Engineering Insurance - Protection for Projects & Machinery

Engineering insurance for construction, installation, and machinery risks

Engineering insurance is a specialized branch of insurance designed to cover risks associated with construction projects, installation activities, and machinery operations. It is essential for businesses involved in infrastructure, manufacturing, and project execution, where risks are technical and high-value.

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What does engineering insurance cover?

Engineering policies broadly protect:

  • Projects under construction / erection
  • Machinery & equipment during operation
  • Electronic equipment and systems

Types of engineering insurance policies

Contractors All Risk (CAR) policy

  • Covers construction projects (buildings, roads, bridges, dams)
  • Protects against:
    • Fire, flood, earthquake
    • Accidental damage during construction
    • Third-party liability (injury / property damage)

Erection All Risk (EAR) policy

  • Covers installation of plant & machinery
  • Suitable for:
    • Industrial machinery setup
    • Power plants, factories
  • Includes testing & commissioning phase

Machinery Breakdown (MB) policy

  • Covers sudden and accidental breakdown of machinery
  • Examples:
    • Mechanical failure
    • Electrical faults
  • Important for operational plants

Electronic Equipment Insurance (EEI)

  • Covers:
    • Computers, servers
    • Medical equipment
    • Office electronics
  • Protects against:
    • Short circuit, voltage fluctuation
    • Accidental damage

Boiler & pressure plant insurance

  • Covers:
    • Boilers and pressure vessels
  • Risks:
    • Explosion, collapse
  • Often includes third-party liability

Major exclusions

  • Wear & tear
  • Gradual deterioration
  • Willful negligence
  • War & nuclear risks
  • Normal maintenance costs