to wear and tear: therefore, machinery owners must depreciate their machines annually and establish reserves for replacement.

Following an insured event, the policy pays for all repair costs, provided the cost of repair does not exceed the actual value of the machinery at the time of the loss. In the case of a total loss (repair costs exceed the actual value of the machinery), the actual value is indemnified.

The main causes of damage covered under Machinery Breakdown policies this policies include fortuitous working accidents, a machine’s tearing apart due to centrifugal force, short circuits, defects or faults in design, material or manufacturing and incorrect operation.

Loss of Profit following Machinery Breakdown Insurance (MLOP)

Similar to Loss of Profits following fire, Machinery Loss of Profits covers the financial consequences of a machinery breakdown.

The cover is limited to the actual loss of gross profit sustained due to a loss covered under this policy and also insures costs incurred in reducing the amount of a claim.

Deterioration of Stock (DOS)

Deterioration of Stock is insurance for the protection of perishable goods stored in warehouse-type cold stores or controlled environment rooms. The policy is not intended for goods stored in retail stores.

The cover is for perishable goods (e.g. meat, fish, vegetables, and fruit) stored in cold stores which suffer damage as a consequence of an insured machinery breakdown accident. Such damage occurs as a result of rise or fall in temperature, a change in the concentration of gases or the action of refrigeration media escaping from the equipment in cold stores, due to a breakdown of the refrigeration system or by the loss of coolant.