Construction & Erection All Risk

Construction sites are, by nature, high-risk areas. Developers and contractors face a myriad of risks that can financially cripple a project, or even the companies involved. Trust an experienced broker to help get the cover you need, and be there when you need us most. 

When problems arise in construction projects, they can bring negative knock-on effects and additional liabilities. Sub-contracting of various specialised works can create other contractual problems, liability claims and court proceedings. 

In this situation, comprehensive cover from a trusted broker can make all the difference.

What is Construction and Erection All Risk Insurance? 

Construction and Erection All Risk Insurance covers developers and contractors during construction projects. It’s called ‘all risk’ because that's what it intends to cover. If it is not  mentioned as not being covered, it will Policies are worded to provide peace of mind around the enormous risks construction companies face.

The policy covers loss of or damage relating to:

• Fire and Lightning with Allied Perils such as earthquake, typhoon and flood
• Electrical Fire
• Explosion, Smoke Damage, Vehicle Impact, Falling Aircraft
• Broadwater damage
• Bursting &/or overflowing of water tanks, apparatus or pipes
• Sprinkler leakage
• Riot, strike and civil commotion 
• Malicious Damage
• Robbery/Burglary 

It also protects against claims for:

• Third-party bodily injury
• Third-party death
• Third-party property damage

Other important clauses to design comprehensive cover:

• Extended Maintenance Clause

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• Truck Risk Clause

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• Vibration, Removal and Weakening of support

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• Project Owner/Contractor Plant and Equipment 

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• Existing Property Clause

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• Owners Supplied Material

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Policy highlights 

A comprehensive all risks insurance policy should contain a combination of cover around the following elements:

Contract works

A form of property insurance that covers structures and materials associated with the job in the event of damage. 

Professional fees

Covers the cost of consultants - for example, architects or surveyors - required to help rectify damage to the contract works. 

Third party liability

Protects you against claims made in the event of accidents or damage to property.

Environmental liability

If you have an accident that pollutes land, air or water, or harms natural resources and/or biodiversity, the clean-up can land you with a huge bill. Environmental liability insurance is there to cover the costs of restoring the equilibrium. 

Latent defects

Typically used by property developers and building contractors, to protect them against damage caused by defective design or workmanship that is undiscovered until later.  

Latent defects insurance covers costs associated with remedial work. The policy can be used up to 12 years after the job’s completion.

Construction professional indemnity

Construction professional indemnity protects you from claims made in the event of negligent work, giving poor advice or errors and omissions. 

Delay in start-up

If damage to works and structures causes a delay to the project's completion, this clause covers any resulting loss of revenue. Sometimes called “advanced loss in profits insurance”, it can provide a lot of reassurance to you and your partners.

Non-damage delays

With a no-damage-for-delay clause, primary contractors can find themselves liable to pay damages to subcontractors if the project is delayed. A ‘no damage delays’ clause transfers this risk (under certain conditions; delaying on purpose is excluded).

Choose your policy duration  

Policies are available on a project or blanket basis:

• A project policy covers you for the duration of the project including the contractual defects liability period.
• A blanket policy covers an agreed profile of projects declared within a pre-agreed declaration period.   

Make sure your insurance covers everything

The equipment and machinery used in the construction project should be calculated as part of the contract value.

We will help you conduct contract reviews and ensure that the insurances we arrange are effective.

Common extensions

-    Damage to existing buildings or property on-site
-    Demolition and removal of debris costs
-    Expediting costs
-    Professional fees
-    Damage to neighbouring property
-    Employees’ tools and personal effects on-site
-    Legal liability for hired-in plant