Contractor's All Risk Policy
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This policy is specially designed to give financial protection to the Civil Engineering Contractors in the event of an accident to the civil engineering works under construction.
This policy is specially designed to give financial protection to the Civil
Engineering Contractors in the event of an accident to the civil engineering
works under construction.
In case the policy period exceeds 12 months, the premium can be paid in
quarterly installments with the first installment being more by 5% and the last
installment being paid 6 months before expiry of the policy.
Who can take the policy?
The policy can be taken by the principal, contractor or sub contractor, jointly
The policy comprises of 2 Sections :
Section I-Material Damage-covering physical loss, damage or destruction of the
property insured by any cause, other than those specifically excluded in the
Section II-Third Party Liability-covering the legal liability falling on the
insured contractor as a result of bodily injury or property damage belonging to
a third party.
The main exclusions under Section I for which no claim is payable, are loss or
damage due to:
rectification of aesthetic defects of structure not relating to any physical
loss or damage to the structure due to any accident, or of material defect or
of workmanship defect.
The exclusion of defective material / workmanship is limited to the parts of
the structure immediately affected and does not apply to any consequential loss
to correctly executed items, arising out of the accident due to defective
material or workmanship.
loss or damage due to gradual deterioration, atmospheric condition, rusting
loss discovered only at the time of taking inventory.
loss arising out of penalty for delay, non-fulfillment of terms of contract.
Add on covers
The policy can be extended to cover the following items :-
Clearing and removal of debris
Damage to surrounding property not forming part of the contract work.
Maintenance visit / extended maintenance cover to cover accidental loss or
damage whilst carrying out any rectification during maintenance period and / or
any amount incurred for rectification of such original defects or faults during
- Third party liability
How to select the sum insured?
The sum insured selected under section I should represent total contract value
including the estimated cost of labour charges and cost of materials but
excluding profit. The cost of materials supplied by the principal is to be
In case of long term contracts, there is bound to be escalation in prices. The
basic policy will pay only as per the original cost and prices. However
escalation clause can be opted for, under which escalation upto 50%, can be
selected to take care of such increase in prices.
The sum insured under section II should represent the per accident limit (the
maximum legal liability that may fall on the insured as a result of an accident
in the insured's site). The limit per policy period should be fixed taking into
account the maximum number of such accidents which can reasonably be expected
Period of Insurance
Unlike other policies where the period of insurance is one year, in this policy
the period of insurance should be equivalent to the period of contract,
commencing from the date of unloading of the first batch of material at the
site of construction and expiring on the date of handing over of the contract
work to the principal.
Although it is possible to extend the policy period in case of delay in
completion of contract, it is always advisable to choose a slightly longer
period of insurance initially, to avoid paying the higher extension premium.
Note: Policy details given are indicative, not exhaustive. Please contact your nearest NIA office for further details.
How to claim?
In the event of any loss or damage giving rise to a claim under the policy, the
following steps should be taken :-
take necessary steps to minimise the loss.
inform insurance company immediately.
extend full cooperation to the surveyor deputed by the company.
submit duly filled in claim form along with necessary documents to substantiate
the financial loss suffered as a result of the accident.
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